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What changed in Super League Enterprise, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Super League Enterprise, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+534 added−734 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in Super League Enterprise, Inc.'s 2025 10-K

534 paragraphs added · 734 removed · 232 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeTo protect our intellectual property, we rely on a combination of patent applications, published and issued patents, copyrights, pending and issued trademarks, confidentiality provisions and procedures, other contractual provisions, trade secret laws, and restrictions on disclosure. We intend to vigorously protect our technology and proprietary rights; however, no assurances can be given that our efforts will be successful.
Biggest changeWe do not presently intend to file additional patent applications and we are considering the merits of potentially licensing and/or selling our existing patents given none are core to our current business strategy and objectives. 8 Table of Contents To protect our intellectual property, we rely on a combination of patent applications, published and issued patents, copyrights, pending and issued trademarks, confidentiality provisions and procedures, other contractual provisions, trade secret laws, and restrictions on disclosure.
Additionally, we may enter into service agreements with independent contractors, on an as-needed basis, to perform certain services. As of December 31, 2024, three of our full-time employees were subject to fixed-term employment agreements with us, and all other employees served at-will pursuant to the terms set forth in their offer letters.
Additionally, we may enter into service agreements with independent contractors, on an as-needed basis, to perform certain services. As of December 31, 2025, three of our full-time employees were subject to fixed-term employment agreements with us, and all other employees served at-will pursuant to the terms set forth in their offer letters.
Advertising spending is traditionally seasonally strong in the second half of each year, reflecting the impact of seasonal back to school, game release and holiday season advertising spending by brands and advertisers.
Advertising spending is traditionally seasonally strong in the second half of each year, reflecting the impact of seasonal back to school and holiday season advertising spending by brands and advertisers.
We believe that this seasonality in advertising spending affects our quarterly results, which generally reflect relatively higher advertising revenue in the second half of each year, compared to the first half of the year. Employees and Labor Relations As of December 31, 2024, we had 75 full-time and full-time equivalent employees.
We believe that this seasonality in advertising spending affects our quarterly results, which generally reflect relatively higher advertising revenue in the second half of each year, compared to the first half of the year. Employees and Labor Relations As of December 31, 2025, we had 34 full-time and full-time equivalent employees.
We believe that we are in compliance with any applicable law or regulation when we run these experiences. 7 Table of Contents Cost of Compliance with Environmental Laws We have not incurred any costs associated with compliance with environmental regulations, nor do we anticipate any future costs associated with environmental compliance; however, no assurances can be given that we will not incur such costs in the future.
Cost of Compliance with Environmental Laws We have not incurred any costs associated with compliance with environmental regulations, nor do we anticipate any future costs associated with environmental compliance; however, no assurances can be given that we will not incur such costs in the future. 9 Table of Contents
Even if our efforts are successful, we may incur significant costs in defending our rights. From time to time, third parties may initiate litigation against us, alleging infringement of their proprietary rights or claiming they have not infringed our intellectual property rights.
From time to time, third parties may initiate litigation against us, alleging infringement of their proprietary rights or claiming they have not infringed our intellectual property rights. See the section entitled “Risk Factors” for additional information regarding the risks we face with respect to litigation related to intellectual property claims.
We believe that we maintain a good working relationship with our employees, and we have not experienced any labor disputes. None of our employees are represented by labor unions. Governmental Regulation Our online gaming platforms, which target individuals ranging from elementary school age children to adults, are subject to laws and regulations relating to privacy and child protection.
We believe that we maintain a good working relationship with our employees, and we have not experienced any labor disputes during the fiscal periods covered by this annual report. None of our employees are represented by labor unions. Governmental Regulation As a part of our experiences, our clients may offer prizes and/or gifts as incentives to play.
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Item 1. Business Overview Super League Enterprise, Inc. (Nasdaq: SLE) (“Super League,” the “Company,” “we,” “us” or “our”) is redefining how brands connect with consumers through the power of playable media.
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Item 1. Business Overview of the Company Super League (Nasdaq: SLE) is an audience intelligence and media activation company operating at the intersection of a 3.3-billion-person global gaming population (Source: Exploding Topics, January 2026) and a $1.0 trillion global advertising market (Source: Dentsu Global, December 2025).
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Through solutions within mobile games and the world’s largest immersive gaming platforms, Super League provides global brands with ads, content, and experiences that are not only seen – they are played, felt, and remembered.
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The Company connects brands with consumers who play video games by leveraging an emerging data and activation platform that utilizes behavioral and psychographic signals to drive marketing outcomes.
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Boasting an award-winning development studio, a vast network of native creators, and proprietary engagement technology, Super League is a one-of-a-kind partner for brands looking to stand out in culture, spark loyalty, and drive meaningful impact. In a world where attention is earned, Super League makes brands relevant - by making them playable.
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By combining differentiated insights, scaled media distribution, and interactive ad formats, Super League enables marketers to reach gamers, one of the largest and most influential audiences in modern culture, across gaming environments, digital video, social media, and connected television.
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We generate revenue from (i) innovative advertising including immersive game world and experience publishing and in-game media products, (ii) direct to consumer offers, including in-game items, e-commerce, and virtual collectibles, and (iii) content and technology through the production and distribution of our own, advertiser and third-party interactive and video content.
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The Company’s operations are organized into three functional areas designed to operate as a connected growth engine. ● Product and Data Platform : The Product and Data Platform team focuses on (i) delivering scalable, productized solutions with reusable components that drive execution efficiency across branded programs and (ii) developing a data platform that provides insights into the preferences, behaviors, and motivations of key audience segments within the gaming ecosystem. ● Advertising and Marketing Solutions: The Advertising and Marketing Solutions team manages programs designed to achieve client objectives.
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We operate in one reportable segment to reflect the way management and our chief operating decision maker review and assess the performance of the business.
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These programs incorporate proprietary solutions and third-party capabilities, including playable ads, rewarded video, immersive mini-games, in-game ads, interactive characters, brand lift studies, and creator-led amplification.
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Our Strategy We believe that video gaming and virtual world platforms are where consumers will continue to spend material amounts of time, making it increasingly important for global brands and intellectual property owners to prioritize in-game and in-world marketing and advertising programs.
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Super League distributes campaigns across major gaming platforms as well as leading digital and social media channels. 2 Table of Contents ● Strategic Properties: The Strategic Properties function consists of partnerships and ownership interests in select gaming properties that provide access to advertising inventory and consumer gameplay data.
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In an attention economy dominated by the continued blending of physical-and-digital lives and smarter, more immersive screens, consumers are increasingly responsive to more customized and personalized advertising content that fits naturally with the activities they most enjoy. For brands, the next generation of consumer engagement will achieved be through targeted solutions that meet this consumer expectation.
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Super League’s capabilities enable brands to differentiate culturally, build affinity, and drive measurable results in an attention-driven media environment.
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With strong roots in open gaming platforms where interactive worlds were first spawned, we believe our success is in the creation, growth, and monetization of playable digital advertising content and interactive experiences across mobile games and immersive platforms.
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The Company generates revenue from brands and agencies by executing programs targeting U.S. audiences that include (i) mini-games and experiences within Roblox, Minecraft, and Fortnite, (ii) playable and rewarded video ads in mobile and immersive environments, (iii) in-game ads within mobile, immersive and PC game titles, (iv) branded connected TV games and sponsorships of connected TV gaming applications, (v) custom integrations within video games across platforms, (vi) interactive characters, and (vii) influencer content across social and digital video platforms.
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Super League’s vision is to be the most comprehensive provider of products and creative, tech-driven solutions that deliver superior levels of consumer engagement and measurable business outcomes for brands within the playable media category. 2 Table of Contents Built on a powerful foundation of unmatched capabilities and software platforms that have driven consistent success for innovative brand experiences, creator growth and monetization, and significant consumer engagement, our scalable, vertically-integrated solution offers: ● Successful owned and third-party publishing worlds, experiences and destinations; ● Innovative product and marketing solutions for brands and developers; and ● Valued tools and analytics for brands and developers.
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An additional emerging revenue source includes participation in revenue generated by select game properties. Super League was incorporated on October 1, 2014 as Nth Games, Inc. under Delaware law and subsequently changed its name to Super League Gaming, Inc. on June 15, 2015 and to Super League Enterprise, Inc. on September 11, 2023.
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Our Business As an early-mover creating engaging experiences inside of metaverse, or “open world,” game platforms since 2015, Super League has converted our deep understanding of young gamers into significant audience reach in virtual world gaming platforms.
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The Company operates as a single reportable segment consistent with how management evaluates performance. Business Strategy Super League’s strategy is centered on driving revenue growth, expanding margins, and establishing a leadership position in helping brands reach consumers who play video games.
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We believe we have successfully iterated our business model through these market insights, and our organic and inorganic growth to establish scale and ultimately drive our monetization strategies. Our strong and growing product-market fit currently reaches over 130 million monthly unique players in Roblox, Minecraft and Fortnite and generates over one billion monthly impressions.
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In the United States, 80% of consumers play video games (Source: Newzoo Global Gamer Study, 2024), underscoring the scale and relevance of this audience. The Company is building a differentiated platform that combines audience intelligence, scalable media activation, and interactive formats to improve marketing outcomes across gaming and digital environments.
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Our software supports the creation and operation of our owned and third-party metaverse gaming worlds and experiences, along with creator tools and analytics underpinned by a creator economy.
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Audience-Centric Approach to a Mass Market Super League’s strategy is grounded in the belief that gamers represent one of the largest and most influential audiences in modern media. The Company approaches this audience as a behavioral segment rather than a channel, defined by how individuals engage with content and make decisions. Gameplay provides a unique window into consumer behavior.
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These capabilities and tools enable Super League to build immersive experiences and custom worlds, as well as, extend audience reach with our innovative in-game ad and consumer products, allowing our content creator partners to participate in our advertising economy.
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Individuals actively make choices, pursue goals, and engage in ways that reflect underlying motivations. Super League translates these behavioral and psychographic signals into insights that inform how brands design and deliver campaigns. Driving Revenue Growth Through Expanded Media Activation Super League generates revenue by executing programs across video games, social, digital video, web and connected television platforms.
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Our analytics suite provides Super League, brands and advertisers, and game developers data that informs campaign measurement and insights, along with enhanced game design. Beyond our primary advertising revenue stream, we have the opportunity to extend further downstream in the metaverse gaming worlds we operate, and generate in-game direct to consumer revenues.
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A key priority is expanding the scale and efficiency of its media activation capabilities. Historically, revenue has been driven by custom programs combining creative development, media distribution, and influencer participation. While these remain important, the Company is increasing its focus on media-based solutions, including playable ads, rewarded video, and in-game advertising.
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In addition, our platform, and our capability to produce compelling gaming-centric video and livestream broadcasts drives viewership to our experiences and our brand partner’s digital channels for further amplification. Specifically, Super League’s digital experience and media products provide a wide range of solutions for brands and advertisers.
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Shifting toward media programs is expected to improve scalability, increase predictability, and enable higher campaign volume across standardized formats. Expanding Margins Through Productization and Operating Leverage Super League is focused on improving margins through productization and operating leverage. The Company has developed reusable frameworks, including interactive formats, content templates, and measurement tools, that can be deployed across campaigns.
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From branded in-game experiences, through to custom content and media, Super League can provide end-to-end solutions for brands to acquire customers, deepen brand affinity and deliver digital to physical conversion to drive meaningful brand business performance.
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This approach enables customization for clients but with reusable assets and repeatable processes, reducing development time and cost. The continued growth of media-based programs is expected to further improve efficiency and margin performance. Building a Differentiated Data and Intelligence Layer Super League is investing in a data and intelligence layer to enhance its ability to understand and influence consumer behavior.
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As Super League has scaled in both metaverse player and viewing audience reach, we have experienced growth in both the average revenue size of branded programs, along with a strong percentage of repeat buyers, while upholding our premium cost per impressions (“CPM”) rates, further validating a new premium social marketing channel for advertisers to reach elusive Generation Z and Alpha gamers.
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The Company aggregates gameplay activity, campaign performance data, and partner inputs to generate insights into audience preferences and motivations. These insights are applied across planning, creative development, targeting, and optimization.
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Additionally, our capability and proprietary technology is now being applied to new virtual world platforms beyond our core offering with the vision of being an enterprise solution for brands to have a persistent, omni-channel across immersive world platforms driving back to a brand’s web experience that speaks this new language of 3D engagement.
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Over time, expanding data assets are expected to improve effectiveness, increase client retention, expand revenue opportunities, and support more efficient media allocation on behalf of brand and agency clients. 3 Table of Contents Expanding Access Through Partnerships and Strategic Acquisitions Super League pursues partnerships and acquisitions to expand capabilities, enhance data and audience intelligence, and increase access to media inventory and distribution.
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A move to more persistent branded programs shifts the Company’s business model from being one of temporal, campaign-centric, engagements to streams that are more annual, recurring, and forecastable in nature, smoothing out some of the current traditional advertising model seasonality.
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The Company evaluates and pursues opportunities that can: ● Expand access to scaled or differentiated inventory; ● Deepen data and insight capabilities; ● Enhance cross-platform execution; ● Improve scalability and margin profile. These efforts are intended to broaden reach, diversify revenue, and strengthen the Company’s position in a complex media landscape.
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Digital Properties and Offerings Our gaming content and media network is underpinned by our proprietary tech and applied to much of our owned and operated consumer properties as well.
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Establishing a Scalable Platform for Long-Term Growth Super League’s long-term objective is to build a scalable platform integrating audience intelligence, cross-channel media activation, and optimized distribution of advertising formats designed for gamers.
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Our consumer facing digital properties include: Mineville: Through a relationship with Microsoft, the owner of Minecraft, we operate a Minecraft server world for more casual players enjoying the game on consoles and tablets.
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The strategy is being built to create a reinforcing, repeatable cycle: ● Data and insights secure increasing volume of campaigns; ● Improved targeting and distribution drives superior campaign performance; ● Premium results drive increased client spend and expand sources of revenue; ● Increased volume and campaign execution expands data and capabilities.
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One of seven partner servers with Microsoft that, while “free to play,” monetize the players through in-game micro transactions, such as gameplay passes and durable goods which run through the Microsoft marketplace.
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This model is intended to support sustained revenue growth, margin expansion, and increasing competitive differentiation. Products and Services Super League provides advertising and marketing solutions that enable brands to reach and engage the 80% of consumers who play video games through a combination of interactive ad formats, immersive content, data-driven insights, and scaled media distribution.
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Minehut: Attracting younger gamers and creators, Minehut is an “always on” social and gaming portal and one of the largest server farms for advanced, avid Minecraft players in the world.
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The Company delivers these solutions through fully managed programs that integrate creative development, audience targeting, media activation, and performance measurement. The Company’s offerings are organized across four primary areas: Advertising and Content Formats, Media Distribution, Data and Insights, and Services.
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Within Minehut is a vibrant community in which players create their own Minecraft worlds to share, socialize and play with friends in addition to Super League operated communal game lobbies for enhanced gaming and social experiences that serve as a portal for branded experiences and advertising.
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Advertising and Content Formats Super League develops and deploys a range of interactive and immersive advertising formats designed to engage consumers within gaming environments and adjacent digital channels.
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On February 29, 2024, the Company sold substantially all of the assets related to its Minehut operations to GamerSafer, Inc., and has thereafter ceased all Minehut operations.
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These formats include: ● Playable Ads – Interactive ad units that allow users to engage directly with branded content through gameplay mechanics within mobile and web-based gaming environments; ● Rewarded Video Ads – Opt-in video ad experiences that provide in-game or in-app incentives in exchange for user attention, delivered within mobile and immersive gaming environments; ● In-Game Advertising – Advertising placements embedded within gameplay environments across mobile, immersive and PC games.
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The transaction allows Super League to streamline its position in partnering with major brands to build, market, and operate 3D experiences across multiple immersive platforms, including open gaming powerhouses like Minecraft, and aligns with our cost improvement initiatives.
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In addition, Super League produces branded interactive content that integrates marketing messages into game-based experiences, including: ● Custom builds and persistent environments within platforms such as Roblox, Fortnite, and Minecraft; ● Mini-games designed for gaming platforms and connected television applications; ● In-game integrations and branded elements embedded within gameplay; ● Digital avatar items and branded virtual goods; ● Interactive three-dimensional characters; ● Brand lift and measurement solutions designed to assess campaign effectiveness; ● Loyalty programs.
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Super League and GamerSafer will maintain a commercial relationship which ensures that Minehut can remain an ongoing destination available to Super League’s partners.
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The Company has developed and owns a set of reusable frameworks and components that enable these experiences to be adapted across multiple campaigns, supporting execution efficiency while maintaining customization for individual brand partners. 4 Table of Contents Media Distribution Super League distributes advertising and content across a broad set of gaming and digital media environments to reach targeted audiences at scale.
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In-Game Digital Goods: While nascent in development, the company has the capability to develop 1 st party and 3 rd party branded digital consumer goods inside virtual world platforms currently being piloted in their owned and operated game worlds, as well as with a small set of brand partners. 3 Table of Contents Our brand partner and creator facing digital properties include: Super League Game Studio: One of the preeminent game creation resources in virtual world game platforms, our Super Games publishing capability provides bespoke game development and custom game experiences within our owned and affiliate game worlds and is a power source connecting our developer network to our brand partners.
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Media distribution channels include: ● Gaming platforms such as Roblox, Fortnite, and Minecraft; ● Mobile gaming environments, including rewarded and playable ad inventory; ● Connected television platforms featuring interactive and gaming-related content; ● Digital video and social media platforms; ● In-game advertising inventory across mobile, web and PC titles.
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Super Biz: Our proprietary suite of metaverse media products and analytics connecting brands and advertisers to hundreds of Roblox games and our extensive Minecraft audiences.
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The Company leverages a network of platform relationships, media supply partners, and creator communities to access advertising inventory and deliver campaigns across these channels. Super League’s distribution approach is designed to be platform-agnostic, allowing campaigns to be executed wherever targeted audiences are most likely to be reached effectively.
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Through our technology, we partner with game developers to bring innovative ad inventory and custom brand experiences into game worlds, allowing developers to participate in our advertising economy and benefit from our analytics to continually enhance player experience.
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Data and Insights Super League utilizes data and analytics to inform campaign strategy, audience targeting, and performance optimization.
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Super View: Super Studios is our fully virtual production studio providing state-of-the-art, scalable solutions for video, television, and branded content, powered by our patented Super View technology, offering a browser-based, fully remote control room solution.
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The Company’s data capabilities include: ● Demographic, behavioral, and psychographic insights derived from gameplay activity, campaign performance, and partner-provided data sources. ● Audience segmentation and targeting based on observed engagement patterns and inferred consumer motivations. ● Campaign optimization through ongoing analysis of user interaction and performance metrics.
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Whether for the creation and broadcast of premium content, or monitoring productions from remote locations, Super Studios and Super View are an innovative, affordable solution to deliver compelling content to meet advertiser objectives and generate additional sources of revenue.
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Super League aggregates data from multiple sources, including proprietary gameplay and campaign data as well as third-party inputs, to generate insights intended to improve the effectiveness of advertising programs. These insights are applied across creative development, media planning, and in-flight campaign optimization. Services Super League delivers its solutions through a fully managed service model that integrates strategy, execution, and measurement.
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Monetization Innovative Brand & Media Integrations The highly sought-after Generation Z and Alpha audience is increasingly difficult for brands to reach due to the fragmentation of content distribution channels, ad-blocking technology and a sentiment against overt marketing and promotion.
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Key service components include: ● Campaign strategy and audience planning; ● Creative design and development of interactive and immersive advertising experiences; ● Media planning and activation across gaming, connected TV and digital and social media channels; ● Influencer and creator program management; ● Measurement and reporting, including brand lift analysis and performance tracking.
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Our ability to uniquely aggregate a diverse, global user base across young age ranges, skill levels and game genres and embed direct, authentic branded product placement creates a base of high-quality, premium advertising inventory attractive to brands and advertisers.
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Super League clients include brands and advertising agencies who rely on the Company to design and execute programs tailored to specific marketing objectives, including awareness, engagement, and customer acquisition.
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We stand for inclusive, fair and fun gameplay and entertainment and believe that our brand is at the forefront of the new, more social and creation-centric gaming experience, providing a positive access point for both endemic and non-endemic brands to reach these mainstream audiences.
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Industry Overview The global advertising industry is expected to exceed $1.0 trillion annually in 2026, with approximately $360 billion in U.S. digital advertising, inclusive of spend across video, social, and connected television. As media consumption fragments, advertisers seek more efficient and effective ways to reach consumers.
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We have experienced significant organic and inorganic growth in our audience, further expanding our premium advertising inventory, increasing deal-sizes and strong repeat buying across the advertiser verticals of retail, entertainment, toys, fashion, consumer packaged goods, and automotive.
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Video gaming has emerged as one of the largest forms of engagement globally, with an estimated 3.3 billion players worldwide and more than 200 million in the United States (Source: The Entertainment Software Association, 2025). Gaming is no longer a niche activity, but rather a mass-market behavior that spans demographic segments and age groups, particularly among younger consumers.
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We further developed our in-house direct sales capability to monetize our experiential and media inventory and continued to realize increases in sales force effectiveness, as demonstrated by larger total revenue wins for our direct sellers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe expect to continue to expend substantial financial and other resources on, among other things: ● investments to expand and enhance our technology platform and technology infrastructure, make improvements to the scalability, availability and security of our platform, and develop new offerings; ● sales and marketing, including expanding our customer acquisition and sales organization and marketing programs, and expanding our programs directed at increasing our brand awareness among current and new customers; ● investments in bandwidth to support our video streaming functionality; ● contract labor costs and other costs to host our leagues and tournaments; ● costs to retain and attract users and creators and license first tier game titles, grow our online user community and generally expand our business operations; ● hiring additional employees; ● expansion of our operations and infrastructure, both domestically and internationally; and ● general administration, including legal, accounting and other costs related to being a public company.
Biggest changeSuch ongoing expenditures are expected to include investments in, among other things: ● investments to expand and enhance our technology platform and technology infrastructure, make improvements to the scalability, availability and security of our platform, and develop new offerings; ● expanding our customer acquisition and sales organization and marketing programs, and expanding our programs directed at increasing our brand awareness among current and new customers; ● hiring additional employees; ● expansion of our operations, both domestically and internationally; and ● general administration, including legal, accounting and other costs related to being a public company.
Accordingly, our quarterly results of operations have fluctuated in the past and will fluctuate in the future, both based on the seasonality of our business as well as external factors impacting the global economy, our industry and our company, including, but not limited to our ability to maintain and grow our customer base, customer engagement, developer base and developer engagement; the level of demand for our service offerings; the ability of our developers to monetize their experiences; increased competition; our pricing model; the maturation of our business; our ability to introduce new revenue streams; legislative or regulatory changes; macroeconomic conditions, such as high inflation, recessionary or uncertain environments, and fluctuating foreign currency exchange rates; our ability to maintain operating margins, cash used in operating activities, and free cash flow; system failures or actual or perceived breaches or other incidents relating to privacy or cybersecurity; adverse litigation judgments, settlements, or other litigation and dispute-related costs; adverse media coverage or unfavorable publicity; the effectiveness of our internal control over financial reporting; changes in our effective tax rate; and changes in accounting standards, policies, guidance, interpretations, or principles.
Accordingly, our quarterly results of operations have fluctuated in the past and will fluctuate in the future, both based on the seasonality of our business as well as external factors impacting the global economy, our industry and our company, including, but not limited to our ability to maintain and grow our customer base, customer engagement, developer base and developer engagement; the level of demand for our service offerings; the ability of our developers to monetize their experiences; increased competition; our pricing model; the maturation of our business; our ability to introduce new revenue streams; legislative or regulatory changes; macroeconomic conditions, such as high inflation, recessionary or uncertain environments, and fluctuating foreign currency exchange rates; our ability to maintain operating margins, cash used in operating activities, and free cash flow; system failures or actual or perceived breaches or other incidents relating to privacy or cybersecurity; adverse litigation judgements, settlements, or other litigation and dispute-related costs; adverse media coverage or unfavorable publicity; the effectiveness of our internal control over financial reporting; changes in our effective tax rate; and changes in accounting standards, policies, guidance, interpretations, or principles.
Adverse macroeconomic conditions, including lower consumer confidence, persistent unemployment, wage and income stagnation, slower growth or recession, changes to fiscal and monetary policy, inflation, higher interest rates, currency fluctuations, economic and trade sanctions, the availability and cost of credit, and the strength of the economies in which we and our customers are located, have adversely affected and may continue to adversely affect our consolidated financial condition and results of operations.
Adverse macroeconomic conditions, including lower consumer confidence, persistent unemployment, wage and income stagnation, slower growth or recession, changes to fiscal and monetary policy, inflation, higher interest rates, currency fluctuations, economic and trade sanctions, the availability and cost of credit, and the strength of the economies in which we and our customers are located, have adversely affected and may continue to adversely affect our financial condition and results of operations.
If one or more of these factors do not occur as expected, it could have a material adverse impact on our activities, including (i) reduction or delay of our business activities, (ii) forced sales of material assets, (iii) defaults on our obligations, or (iv) insolvency. Our planned investments may not result in increased revenue or growth of our business.
If one or more of these factors do not occur as expected, it may have a material adverse impact on our activities, including (i) reduction or delay of our business activities, (ii) forced sales of material assets, (iii) defaults on our obligations, or (iv) insolvency. Our planned investments may not result in increased revenue or growth of our business.
Therefore, it is possible that our valuation of an acquisition may change and result in unanticipated write-offs or charges, impairment of our goodwill, or a material change to the fair value of the assets and liabilities associated with a particular acquisition, any of which would affect our consolidated balance sheet and could significantly harm our business.
Therefore, it is possible that our valuation of an acquisition may change and result in unanticipated write-offs or charges, impairment of our goodwill, or a material change to the fair value of the assets and liabilities associated with a particular acquisition, any of which would affect our balance sheet and could significantly harm our business.
We will continue to evaluate the recoverability of the carrying amount of our intangible assets on an ongoing basis, and we may incur substantial impairment charges, which would adversely affect our consolidated financial results. There can be no assurance that the outcome of such reviews in the future will not result in substantial impairment charges.
We will continue to evaluate the recoverability of the carrying amount of our intangible assets on an ongoing basis, and we may incur substantial impairment charges, which would adversely affect our financial results. There can be no assurance that the outcome of such reviews in the future will not result in substantial impairment charges.
As part of our business strategy, we have made and intend to continue to make acquisitions to add specialized employees and complementary companies, products, or technologies, and from time to time may enter into other strategic transactions such as investments and joint ventures.
As part of our business strategy, we have made and may continue to make acquisitions to add specialized employees and complementary companies, products, or technologies, and from time to time may enter into other strategic transactions such as investments and joint ventures.
A data security breach of one of our vendors or business partners could cause reputational harm to them and/or negatively impact our ability to maintain the credibility of our user community. 17 Table of Contents Data privacy, data protection, localization, security and consumer-protection laws are evolving, and the interpretation and application of these laws in the United States, Europe (including compliance with the European Union’s General Data Protection Regulation (“GDPA”), and elsewhere often are uncertain, contradictory and changing.
A data security breach of one of our vendors or business partners could cause reputational harm to them and/or negatively impact our ability to maintain the credibility of our user community. 19 Table of Contents Data privacy, data protection, localization, security and consumer-protection laws are evolving, and the interpretation and application of these laws in the United States, Europe (including compliance with the European Union’s General Data Protection Regulation (“GDPA”), and elsewhere often are uncertain, contradictory and changing.
Factors that could cause fluctuations in the trading price of our common stock include: ● changes to our industry, including demand and regulations; ● we may not be able to compete successfully against current and future competitors; ● competitive pricing pressures; ● our ability to obtain working capital financing as required; ● additions or departures of key personnel; ● sales of our common stock; ● our ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship, sponsor or licensor; ● any major change in our management; ● changes in accounting standards, procedures, guidelines, interpretations or principals; and ● economic, geo-political and other external factors.
Factors that could cause fluctuations in the trading price of our common stock include: ● changes to our industry, including demand and regulations; ● we may not be able to compete successfully against current and future competitors; ● competitive pricing pressures; 28 Table of Contents ● our ability to obtain working capital financing as required; ● additions or departures of key personnel; ● sales of our common stock; ● our ability to execute our business plan; ● operating results that fall below expectations; ● loss of any strategic relationship, sponsor or licensor; ● any major change in our management; ● changes in accounting standards, procedures, guidelines, interpretations or principals; and ● economic, geo-political and other external factors.
Any such charges or changes would require a restatement of our consolidated financial statements and could harm our business, including our financial condition and results of operations and the price of our securities.
Any such charges or changes would require a restatement of our financial statements and could harm our business, including our financial condition and results of operations and the price of our securities.
We have integrated, and plan to further integrate, AI in our operations. Such integration and use of AI may become more important in our operations over time. These AI-related initiatives, whether successful or not, could cause us to incur substantial costs and could result in delays in our product and service offerings.
We have integrated, and plan to further integrate where appropriate, AI in our operations. Such integration and use of AI may become more important in our operations over time. These AI-related initiatives, whether successful or not, could cause us to incur substantial costs and could result in delays in our product and service offerings.
We may not be able to achieve similar results or accelerate growth at the same rate as we have organically or following the completion of our recent acquisitions and we may not achieve our expected results, all of which may have a material and adverse impact on our financial condition and results of operations.
We may not be able to achieve similar results or accelerate growth at the same rate as we have organically or following the completion of prior acquisitions and we may not achieve our expected results, all of which may have a material and adverse impact on our financial condition and results of operations.
We plan to continue to make acquisitions and pursue other strategic transactions, which could require significant management attention, disrupt our business, dilute our stockholders, impact our financial condition or results of operations, significantly harm our business, and adversely affect the price of our common stock.
We may continue to make acquisitions and pursue other strategic transactions, which could require significant management attention, disrupt our business, dilute our stockholders, impact our financial condition or results of operations, significantly harm our business, and adversely affect the price of our common stock.
These risks could negatively impact our operating results and include the popularity, price to play, and timing of release of third-party and our own games and interactive content, economic conditions that adversely affect discretionary consumer spending, changes in user demographics, the availability and popularity of other forms of entertainment, and critical reviews and public tastes and preferences, which may change rapidly and cannot necessarily be predicted.
These risks could negatively impact our operating results and include the popularity, price to play, and timing of release of third-party and our own games and interactive content, economic conditions that adversely affect discretionary consumer spending, changes in user demographics, the availability and popularity of other forms of entertainment, and critical reviews and public tastes and preferences, which may change rapidly and cannot necessarily be predicted. 33 Table of Contents
Revenues generated from our operations are not presently sufficient to sustain our operations. Therefore, we will need to raise additional capital in the future to continue our operations. We anticipate that our principal sources of liquidity will not be sufficient to fund our activities to obtain long-term, sustainable profitability.
Revenues generated from our operations are not presently sufficient to sustain our operations. Therefore, we may need to raise additional capital in the future to continue our operations. We anticipate that our principal sources of liquidity may not be sufficient to fund our activities to obtain long-term, sustainable profitability.
The new legislation reduced the corporate income tax rate from 34% to 21% effective January 1, 2018, resulting in our deferred income tax assets and liabilities, including NOLs, to be measured using the new rate as reflected in the valuation of these assets as of December 31, 2017.
The new legislation reduced the corporate income tax rate from 35% to 21% effective January 1, 2018, resulting in our deferred income tax assets and liabilities, including NOLs, to be measured using the new rate as reflected in the valuation of these assets as of December 31, 2017.
Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments. 32 Table of Contents If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected.
Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments. If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected.
Although we believe the assumptions we used in testing for impairment are reasonable, significant changes in any one of our assumptions could produce a significantly different result. Risks Related to Artificial Intelligence and Machine Learning Integration of artificial intelligence into our operations could result in reputational or competitive harm, legal liability, and other adverse effects on our business.
Although we believe the assumptions we used in testing for impairment are reasonable, significant changes in any one of our assumptions could produce a significantly different result. 31 Table of Contents Risks Related to Artificial Intelligence and Machine Learning Integration of artificial intelligence into our operations could result in reputational or competitive harm, legal liability, and other adverse effects on our business.
We account for compensation costs for all share-based awards issued under the 2014 Plan using a fair-value based method and recognize expenses in our statements of comprehensive loss in accordance with GAAP.
We account for compensation costs for all share-based awards issued under the 2025 Plan using a fair-value based method and recognize expenses in our statements of comprehensive loss in accordance with GAAP.
Although we take steps to avoid knowingly violating the intellectual property rights of others, it is possible that third parties still may claim infringement. Existing or future infringement claims against us, whether valid or not, may be expensive to defend and divert the attention of our employees from business operations.
Although we take steps to avoid knowingly violating the intellectual property rights of others, it is possible that third parties still may claim infringement. 26 Table of Contents Existing or future infringement claims against us, whether valid or not, may be expensive to defend and divert the attention of our employees from business operations.
These estimates, judgments and assumptions are inherently uncertain and, if our estimates were to prove to be wrong, we would face the risk that charges to income or other financial statement changes or adjustments would be required.
These estimates, judgements and assumptions are inherently uncertain and, if our estimates were to prove to be wrong, we would face the risk that charges to income or other financial statement changes or adjustments would be required.
Financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) typically require the use of good faith estimates, judgments and assumptions that affect the reported amounts.
Financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) typically require the use of good faith estimates, judgements and assumptions that affect the reported amounts.
Although we have developed our brand through word of mouth referrals, and key strategic partners, as we expand, we may conduct various marketing and brand promotion activities using various methods to continue promoting our brand.
Although we have developed our brand through word of mouth referrals and key strategic partnerships, as we expand, we may conduct various marketing and brand promotion activities using various methods to continue promoting our brand.
Any such consequence or other negative effect could have a material adverse effect on our business, financial condition, and results of operations. 34 Table of Contents We have granted, and may continue to grant, share incentive awards, which may result in increased share-based compensation expenses.
Any such consequence or other negative effect could have a material adverse effect on our business, financial condition, and results of operations. We have granted, and may continue to grant, share incentive awards, which may result in increased share-based compensation expenses.
The preparation of our financial statements involves the use of good faith estimates, judgments and assumptions, and our financial statements may be materially affected if such good faith estimates, judgments or good faith assumptions prove to be inaccurate .
The preparation of our financial statements involves the use of good faith estimates, judgements and assumptions, and our financial statements may be materially affected if such good faith estimates, judgements or good faith assumptions prove to be inaccurate .
If the online advertising and sponsorship market does not continue to grow, or if we are unable to capture and retain a sufficient share of that market, our ability to increase our current level of advertising and sponsorship revenue and our profitability and prospects may be materially and adversely affected.
If the digital advertising market does not continue to grow, or if we are unable to capture and retain a sufficient share of that market, our ability to increase our current level of revenue and our profitability and prospects may be materially and adversely affected.
No estimated tax provision has been recorded in the consolidated financial statements included herein for tax attributes that are incomplete or subject to change. The foregoing items could have a material adverse effect on our business, cash flow, financial condition or results of operations.
No estimated tax provision has been recorded in the financial statements included herein for tax attributes that are incomplete or subject to change. 24 Table of Contents The foregoing items could have a material adverse effect on our business, cash flow, financial condition or results of operations.
Often, different estimates, judgments and assumptions could reasonably be used that would have a material effect on such consolidated financial statements, and changes in these estimates, judgments and assumptions may occur from period to period over time.
Often, different estimates, judgements and assumptions could reasonably be used that would have a material effect on such financial statements, and changes in these estimates, judgements and assumptions may occur from period to period over time.
Changes to the products and services we offer related to AI and ML may affect customer expectations, requirements, or tastes in ways that the Company cannot adequately anticipate or adapt to, causing its business to lose revenues. General Risk Factors Catastrophic events may disrupt our business.
Changes to the products and services we offer related to AI and ML may affect customer expectations, requirements, or tastes in ways that the Company cannot adequately anticipate or adapt to, causing its business to lose revenues. 32 Table of Contents General Risk Factors Catastrophic events may disrupt our business.
Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages, such as: ● larger sales and marketing budgets and resources; ● broader and more established relationships with users, developers, and creators; ● greater resources to make acquisitions and enter into strategic partnerships; ● lower labor and research and development costs; ● larger and more mature intellectual property portfolios; and ● substantially greater financial, technical, and other resources.
Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages, such as: ● larger sales and marketing budgets and resources; ● broader and more established relationships with brands and agencies; ● greater resources to make acquisitions and enter into strategic partnerships; ● lower labor and research and development costs; ● larger and more mature intellectual property portfolios; and ● substantially greater financial, technical, and other resources.
The loss of or a substantial reduction in activity by one or more of our largest customers and/or vendors could materially and adversely affect our business, financial condition and results of operations. Our marketing and advertising efforts may fail to resonate with gamers and creators.
The loss of or a substantial reduction in activity by one or more of our largest customers and/or vendors could materially and adversely affect our business, financial condition and results of operations. Our marketing and advertising efforts may fail to resonate with brands and agencies.
Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us.
Governance Risks and Risks Related to our Common Stock Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us.
Our Board has the authority to cause us to issue, without any further vote or action by the stockholders, up to an additional 9,958,018 shares of preferred stock in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series.
Our Board has the authority to cause us to issue, without any further vote or action by the stockholders, up to an additional 6,545,580 shares of preferred stock in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series.
The loss of or a substantial reduction in activity by one or more of our largest customers and/or vendors could materially and adversely affect our business, financial condition and results of operations. For Fiscal Years 2024 and 2023, two customers accounted for 20% and one customer accounted for 14% of revenue, respectively.
The loss of or a substantial reduction in activity by one or more of our largest customers and/or vendors could materially and adversely affect our business, financial condition and results of operations. For Fiscal Years 2025 and 2024, two customers accounted for 22% and two customers accounted for 20% of revenue, respectively.
AI/ML technologies are subject to privacy and data security laws, as well as increasing regulation and scrutiny. Several jurisdictions around the globe, including Europe and certain U.S. states, have proposed enacted, or are considering laws governing the development and use of AI/ML, such as the EU’s AI Act.
AI/ML technologies are subject to privacy and data security laws, as well as increasing regulation and scrutiny. Several jurisdictions around the globe, including Europe and certain U.S. states, have proposed enacted, or are considering laws governing the development and use of AI/ML, such as the EU’s AI Act. We expect other jurisdictions will adopt similar laws.
Conditions in our market could change rapidly and significantly as a result of technological advancements, the emergence of new entrants into the market, partnering or acquisitions by our competitors, continuing market consolidation, or changing developer, creator and user preferences, which can be difficult to predict or prepare for. 12 Table of Contents Our competitors vary in size, and some may have substantially broader and more diverse offerings or may be able to adopt more lucrative payment policies or structures for developers.
Conditions in our market could change rapidly and significantly as a result of technological advancements, the emergence of new entrants into the market, partnering or acquisitions by our competitors, continuing market consolidation, or changing customer preferences, which can be difficult to predict or prepare for. 14 Table of Contents Our competitors vary in size, and some may have substantially broader and more diverse offerings or may be able to adopt more lucrative payment policies or structures for brands and agencies.
Our service offerings are or may be marketed through a diverse spectrum of advertising and promotional programs such as online and mobile advertising, marketing through websites, event sponsorship and direct communications with our user community including via email, blogs and other electronic means.
Our service offerings are or may be marketed through a diverse spectrum of advertising and promotional programs such as online and mobile advertising, marketing through websites, event sponsorship and direct communications with our brand and agency contacts via email, blogs and other electronic means.
Failure to comply with these laws and regulations could harm our business. Consumers are able to access our service offerings online through our platform. We collect and store information about our consumers both personally identifying and non-personally identifying information.
The laws and regulations concerning data privacy are continually evolving. Failure to comply with these laws and regulations could harm our business. Consumers are able to access our service offerings online through our platform. We collect and store information about our consumers both personally identifying and non-personally identifying information.
Although our business has experienced significant growth in recent years, there is no guarantee that our direct to consumer packages will gain significant traction to maximize our growth rate in the future, as the demand for our offerings may change, decrease substantially or dissipate, or we may fail to anticipate and serve user demands effectively.
Although our business has experienced periods of growth in recent years, there is no guarantee that our offerings will gain significant traction to maximize our growth rate in the future, as the demand for our products and services may change, decrease substantially or dissipate, or we may fail to anticipate and serve client demands effectively.
An increasing portion of our marketing activity is taking place on social media platforms that are either outside, or not totally within, our direct control. Changes to user preferences, marketing regulations, privacy and data protection laws, technology changes or service disruptions may negatively impact our ability to reach target users and creators.
A portion of our marketing activity takes place on social media platforms that are either outside, or not totally within, our direct control. Changes to user preferences, marketing regulations, privacy and data protection laws, technology changes or service disruptions may negatively impact our ability to reach target clients.
Alternatively, we may be required to significantly increase the resources employed in research and development in an attempt to accelerate our development of new technologies, either to preserve our launch schedule or to keep up with our competitors, which would increase our development expenses.
Alternatively, we may be required to significantly increase the resources employed in research and development in an attempt to accelerate our development of new technologies, either to preserve our launch schedule or to keep up with our competitors, which would increase our development expenses. 18 Table of Contents We may experience security breaches and cyber threats.
In addition, companies that decide to advertise or promote online may utilize more established methods or channels, such as more established internet portals or search engines, over advertising on our platform.
In addition, companies that decide to advertise or promote online may utilize more established methods or channels, such as more established internet portals or search engines, over advertising through our products and services.
We have invested, and in the future may invest, in new business strategies including within metaverse gaming, a direct to consumer model, technologies, products, or games or first-tier game titles to continue to persistently engage the user and deliver the best user experience.
We have invested, and in the future may invest, in new business strategies including technologies, products, or games or first-tier game titles to continue to persistently engage the user and deliver the best user experience.
Risk Factor Summary Our business operations are subject to numerous risks and uncertainties, including those outside of our control, that could cause our business, financial condition or operating results to be harmed, including risks regarding the following: Risks Related to Our Business and Industry ● our significant past operating losses and any inability to maintain profitability or accurately predict fluctuations in the future; ● a rapidly developing and relatively new market; ● inability to sustain or manage our growth, or otherwise implement our business strategies; ● loss of advertising revenue; ● inability to maintain an effective revenue model; ● reduction in activity by material clients and/or vendors; ● ineffective marketing and/or advertising efforts; ● our ability to maintain and promote our company culture; ● competition in our industry; ● ability to attract, maintain, and retain licenses for popular games on our platforms; ● ability to enter into definitive license agreements with certain game publishers; ● ability to maintain and acquire new users and creators; ● our ability to maintain, enhance, and promote our brand; ● negative perceptions about our brand, platform, content, leagues, tournaments, and/or competitions; ● anticipating and adopting changes to new technologies, business strategies, and/or methods; 8 Table of Contents ● actual or perceived security breaches, as well as errors, vulnerabilities or defects in our software and/or products, and in software and/or products of third-party providers; ● reliance on server functionality; ● the interoperability of our products and services across third-party services and systems; ● security breaches and cyber threats; ● system failures, outages, and/or disruption due to certain events and interruptions by human-caused problems; ● our ability to hire, retain and motivate highly skilled personnel; and ● our reliance on assumptions and estimates to calculate certain key metrics.
Risk Factor Summary Our business operations are subject to numerous risks and uncertainties, including those outside of our control, that could cause our business, financial condition or operating results to be harmed, including risks regarding the following: Risks Related to Our Business and Industry ● our significant past operating losses and any inability to maintain profitability or accurately predict fluctuations in the future; ● inability to sustain or manage our growth, or otherwise implement our business strategies; ● loss of advertising revenue; ● inability to maintain an effective revenue model; ● reduction in activity by material clients and/or vendors; ● ineffective marketing and/or advertising efforts; ● our ability to maintain and promote our company culture; ● competition in our industry; 10 Table of Contents ● our ability to maintain, enhance, and promote our brand; ● negative perceptions about our brand; ● anticipating and adopting changes to new technologies, business strategies, and/or methods; ● actual or perceived security breaches, as well as errors, vulnerabilities or defects in our software and/or products, and in software and/or products of third-party providers; ● the interoperability of our products and services across third-party services and systems; ● security breaches and cyber threats; ● system failures, outages, and/or disruption due to certain events and interruptions by human-caused problems; ● our ability to hire, retain and motivate highly skilled personnel; and ● our reliance on assumptions and estimates to calculate certain key metrics.
Regulatory and Legal ● complex and evolving U.S. and foreign laws and regulations; ● changes in tax laws or regulations regarding us or our customers; ● decreased levels of traffic due to intensified government regulation of the Internet industry; ● liability in the event of a violation of privacy regulations, data privacy laws, and/or child protection laws; ● lawsuits or liability arising as a result of the Company providing its products and/or services; and ● lawsuits or liability as a result of content published through our products and services.
Regulatory and Legal ● complex and evolving U.S. and foreign laws and regulations; ● changes in tax laws or regulations regarding us or our customers; ● liability in the event of a violation of privacy regulations, data privacy laws, and/or child protection laws; ● lawsuits or liability arising as a result of the Company providing its products and/or services; and ● lawsuits or liability as a result of content published through our products and services.
Our operations could be interrupted or degraded by any damage to or failure of: ● our computer software or hardware, or our customers’ or suppliers’ computer software or hardware; ● our network, our customers’ networks or our suppliers’ networks; or ● our connections and outsourced service arrangements with third parties.
We may experience system failures, outages and/or disruptions, and our operations could be interrupted or degraded by any damage to or failure of: ● our computer software or hardware, or our customers’ or suppliers’ computer software or hardware; ● our network, our customers’ networks or our suppliers’ networks; or ● our connections and outsourced service arrangements with third parties.
We cannot assure you that we will succeed in any of these aspects or that the industry within which we operate will continue to grow as rapidly as it has in the past. We generate a significant portion of our revenues from advertising and sponsorships.
We cannot assure you that we will succeed in any of these aspects or that the industry within which we operate will continue to grow as rapidly as it has in the past. We generate the majority of our revenues from brands and agencies.
The difficulties of combining acquired businesses with our own include, among others: ● the diversion of management attention to integration matters; ● difficulties in integrating functional roles, processes and systems, including accounting systems; ● challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the two companies; ● difficulties in assimilating, attracting and retaining key personnel; ● challenges in keeping existing clients and obtaining new clients; ● difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from an acquisition; ● difficulties in managing the expanded operations of a significantly larger and more complex business; ● contingent liabilities, including contingent tax liabilities or litigation, that may be larger than expected; and ● potential unknown liabilities, adverse consequences or unforeseen increased expenses associated with an acquisition, including possible adverse tax consequences to the combined business pursuant to changes in applicable tax laws or regulations.
The difficulties of combining acquired businesses with our own include, among others: ● the diversion of management attention to integration matters; ● difficulties in integrating functional roles, processes and systems, including accounting systems; ● challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the two companies; ● difficulties in assimilating, attracting and retaining key personnel; ● challenges in keeping existing clients and obtaining new clients; ● difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from an acquisition; ● difficulties in managing the expanded operations of a significantly larger and more complex business; ● contingent liabilities, including contingent tax liabilities or litigation, which may be larger than expected; and ● potential unknown liabilities, adverse consequences or unforeseen increased expenses associated with an acquisition, including possible adverse tax consequences to the combined business pursuant to changes in applicable tax laws or regulations. 23 Table of Contents Many of these factors are outside of our control, and any one of them could result in increased costs, decreased expected revenues and diversion of management time and energy, all of which could adversely impact our business and results of operations.
Uncertainty in global economic conditions could negatively affect our business, results of operations and financial condition . We have significant intangible assets recorded on our consolidated balance sheets as of December 31, 2023.
Uncertainty in global economic conditions could negatively affect our business, results of operations and financial condition . We have various intangible assets recorded on our balance sheet as of December 31, 2025.
If one or more of our executive officers or key employees were unable or unwilling to continue their services with us, we might not be able to replace them easily, in a timely manner, or at all.
Our future success depends substantially on the continued efforts of our executive officers and key employees. If one or more of our executive officers or key employees were unable or unwilling to continue their services with us, we might not be able to replace them easily, in a timely manner, or at all.
Acquisitions or other strategic transactions may also result in our recording of significant additional expenses to our results of operations and recording of substantial finite-lived intangible assets on our consolidated balance sheet upon closing.
Acquisitions or other strategic transactions may also result in our recording of significant additional expenses to our results of operations and recording of substantial finite-lived intangible assets on our balance sheet upon closing. Any of these factors may adversely affect our financial condition or results of operations.
We face significant competition to attract and retain our users, developers, and creators that we anticipate will continue to intensify. Should we fail to attract and retain users, developers, and creators, our business and results of operations may suffer. We compete for both users, developers, and creators.
We face significant competition to attract and retain our customers that we anticipate will continue to intensify. Should we fail to attract and retain customers, our business and results of operations may suffer. We compete for brand and agency customers.
Our systems and operations are also vulnerable to damage or interruption from: ● power loss, transmission cable cuts and other telecommunications and utility failures; ● hurricanes, fires, earthquakes, floods and other natural disasters; ● a terrorist attack in the U.S. or in another country in which we operate; ● interruption of service arising from facility migrations, resulting from changes in business operations including acquisitions and planned data center migrations; ● computer viruses or software defects; ● loss or misuse of proprietary information or customer data that compromises security, confidentiality or integrity; or ● errors by our employees or third-party service providers.
Our systems and operations are also vulnerable to damage or interruption from: ● power loss, transmission cable cuts and other telecommunications and utility failures; ● hurricanes, fires, earthquakes, floods and other natural disasters; ● a terrorist attack in the U.S. or in another country in which we operate; ● interruption of service arising from facility migrations, resulting from changes in business operations including acquisitions and planned data center migrations; ● computer viruses or software defects; ● loss or misuse of proprietary information or customer data that compromises security, confidentiality or integrity; or ● errors by our employees or third-party service providers. 21 Table of Contents Our business depends substantially on the continuing efforts of our executive officers, key employees and qualified personnel, and our business operations may be severely disrupted if we lose their services.
The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive.
As of March 31, 2026, we had Preferred Stock outstanding as summarized at Note 7. The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive.
In addition, our continued growth depends, in part, on our ability to respond to rapid technological evolution, continued shifts in gamer trends and demands, frequent introductions of new games and titles and the constant emergence of new industry standards and practices.
In addition, our continued growth depends, in part, on our ability to respond to rapid technological evolution, continued shifts in gamer trends and demands and the constant emergence of new industry standards and practices and video game platform policies and terms of use.
We cannot assure you, however, that these activities will be successful or that we will be able to achieve the brand promotion effect we expect. 15 Table of Contents In addition, any negative publicity in relation to our service offerings, or operations, regardless of its veracity, could harm our brands and reputation.
We cannot assure you, however, that these activities will be successful or that we will be able to achieve the brand promotion effect we expect. 17 Table of Contents In addition, any negative publicity in relation to our service offerings, or operations, regardless of its veracity, could harm our brand and reputation, in which case our market position could be significantly harmed, which may materially and adversely affect our business, results of operations and prospects.
The market liquidity will be dependent on the perception of our operating business, competitive forces, state of the live stream and gaming industry, growth rate and becoming cash flow profitable on a sustainable basis, among other things.
There can be no assurance that there will be an active market for our shares of common stock in the future. The market liquidity will be dependent on the perception of our operating business, competitive forces, state of the live stream and gaming industry, growth rate and becoming cash flow profitable on a sustainable basis, among other things.
We expect other jurisdictions will adopt similar laws. 35 Table of Contents AI/ML models such as those used in our employees and personnel’s performance of their work may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.
AI/ML models such as those used in our employees and personnel’s performance of their work may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.
Although player interaction on our platform is subject to our privacy policies, end user license agreements (“EULAs”), and terms of service, if we fail to comply with our posted privacy policies, EULAs, or terms of service, or if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact our financial condition and/or harm our business.
Although player interaction on our platform is subject to our privacy policies, end user license agreements (“EULAs”), and terms of service, if we fail to comply with our posted privacy policies, EULAs, or terms of service, or if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgements against us, damage our reputation, impact our financial condition and/or harm our business. 25 Table of Contents In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us.
Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuances of incentive awards under equity employee incentive plans, all of which will have additional dilutive effects.
The terms of securities we may issue in future capital transactions may be more favorable for new investors. Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuances of incentive awards under equity employee incentive plans, all of which will have additional dilutive effects.
If we fail to attract more advertisers and sponsors to our platform, or if advertisers or sponsors are less willing to advertise with or sponsor us, our revenues may be adversely affected.
If we fail to attract more brands and agencies, or if brands or agencies are less willing to partner with us, our revenues may be adversely affected.
Even if an investor finds a broker willing to effect a transaction in the shares of our common stock, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling costs may exceed the selling price.
Even if an investor finds a broker willing to effect a transaction in the shares of our common stock, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of low-priced shares of common stock as collateral for any loans.
At December 31, 2024, three customers accounted for 45% of accounts receivable. At December 31, 2023, three customers accounted for 55% of accounts receivable. At December 31, 2024, two vendors accounted for 21% of accounts payable. At December 31, 2023, two vendors accounted for 37% of accounts payable.
At December 31, 2025, three customers accounted for 57% of accounts receivable. At December 31, 2024, three customers accounted for 45% of accounts receivable. At December 31, 2025, one vendor accounted for 24% of accounts payable. At December 31, 2024, two vendors accounted for 21% of accounts payable.
The trading price of our common stock may fluctuate substantially and may be higher or lower than the initial public offering price. This may be especially true for companies with a small public float.
Our stock price may be volatile, and you could lose all or part of your investment. The trading price of our common stock may fluctuate substantially. This may be especially true for companies with a small public float.
Our business and prospects depend on the continuing development of a leading position as a creator and publisher of content experiences and media solutions across the world’s largest immersive platforms. The market for gaming-related content has grown significantly in recent years and continues to rapidly develop, which may present significant challenges.
Our business and prospects depend on the continuing development of a leading position as a provider of media solutions for brands interested in reaching and engaging audiences who play video games. The market for gaming media solutions has grown significantly in recent years and continues to rapidly develop, which may present significant challenges.
In addition, although we take steps to enforce and police our rights, factors such as the proliferation of technology designed to circumvent the protection measures used by our business partners or by us, the availability of broadband access to the Internet, the refusal of Internet service providers or platform holders to remove infringing content in certain instances, and the proliferation of online channels through which infringing product is distributed all have contributed to an expansion in unauthorized copying of our technology, content and brands. 27 Table of Contents Third parties may register trademarks or domain names or purchase internet search engine keywords that are similar to our registered trademark or pending trademarks, brands or websites, or misappropriate our data and copy our platform, all of which could cause confusion, divert users and creators away from our platform and service offerings, or harm our reputation.
In addition, although we take steps to enforce and police our rights, factors such as the proliferation of technology designed to circumvent the protection measures used by our business partners or by us, the availability of broadband access to the Internet, the refusal of Internet service providers or platform holders to remove infringing content in certain instances, and the proliferation of online channels through which infringing product is distributed all have contributed to an expansion in unauthorized copying of our technology, content and brands.
These developments may limit our ability to target and measure the effectiveness of ads across platforms and may negatively impact our advertising revenue. If we are unable to mitigate these developments as they take further effect in the future, our targeting and measurement capabilities may be materially and adversely affected, which would in turn significantly impact our future revenue growth.
If we are unable to mitigate these developments as they take further effect in the future, our targeting and measurement capabilities may be materially and adversely affected, which would in turn significantly impact our future revenue growth. 20 Table of Contents We may experience system failures, outages and/or disruptions of the functionality of our platform.
We have a limited operating history as a leading creator and publisher of content experiences and media solutions across the world’s largest immersive platforms and have experienced growth during certain of the periods presented herein due, in large part, to the acquisitions we completed during Fiscal Year 2023 and Fiscal Year 2021.
We have a somewhat limited operating history as a leading creator and publisher of content experiences and media solutions across the world’s largest immersive platforms and have experienced organic and inorganic growth during certain prior periods.
Despite our efforts, no assurances can be given that such measures will be sufficient to completely avoid exposure and COPPA violations, any of which could expose us to significant liability, penalties, reputational harm and loss of revenue, among other things. 25 Table of Contents The laws and regulations concerning data privacy are continually evolving.
We undertake significant effort to implement certain precautions to ensure that access to our platform is COPPA compliant. Despite our efforts, no assurances can be given that such measures will be sufficient to completely avoid exposure and COPPA violations, any of which could expose us to significant liability, penalties, reputational harm and loss of revenue, among other things.
Risks Related to Artificial Intelligence and Machine Learning ● Integration of artificial intelligence (“AI”) into our operations could adversely affect our business; ● issues in the use of AI or machine learning (“ML”) in our operations may result in reputational harm or liability; ● we currently do not incorporate AI or ML into our products, although some of our competitors do, which could adversely affect our business and profitability; and ● issues relating to the use of AI and/or ML may result in increased regulation and costs to comply with such regulations. 10 Table of Contents General Risk Factors ● actual or threatened epidemics, pandemics, outbreaks, or other public health crises; ● changes in the state of the U.S. economy and a return to volatile or recessionary conditions; and ● risks generally associated with the entertainment industry.
Risks Related to Artificial Intelligence and Machine Learning ● issues in the use of AI or machine learning (“ML”) in our operations may result in reputational harm or liability; ● we currently do not incorporate AI or ML into our products, although some of our competitors do, which could adversely affect our business and profitability; and ● issues relating to the use of AI and/or ML may result in increased regulation and costs to comply with such regulations.
Regulatory and Legal Risk Factors Our business is subject to regulation, and changes in applicable regulations may negatively impact our business. We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet.
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet.
Holders of our common stock must bear the risk that any such future offerings we conduct or borrowings we make may adversely affect the level of return they may be able to achieve from an investment in our common stock.
Holders of our common stock must bear the risk that any such future offerings we conduct or borrowings we make may adversely affect the level of return they may be able to achieve from an investment in our common stock. 30 Table of Contents We are a “ smaller reporting company ” and we cannot be certain if the reduced reporting requirements applicable to smaller reporting companies will make an investment in us less attractive to investors.
In addition, given the breadth and depth of changes in data protection obligations, ongoing compliance with evolving interpretation of the GDPR and other regulatory requirements requires time and resources and a review of the technology and systems currently in use against the requirements of GDPR and other regulations. 26 Table of Contents We may be held liable for information or content displayed on, retrieved from or linked to our platform, or distributed to our users.
In addition, given the breadth and depth of changes in data protection obligations, ongoing compliance with evolving interpretation of the GDPR and other regulatory requirements requires time and resources and a review of the technology and systems currently in use against the requirements of GDPR and other regulations.
Monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot assure you that the steps we have taken will prevent misappropriation of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources.
Monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot assure you that the steps we have taken will prevent misappropriation of our intellectual property.
Under the 2014 Plan, we are authorized to grant options to purchase shares of common stock of our Company, restricted share units to receive shares of common stock and restricted shares of common stock.
Under the 2025 Plan, we are authorized to grant options to purchase shares of common stock of our Company, restricted share units to receive shares of common stock and restricted shares of common stock. For Fiscal Year 2025 and Fiscal Year 2024, we recorded share-based compensation expense as disclosed at Note 8.
We have and will continue to use significant capital for the growth and development of our business, and, as such, we expect to seek additional capital either from operations or that may be available from future issuance(s) of common stock or debt financings, to fund our planned operations. 36 Table of Contents Accordingly, our results of operations and the implementation of our long-term business strategy could be adversely affected by general conditions in the global economy, including conditions that are outside of our control, such as the historically high levels of inflation recently experienced by the United States, Europe and other key global markets.
Accordingly, our results of operations and the implementation of our long-term business strategy could be adversely affected by general conditions in the global economy, including conditions that are outside of our control, such as the historically high levels of inflation recently experienced by the United States, Europe and other key global markets.
Our issuance of additional shares of preferred stock could adversely affect the market value of our common stock, dilute the voting power of common stockholders and delay or prevent a change of control.
As a result, appreciation, if any, in the market price of our common stock will be your sole source of gain for the foreseeable future. 29 Table of Contents Our issuance of additional shares of preferred stock could adversely affect the market value of our common stock, dilute the voting power of common stockholders and delay or prevent a change of control.
We adopted our Amended and Restated 2014 Stock Option and Incentive Plan (the “2014 Plan”) in October 2014, for purposes of granting share-based compensation awards to employees, directors and consultants to incentivize their performance and align their interests with ours.
On June 9, 2025, the stockholders of the Company approved the 2025 Omnibus Stock Incentive Plan (the “2025 Plan”), for purposes of granting share-based compensation awards to employees, directors and consultants to incentivize their performance and align their interests with ours.
Although our common stock is listed on the Nasdaq Capital Market, our shares are likely to be thinly traded for some time and an active market may never develop.
Although our common stock is listed on the Nasdaq Capital Market, our shares may be thinly traded at times and an active market may never develop. Although our common stock is listed on the Nasdaq Capital Market, our shares of common stock may be thinly traded at times, and the price may not reflect our actual or perceived value.
Any of these factors may adversely affect our financial condition or results of operations. 23 Table of Contents We may not be able to successfully integrate our acquisitions and we may incur significant costs to integrate and support the companies we acquire.
We may not be able to successfully integrate our acquisitions and we may incur significant costs to integrate and support the companies we acquire.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information on our cybersecurity risks and their potential impact to our business, see Item 1A , “ Risk Factors-Risks related to Our Business and Industry - We may experience security breaches and cyber threats ” and Item 1A, “ Risk Factors-Risks related to Our Business and Industry - Our business could be adversely affected if our data privacy and security practices are not adequate, or perceived as being inadequate, to prevent data breaches, or by the application of data privacy and security laws generally .” 37 Table of Contents Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “ Committee ”) oversight of cybersecurity and other information technology risks.
Biggest changeFor more information on our cybersecurity risks and their potential impact to our business, see Item 1A, “ Risk Factors-Risks related to Our Business and Industry - We may experience security breaches and cyber threats ” and Item 1A, “ Risk Factors-Risks related to Our Business and Industry - Our business could be adversely affected if our data privacy and security practices are not adequate, or perceived as being inadequate, to prevent data breaches, or by the application of data privacy and security laws generally .” Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “ Committee ”) oversight of cybersecurity and other information technology risks.
We engage third-party auditors and consultants and leverage our internal information security, audit, and compliance functions to assess various facets of our cybersecurity program. We also maintain enterprise-wide processes to oversee and identify risks from cybersecurity threats associated with our use of third-party service providers. We assess cybersecurity contingencies within our overall business continuity risk management planning process.
We engage third-party auditors and consultants and leverage our internal information security and compliance functions to assess various facets of our cybersecurity program. We also maintain enterprise-wide processes to oversee and identify risks from cybersecurity threats associated with our use of third-party service providers. We assess cybersecurity contingencies within our overall business continuity risk management planning process.
This approach ensures that cybersecurity risks are appropriately prioritized and managed throughout the organization. Our Corporate Counsel has 20 years of experience in information technology, including cybersecurity, audit, compliance, and cybersecurity. In addition, we have an Enterprise IT Operations Engineer (“Ops Engineer”) with requisite knowledge and experience in information technology and cybersecurity, and maintains IT and Ops professional certifications.
This approach ensures that cybersecurity risks are appropriately prioritized and managed throughout the organization. Our corporate counsel has over 25+ years of experience in information technology, including cybersecurity, audit, and compliance. In addition, we have an Enterprise IT Operations Engineer (“Ops Engineer”) with requisite knowledge and experience in information technology and cybersecurity, and maintains IT and Ops professional certifications.
Our information technology and information security teams utilize various technology tools to prevent, monitor, detect, and respond to cybersecurity threats. Our incident response policy outlines processes, roles, responsibilities, notifications, and other communications applicable to the assessment, mitigation, and remediation of realized cybersecurity events.
Our information technology and information security team utilizes various technology tools to prevent, monitor, detect, and respond to cybersecurity threats. Our incident response policy outlines processes, roles, responsibilities, notifications, and other communications applicable to the assessment, mitigation, and remediation of realized cybersecurity events.
In addition to periodic presentations, management promptly updates our Board and Audit Committee regarding significant threats and incidents as they arise.
In addition to periodic presentations, management promptly updates our Board and Audit Committee regarding significant threats and incidents as they arise. 34 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2024 we maintain approximately 1,550 square feet of office space which is leased on a month-to-month basis at a rate of approximately $7,000 per month.
Biggest changeITEM 2. PROPERTIES As of December 31, 2025 we maintain approximately 200 square feet of office space which is leased on an annual basis at a rate of approximately $3,000 per month.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS As of the date hereof, we are not a party to any material legal or administrative proceedings. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
Biggest changeThere are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention.
ITEM 3. LEGAL PROCEEDINGS We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention.
Added
As of the date hereof, except as described below under “Contingencies” and Note 10, “Commitment and Contingencies,” we are not a party to any material legal or administrative proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is listed on the Nasdaq Capital Market under the ticker symbol “SLE.” As of March 31, 2025, we had 365 holders of record of our common stock based upon the records of our transfer agent, which do not include beneficial owners of common stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.
Biggest changeMARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is listed on the Nasdaq Capital Market under the ticker symbol “SLE.” As of March 31, 2026, we had approximately 307 holders of record of our common stock based upon the records of our transfer agent, which do not include beneficial owners of common stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.
Recent Sales of Unregistered Equity Securities No unregistered securities were issued during the years ended December 31, 2024 and 2023 that were not previously reported. Performance Graph As a smaller reporting company, we are not required to provide the performance graph required by Item 201(e) of Regulation S-K.
Recent Sales of Unregistered Equity Securities No unregistered securities were issued during the years ended December 31, 2025 and 2024 that were not previously reported. Performance Graph As a smaller reporting company, we are not required to provide the performance graph required by Item 201(e) of Regulation S-K.
Issuance of Common Stock as Dividends During the years ended December 31, 2024 and 2023, we paid common stock dividends on outstanding preferred stock as disclosed at Note 7 to the financial statements contained elsewhere herein.
Issuance of Common Stock as Dividends During the years ended December 31, 2025 and 2024, we paid common stock dividends on outstanding preferred stock as disclosed at Note 7 to the financial statements contained elsewhere herein.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeImmediate benefits of being part of the program include access to educational resources and training, along with comprehensive tools, collateral, and insights for brand onboarding and education. 43 Table of Contents Equity Financings Convertible Preferred Stock Issuances ● Series AAA Junior Convertible Preferred Financing On the dates set forth in the applicable table below, we entered into subscription agreements with accredited investors in connection with the sale of an aggregate of 2,857 shares of newly designated Series AAA Junior, AAA-2 Junior, AAA-3 Junior and AAA-4 Junior Convertible Preferred Stock, each series having a $0.001 par value and a $1,000 purchase price, hereinafter collectively referred to as “Series AAA Junior Preferred,” and the individual offerings of Series AAA Junior Preferred stock, hereinafter collectively referred to as the “Series AAA Junior Offerings”, raising gross proceeds of $2.9 million, before fees. ● Series AAA Convertible Preferred Financing On the dates set forth in the applicable table below, we entered into subscription agreements with accredited investors in connection with the sale of an aggregate of 8,355 shares of newly designated Series AAA and AAA-2 Convertible Preferred Stock, each series having a $0.001 par value and a $1,000 purchase price, hereinafter collectively referred to as “Series AAA Preferred,” and the individual offerings of Series AAA Preferred stock, hereinafter collectively referred to as the “Series AAA Offerings”, raising gross proceeds of $8.4 million, before fees. ● Series AA Convertible Preferred Financing On the dates set forth in the applicable table below, we entered into subscription agreements with accredited investors in connection with the sale of an aggregate of 11,781 shares of newly designated Series AA, AA-2, AA-3, AA-4 and AA-5 Convertible Preferred Stock, each series having a $0.001 par value and a $1,000 purchase price, hereinafter collectively referred to as “Series AA Preferred,” and the individual offerings of Series AA Preferred stock hereinafter collectively referred to as the “Series AA Offerings”, raising gross proceeds of $11.8 million, before fees. ● Series A Convertible Preferred Financing On the dates set forth in the applicable table below, we entered into subscription agreements with accredited investors in connection with the sale of an aggregate of 12,622 shares of newly designated Series A, A-2, A-3, A-4 and A-5 Convertible Preferred Stock, each series having a $0.001 par value and a $1,000 purchase price, hereinafter collectively referred to as “Series A Preferred,” and the individual offerings of Series A Preferred stock, hereinafter, collectively referred to as the “Series A Offerings”, raising gross proceeds of $12.6 million, before fees.
Biggest changeEquity Financings - Issuances of Convertible Preferred Stock On the dates set forth in the table below, we entered into subscription agreements with accredited investors in connection with the sale of newly designated Series of Convertible Preferred Stock, each series having a $0.001 per share par value and a $1,000 per share purchase price (except for Series AAAA Jr.
With respect to the promissory notes described at Note 6, as provided for by ASC 825, the estimated fair value adjustments are presented in a respective single line item within other income (expense) in the accompanying consolidated statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk.
With respect to the promissory notes described at Note 6, as provided for by ASC 825, the estimated fair value adjustments are presented in a respective single line item within other income (expense) in the accompanying statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk.
The estimated fair value adjustments, subsequent to the issuance date, as required by ASC 825, are recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying consolidated statements of operations.
The estimated fair value adjustments, subsequent to the issuance date, as required by ASC 825, are recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying statements of operations.
In addition, judgements and estimates are required in connection with the determination of the portion of subsequent fair value adjustments relate to instrument-specific credit risk, which are reflected in OCI, and the portion of subsequent fair value adjustments that relate to changes in interests rates or other variables, which are reflected in the consolidated statements of operations.
In addition, judgements and estimates are required in connection with the determination of the portion of subsequent fair value adjustments relate to instrument-specific credit risk, which are reflected in OCI, and the portion of subsequent fair value adjustments that relate to changes in interests rates or other variables, which are reflected in the statements of operations.
Contingencies Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.
Contingencies Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of our operations together with our consolidated financial statements and the notes thereto appearing elsewhere in this Report.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of our operations together with our financial statements and the notes thereto appearing elsewhere in this Report.
If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements.
If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.
Pursuant to the Diagonal Note, Diagonal has the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal Effective Date and ending on the earlier of (a) the Diagonal Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal Note into fully paid and non-assessable shares of Common Stock at a price equal to 75% multiplied by the Market Price (as defined below) (the “Conversion Price”).
Pursuant to the Diagonal Note, Diagonal had the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal Effective Date and ending on the earlier of (a) the Diagonal Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal Note into fully paid and non-assessable shares of common stock at a price equal to 75% multiplied by the Market Price (as defined below) (the “Conversion Price”).
Sale of Minehut On February 29, 2024, the Company sold its Minehut business unit (“Minehut”) to GamerSafer, Inc., a Delaware corporation (“GamerSafer”), in a transaction approved by the Board.
Other Sale of Minehut On February 29, 2024, the Company sold its Minehut business unit (“Minehut”) to GamerSafer, Inc., a Delaware corporation (“GamerSafer”), in a transaction approved by the Board.
In connection with the modifications the AIRs with initial aggregate underlying common shares totaling 1.3 million, were modified as described above, resulting in an incremental increase in fair value totaling $364,000, of which $294,000 was charged to additional paid-in capital as a financing costs, and $70,000 which was charged to other expense in the consolidated statements of operations as a legal settlement cost.
In connection with the modifications, the AIRs with initial aggregate underlying common shares totaling 1.3 million, were modified as described above, resulting in an incremental increase in fair value totaling $364,000, of which $294,000 was charged to additional paid-in capital as a financing cost, and $70,000 which was charged to other expense in the statements of operations as a legal settlement cost.
We make estimates and judgments when determining whether we will collect substantially all of the consideration to which we will be entitled in exchange for the goods or services that will be transferred to the customer. We assess the collectability of receivables based on several factors, including past transaction history and the creditworthiness of our customers.
We make estimates and judgements when determining whether we will collect substantially all of the consideration to which we will be entitled in exchange for the goods or services that will be transferred to the customer. We assess the collectability of receivables based on several factors, including past transaction history and the creditworthiness of our customers.
Some accounting policies have a significant impact on amounts reported in our financial statements. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments.
Some accounting policies have a significant impact on amounts reported in our financial statements. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgements.
Variations in any of these judgements and estimates could have a material impact on our financial results. Determination of Fair Value – Warrants During the period presented the Company issued certain common stock purchase warrants (“Warrants”) as described at Note 6 to the consolidated financial statements.
Variations in any of these judgements and estimates could have a material impact on our financial results. Determination of Fair Value – Warrants During the period presented the Company issued certain common stock purchase warrants (“Warrants”) as described at Note 6 and 7 to the financial statements.
The Company is required to repay all the obligations due under the Agile II Loan Agreement and the Agile II Note in 32 equal payments of $110,937, with the first payment being made to Agile on February 17, 2025, and every seven days thereafter until the maturity date.
The Company was required to repay all the obligations due under the Agile II Loan Agreement and the Agile II Note in 32 equal payments of $110,937, with the first payment being made to Agile on February 17, 2025, and every seven days thereafter until the maturity date.
A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in the audited financial statements and notes thereto included elsewhere herein. The following accounting policies were identified during the periods presented, based on activities occurring during the periods presented, as critical and requiring significant judgments and estimates.
A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in the audited financial statements and notes thereto included elsewhere herein. The following accounting policies were identified during the periods presented, based on activities occurring during the periods presented, as critical and requiring significant judgements and estimates.
Software development costs incurred to develop internal-use software during the application development stage are capitalized and amortized on a straight-line basis over the software’s estimated useful life, which is generally three years. Software development costs incurred during the preliminary stages of development are charged to expense as incurred. Maintenance and training costs are charged to expense as incurred.
Capitalized Internal Use Software Costs . Software development costs incurred to develop internal-use software during the application development stage are capitalized and amortized on a straight-line basis over the software’s estimated useful life, which is generally three years. Software development costs incurred during the preliminary stages of development are charged to expense as incurred.
Contractual Obligations and Off-Balance Sheet Commitments and Arrangements As of December 31, 2024, other than as described herein, we had no significant commitments for capital expenditures, nor do we have any committed lines of credit, other committed funding or long-term debt, and no guarantees.
Contractual Obligations and Off-Balance Sheet Commitments and Arrangements As of December 31, 2025, other than as described herein, we had no significant commitments for capital expenditures, nor do we have any committed lines of credit, other committed funding or long-term debt, and no guarantees.
Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services and when the customer obtains control of the good or service.
Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services and when the customer obtains control of the goods or services.
Changes in working capital primarily reflected the impact of the settlement of receivables and payables in the ordinary course.
Changes in working capital primarily reflected the impact of the management and settlement of receivables and payables in the ordinary course.
Cost of revenue fluctuates period to period based on the specific programs and revenue streams contributing to revenue each period and the related cost profile of our immersive digital experiences, media and advertising campaigns and publishing and content studio sales activities occurring each period.
Cost of revenue fluctuates period to period based on the specific programs and revenue streams contributing to revenue each period and the related cost profile of our physical and digital experiences, media and advertising campaigns and publishing and content studio sales activities occurring each period.
Management’s estimates regarding collectability impact the actual revenue recognized each period and the timing of the recognition of revenue. Our assumptions and judgments regarding future collectability could differ from actual events and thus materially impact our financial position and results of operations.
Management’s estimates regarding collectability impact the actual revenue recognized each period and the timing of the recognition of revenue. Our assumptions and judgements regarding future collectability could differ from actual events and thus materially impact our financial position and results of operations.
The estimated fair value adjustment is included in interest expense in the accompanying consolidated statements of operations.
The estimated fair value adjustment is included in interest expense in the accompanying statements of operations.
Depending on the complexity of the underlying revenue arrangement and related terms and conditions, significant judgments, assumptions and estimates may be required to determine each parties rights regarding the goods or services to be transferred, each parties performance obligations, whether performance obligations are satisfied at a point in time or over time, estimates of completion methodologies, the timing of satisfaction of performance obligations, whether we are a principal or agent in the arrangement and the appropriate period or periods in which, or during which, the completion of the earnings process and transfer of control occurs.
Depending on the complexity of the underlying revenue arrangement and related terms and conditions, significant judgements, assumptions and estimates may be required to determine each party’s rights regarding the goods or services to be transferred, each party’s performance obligations, whether performance obligations are satisfied at a point in time or over time, estimates of completion methodologies, the timing of satisfaction of performance obligations, whether we are a principal or agent in the arrangement and the appropriate period or periods in which, or during which, the completion of the earnings process and transfer of control occurs.
Variations in any of these judgements and estimates could have a material impact on our financial results. Relaxed Ongoing Reporting Requirements We qualify to report as a “smaller reporting company” (as defined in Rule 12b-2) under the reporting rules set forth under the Exchange Act.
Variations in any of these judgements and estimates could have a material impact on our financial results. 60 Table of Contents Relaxed Ongoing Reporting Requirements We qualify to report as a “smaller reporting company” (as defined in Rule 12b-2) under the reporting rules set forth under the Exchange Act.
The Company is required to repay all the obligations due under the Agile Loan Agreement and the Agile Note in 28 equal payments of $93,821, with the first payment being made to Agile on November 14, 2024, and every seven days thereafter until the Maturity Date.
The Company was required to repay all the obligations due under the Agile I Loan Agreement and the Agile I Note in 28 equal payments of $93,821 with the first payment being made to Agile on November 14, 2024, and every seven days thereafter until the Maturity Date.
Weighted average assumptions utilized in the Black Scholes option pricing model included implied (derived) common stock prices from $0.72 to $0.86, conversion prices ranging from $1.856 to $13.25 (based on the applicable original and modified preferred stock conversion prices), risk free interest rates ranging from 4.64% to 5.36%, terms ranging from .24 years to .92 years and volatility assumptions ranging from 68% to 91%.
Weighted average assumptions utilized in the Black Scholes option pricing model included implied (derived) common stock prices from $0.72 to $0.86, conversion prices ranging from $22.20 to $13.25 (based on the applicable original and modified preferred stock conversion prices), risk free interest rates ranging from 4.64% to 5.36%, terms ranging from .24 years to .92 years and volatility assumptions ranging from 68% to 91%.
The carrying value of Minehut related assets totaled $475,000 as of February 26, 2024, comprised of total carrying costs of $1,671,000, net of accumulated amortization of $1,196,000, and historically were included in intangible assets, net in the consolidated balance sheet.
The carrying value of Minehut related assets totaled $475,000 as of February 26, 2024, comprised of total carrying costs of $1,671,000, net of accumulated amortization of $1,196,000, and historically were included in intangible assets, net in the balance sheets.
Each of the Belleau Notes: (x) matures on the date that is 12 months from the date of the issuance of each respective Belleau Note (collectively, the “Belleau Maturity Date”); (y) may be prepaid in part or in full at any time by the Company without penalty; and (z) accrues interest at a rate of 20% simple interest per annum (the “Belleau Interest Rate”, and the dollar value of the accrued interest, the “Belleau Interest”).
Each of the Belleau Notes: (x) matured on the date that was 12 months from the date of the issuance of each respective Belleau Note (collectively, the “Belleau Maturity Date”); (y) may be prepaid in part or in full at any time by the Company without penalty; and (z) accrued interest at a rate of 20% simple interest per annum (the “Belleau Interest Rate”, and the dollar value of the accrued interest, the “Belleau Interest”).
Pursuant to the RP Purchase Agreement, the Company issued to the Purchaser an Unsecured Promissory Note (the “RP Note”) in the amount of $1,500,000 (the “RP Principal”), for which the RP Note (i) matures on the date that is 12 months from the RP Effective Date (the “RP Maturity Date”), (ii) may be pre-paid at any time by the Company without penalty, and (iii) accrues interest on the RP Principal at a rate of 40% simple interest per annum (the “RP Interest”).
Pursuant to the RP Purchase Agreement, the Company issued to the Purchaser an Unsecured Promissory Note (the “RP Note”) in the amount of $1,500,000 (the “RP Principal”), for which the RP Note (i) matured on the date that was 12 months from the RP Effective Date (the “RP Maturity Date”), (ii) may be pre-paid at any time by the Company without penalty, and (iii) accrued interest on the RP Principal at a rate of 40% simple interest per annum (the “RP Interest”).
The Minehut Purchase Consideration in the GS Agreement is variable pursuant to the guidance set forth in ASC 606. Under ASC 606, purchase consideration is variable if the amount the Company will receive is contingent on future events occurring or not occurring, even though the amount itself is fixed.
The Minehut Purchase Consideration in the GS Agreement was variable pursuant to the guidance set forth in Accounting Standards Codification ("ASC") 606. Under ASC 606, purchase consideration is variable if the amount the Company will receive is contingent on future events occurring or not occurring, even though the amount itself is fixed.
As such, the September 2024 Series AAA Junior Investor Warrants do not meet the requirements for equity classification, and therefore, the fair value of the September 2024 Series AAA Junior Investor Warrants are recorded as a liability on the consolidated balance sheet and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.
As described at Note 7, the September 2024 Series AAA Junior Investor Warrants do not meet the requirements for equity classification, and therefore, the fair value of the September 2024 Series AAA Junior Investor Warrants are recorded as a liability on the balance sheet and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.
The RP Interest is payable on the RP Maturity Date. In the event of a prepayment of the RP Note by the Company, the RP Interest will be pro-rated for the period the RP Note is outstanding. The Company utilized the proceeds for working capital and general corporate purposes.
The RP Interest was payable on the RP Maturity Date. In the event of a prepayment of the RP Note by the Company, the RP Interest would be pro-rated for the period the RP Note was outstanding. The Company utilized the proceeds for working capital and general corporate purposes.
Excluding the noncash impairment charges and net contingent consideration charges, the decrease in total operating expense reflects decreases in cloud services and other technology platform costs and decreases in personnel, marketing and other corporate costs, resulting from ongoing cost reduction and optimization activities.
Excluding noncash charges, the decrease in total operating expense reflects decreases in cloud services and other technology platform costs and decreases in personnel, marketing and other corporate costs, resulting from ongoing cost reduction and optimization activities.
Results of Operations for the Fiscal Years Ended December 31, 2024 and 2023 We derived the financial data as of and for the Fiscal Years 2024 and 2023, set forth below, from our audited consolidated financial statements included elsewhere herein, and should be read in conjunction with those audited consolidated financial statements and related notes thereto, as well as the information found under this section.
Results of Operations for Fiscal Years 2025 and 2024 We derived the financial data as of and for the Fiscal Years 2025 and 2024, set forth below, from our audited financial statements included elsewhere herein, and should be read in conjunction with those audited financial statements and related notes thereto, as well as the information found under this section.
All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock, share data, per share data and related information contained in the financial statements have been retroactively adjusted to reflect the effect of the Reverse Split for all periods presented.
All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock, share data, per share data and related information contained in the financial statements have been retroactively adjusted to reflect the effect of the 2026 Reverse Split (and all other reverse splits described herein) for all periods presented.
Pursuant to the Equity Purchase Agreement, the Company has the right, but not the obligation, to sell to Hudson, and Hudson is obligated to purchase, up to $2.9 million of newly issued shares (the “Total Commitment”) of the Company’s common stock, from time to time during the term of the Equity Purchase Agreement, subject to certain limitations and conditions (the “Hudson Offering”).
Pursuant to the Hudson Equity Purchase Agreement, the Company had the right, but not the obligation, to sell to Hudson, and Hudson is obligated to purchase, up to $2.9 million of newly issued shares (the “Hudson Total Commitment”) of the Company’s common stock, from time to time during the term of the Hudson Equity Purchase Agreement, subject to certain limitations and conditions (the “Hudson Offering” or “Hudson ELOC”).
Pursuant to the Agile Loan Agreement: (i) the Agile Note matures 28 weeks from the Agile Effective Date; (ii) carries an aggregate total interest payment of approximately $0.78 million (the “Applicable Rate”), and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile Loan Agreement), interest shall accrue at a fixed per annum rate equal to the Applicable Rate plus five percent.
Pursuant to the Agile I Loan Agreement: (i) the Agile I Note matured 28 weeks from the Agile I Effective Date; (ii) carried an aggregate total interest payment of approximately $0.78 million (the “Applicable Rate”), and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile I Loan Agreement), interest accrued at a fixed per annum rate equal to the Applicable Rate plus five percent, or 42%.
Pursuant to the Agile II Loan Agreement: (i) the Agile II Note matures 32 weeks from the Agile II Effective Date; (ii) carries an aggregate total interest payment of approximately $1.05 million, and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile Loan Agreement), interest shall accrue at a fixed per annum rate equal to the applicable rate plus five percent.
Pursuant to the Agile II Loan Agreement: (i) the Agile II Note matured 32 weeks from the Agile II Effective Date; (ii) carried an aggregate total interest payment of approximately $1.05 million, and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile II Loan Agreement), interest accrued at a fixed per annum rate equal to the applicable rate plus five percent, or 42%.
The calculation of net loss per share for Fiscal Year 2024 and 2023 included noncash common stock dividend and deemed dividend (Fiscal Year 2023 only) related direct charges to accumulated deficit totaling $4.4 million and $7.9 million, respectively, as described at Note 2.
The calculation of net loss per share for Fiscal Year 2025 and 2024 included net noncash common stock dividend and deemed dividend (Fiscal Year 2025) related direct charges to accumulated deficit totaling $790,000 and ($4.4 million), respectively, as described at Note 2.
Upgrades or enhancements to existing internal-use software that result in additional functionality are capitalized and amortized on a straight-line basis over the applicable estimated useful life. Cash Flows from Financing Activities .
Maintenance and training costs are charged to expense as incurred. Upgrades or enhancements to existing internal-use software that result in additional functionality are capitalized and amortized on a straight-line basis over the applicable estimated useful life. Cash Flows from Financing Activities .
In connection with entering into the Agile Loan Agreement, the Company was required to pay an administrative fee of $125,000 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile II Note. $1.5 million of the Agile II Note was used to repay the remaining balance under the Agile Note, with net proceeds to the Company of approximately $875,000.
In connection with entering into the Agile II Loan Agreement, the Company was required to pay an administrative fee of $125,000 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile II Note and expensed in “other expense” in the statements of operations. $1.5 million of the Agile II Note was used to repay the remaining balance of principal and interest under the Agile I Note, with net proceeds to the Company of approximately $875,000.
Recent Accounting Pronouncements Refer to Note 2 to the accompany consolidated financial statements contained elsewhere in this Report. 64 Table of Contents Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Preparation of our financial statements requires management to make judgments and estimates.
Recent Accounting Pronouncements Refer to Note 2 to the accompanying financial statements contained elsewhere in this Report. Critical Accounting Estimates Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Preparation of our financial statements requires management to make judgements and estimates.
In connection with entering into the Agile Loan Agreement, the Company was required to pay an administrative fee of $92,500 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile Note.
In connection with entering into the Agile I Loan Agreement, the Company was required to pay an administrative fee of $92,500 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile I Note and expensed in “other expense” in the statements of operations.
As consideration for Hudson’s commitment to purchase shares of common stock under the Purchase Agreement, the Company issued to Hudson 300,000 shares of common stock, valued at $165,000, following the execution of the Equity Purchase Agreement (the “Commitment Shares”).
As consideration for Hudson’s commitment to purchase shares of common stock under the Hudson Purchase Agreement, the Company issued to Hudson 625 shares of common stock, valued at $159,000, following the execution of the Hudson Equity Purchase Agreement (the “Hudson Commitment Shares”).
Net cash used in operating activities during Fiscal Year 2024, primarily reflected our net loss, net of adjustments to reconcile net loss to net cash used in operating activities, which included noncash stock compensation charges of $1,289,000, depreciation and amortization charges of $2,612,000, net changes in fair value of warrant liabilities of ($1,115,000) and net changes in working capital of $1,364,000.
Net cash used in operating activities during Fiscal Year 2024, primarily reflected our net loss, net of adjustments to reconcile net loss to net cash used in operating activities, which included noncash stock compensation charges of $1.3 million, depreciation and amortization charges of $2.6 million, net changes in fair value of warrant liabilities of ($1.1 million) and net changes in working capital of $1.4 million.
The Belleau Interest that accrues on each respective Belleau Note is payable on each respective Belleau Maturity Date in the form of restricted shares of the Company’s Common Stock equal to 20% of the Belleau Principal, calculated at a price per share of $0.35.
The Belleau Interest that accrued on each respective Belleau Note was payable on each respective Belleau Maturity Date in the form of restricted shares of the Company’s common stock equal to 20% of the Belleau Principal, calculated at a price per share of $168.00.
Other Income (Expense) Gain on Sale of Minehut Assets On February 29, 2024, the Company sold its Minehut related assets (“Minehut Assets”) to GamerSafer, in a transaction approved by the Board.
Gain on Sale of Minehut Assets On February 29, 2024, the Company sold its Minehut Assets to GamerSafer in a transaction approved by the Board.
Compliance with NASDAQ Listing Rule 5550(a)(2) and 5620(a) On January 2, 2025, the Company received a letter (the “ Bid Price Letter ”) from the Listing Qualifications Staff of The Nasdaq Stock Market, LLC (“ Nasdaq ”) indicating that, based upon the closing bid price of the Company’s common stock, par value $0.001 per share (“ Common Stock ”), for the last 30 consecutive business days, the Company is not currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).
NASDAQ Listing Rule 5550(a)(2) On January 2, 2025, the Company received a letter (the “Bid Price Letter”) from the Listing Qualifications Staff of the Nasdaq Stock Market (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock, for 30 consecutive business days, the Company was not then currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).
Cost of revenue for Fiscal Year 2024 and 2023 was $10.1 million and $15.3 million, respectively, reflecting a year over year decrease of 34%, driven primarily by the related decrease in Fiscal Year 2024 revenues, compared to the prior year.
Cost of revenue for Fiscal Year 2025 and 2024 was $6.7 million and $10.1 million, respectively, reflecting a year over year decrease of 33%, driven primarily by the related decrease in Fiscal Year 2025 revenues, compared to the prior year.
Variations in any of these judgements and estimates could have a material impact on our financial results. 66 Table of Contents Modifications to Equity Linked Instruments During certain of the periods presented herein, holders of our preferred stock with outstanding Additional Investment Rights (“AIRs”) received (i) a six (6) month extension of the exercise period of such AIRs; and (ii) an adjustment to the conversion prices for such AIRs, to the existing conversion price floors for each respective subseries of preferred stock, as described in Note 6 to the consolidated financial statements.
Modifications to Equity Linked Instruments During certain of the periods presented herein, holders of our preferred stock with outstanding Additional Investment Rights (“AIRs”) received (i) a six (6) month extension of the exercise period of such AIRs; and (ii) an adjustment to the conversion prices for such AIRs, to the existing conversion price floors for each respective subseries of preferred stock, as described in Note 7 to the financial statements.
The proceeds received from the Agile II Note will be used to fund general working capital needs.
The proceeds received from the Agile II Note will be used to fund general working capital needs. Refer to Note 6 for additional details.
As of December 31, 2024 we maintain approximately 1,550 square feet of office space which is leased on a month-to-month basis. We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties.
As of December 31, 2025 we maintain approximately 200 square feet of office space which is leased on an annual basis at a rate of approximately $3,000 per month. We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties.
Refer to “Liquidity and Capital Resources” and Note 7 below for additional information. 44 Table of Contents Debt Financings Agile Promissory Note On November 8, 2024 (the “Agile Effective Date”), the Company entered into a loan agreement with Agile Capital Funding, LLC, as collateral agent (“Agile”)(“ the Agile Loan Agreement”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $1.85 million (the “Agile Note”).
Debt Financings Agile I On November 8, 2024 (the “Agile I Effective Date”), the Company entered into a loan agreement with Agile Capital Funding, LLC, as collateral agent (“Agile”) (“the Agile I Loan Agreement”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $1.85 million (the “Agile I Note”).
Amounts collected over and above the estimated purchase consideration recorded at contract inception, if any, will be recognized as additional gains on the sale of Minehut Assets when realized in future periods, up to the $1.0 million stated contractual amount of Minehut Purchase Consideration.
Amounts collected in excess of the estimated purchase consideration recorded at contract inception, up to the $1.0 million stated contractual amount of purchase consideration, are recognized as additional gains on the sale of Minehut Assets when realized.
Cost of revenue decreased $5.2 million, or 34%, driven primarily by the 35% decrease in related revenues for the fiscal year periods presented.
Cost of revenue decreased $3.3 million, or 33%, driven primarily by the 30% decrease in related revenues for the fiscal year periods presented.
Pursuant to the GS Agreement, the Company will receive $1.0 million of purchase consideration (“Minehut Purchase Consideration”) for the Minehut Assets, which amount will be paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement.
Pursuant to the GS Agreement entered into by and between Super League and GamerSafer, the Company received $1.0 million of purchase consideration for the Minehut Assets, which amount was paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement.
As such, the Placement Agent Warrants are not eligible for the scope exception under ASC 815, and therefore, the fair value of the Placement Agent Warrants are recorded as a liability on the consolidated balance sheet and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.
Placement Agent Warrants As described at Note 7, the Placement Agent Warrants issued in connection with the Series A Preferred Stock, Series AA Preferred Stock and Series AAA Preferred Stock (including the Exchange) are not eligible for the scope exception under ASC 815, and therefore, the fair value of the Placement Agent Warrants are recorded as a liability on the balance sheet and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.
Additional gains recorded subsequent to the sale and initial accounting for the transaction totaled $39,000, resulting in a cumulative gain on sale for Fiscal Year 2024 totaling $183,000. 55 Table of Contents Change in Fair Value of Warrant Liability Series AAA Junior -3 and Series AAA Junior – 4 Warrants The Series AAA Junior-3 and Series AAA Junior-4 subscription agreements entered into in September 2024, included the sale of an aggregate of 1,096 units (the “Units”), each Unit consisting of (i) one share of newly designated Series AAA-3 Junior Convertible Preferred Stock or Series AAA-4 Junior Convertible Preferred Stock, as reflected in the table above, and (ii) a warrant to purchase 1,000 shares of the Company’s common stock (the “September 2024 Series AAA Junior Investor Warrants”), at a purchase price of $1,000 per Unit, for aggregate gross proceeds to the Company of approximately $1,096,000.
Series AAA Junior -3 and Series AAA Junior – 4 Warrants The Series AAA Junior-3 and Series AAA Junior-4 subscription agreements entered into in September 2024, included the sale of an aggregate of 1,096 units (the “Units”), each Unit consisting of (i) one share of newly designated Series AAA-3 Junior Convertible Preferred Stock or Series AAA-4 Junior Convertible Preferred Stock, as reflected in the table above, and (ii) a warrant to purchase 3 shares of the Company’s common stock (the “September 2024 Series AAA Junior Investor Warrants”), at a purchase price of $1,000 per Unit, for aggregate gross proceeds to the Company of approximately $1,096,000.
The fair value of the warrants described above was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions for the applicable dates: December 31, December 31, 2024 2023 Expected Volatility 100% - 101 % 98 % Risk–free interest rate 4.27% - 4.38 % 3.84 % Dividend yield - % - % Expected life of options (in years) 2.71 - 4.74 4.5 - 5.0 Significant judgements and estimates may required in connection with determining the classification of warrants between liabilities and equity, as well as in connection with the assumptions utilized for the expected volatility, risk free interest rate and term in the Black Scholes calculations used to value warrants outstanding at each balance sheet date, if liability classified.
The fair value of the warrants described above was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions for the applicable dates: Significant judgements and estimates may be required in connection with determining the classification of warrants between liabilities and equity, as well as in connection with the assumptions utilized for the expected volatility, risk free interest rate and term in the Black Scholes calculations used to value warrants outstanding at each balance sheet date, if liability classified.
As a percent of revenue, gross profit for Fiscal Year 2024 was 38%, relatively consistent with the 39% gross profit percentage for the prior year period. Total operating expense for Fiscal Year 2024 decreased to $22.9 million, compared to $42.6 million in the comparable prior year period.
As a percentage of revenue, gross profit for Fiscal Year 2025 was 40%, compared to a gross profit percentage of 38% for the prior year period. 39 Table of Contents Total operating expense for Fiscal Year 2025 decreased to $17.6 million, compared to $22.9 million in the comparable prior year period.
The proceeds received from the Agile Note were used to fund general working capital needs.
The proceeds received from the Agile I Note were used to fund general working capital needs. Refer to Note 6 for additional details.
The decrease in revenue for the periods presented reflected a mix of industry softness in ad sales, stemming from macro environmental factors including consumer spending softness, continued market education and adoption of immersive platforms as a marketing channel, structural shifts in platform ad ecosystems, the shift of certain revenues and program start delays to future periods by advertisers, and a reduction in Minehut related media sales revenues in connection with the sale of our Minehut digital property in the first quarter of 2024.
The decrease in revenue for Fiscal Year 2025 reflected a mix of industry softness in ad sales, stemming from macro environmental factors and uncertainties, including uncertainties around the impact of shifting tariff policies, consumer spending softness, continued need for market education and adoption of immersive platforms as a marketing channel, the shift of certain revenues and program start delays to future periods by advertisers, and a reduction in direct to consumer revenues due to the sale of our Minehut digital property in the first quarter of 2024, and the sale of our Mineville digital property in May 2025.
Cash flows from investing activities were comprised of the following for the periods presented: Fiscal Year Ended December 31, 2024 2023 Cash paid in connection with the acquisition of Melon, net $ - $ (150,000 ) Proceeds from sale of Minehut Assets 192,000 - Purchase of property and equipment (23,000 ) (8,000 ) Capitalization of software development costs (452,000 ) (650,000 ) Acquisition of other intangible and other assets - (17,000 ) Net cash used in investing activities $ (283,000 ) $ (825,000 ) Sale of Minehut Assets.
Cash flows from investing activities were comprised of the following for the periods presented: Fiscal Year Ended December 31, 2025 2024 Proceeds from sale of Mineville Assets 350,000 $ - Proceeds from sale of Minehut Assets 808,000 192,000 Purchase of property and equipment - (23,000 ) Capitalization of software development costs (207,000 ) (452,000 ) Acquisition of other intangible and other assets (35,000 ) - Net cash provided by (used in) investing activities $ 916,000 $ (283,000 ) Sale of Mineville Assets.
Upon the occurrence of an Event of Default, the RP Note will bear interest at the default interest rate of 45% per annum, and upon Purchaser’s written notice to the Company, all payments of RP Principal and RP Interest will become immediately due and payable. 1800 Diagonal Lending, LLC On March 26, 2025 (the “Diagonal Effective Date”), the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assigns (“Diagonal”) entered into a Securities Purchase Agreement (the “Diagonal Agreement”), pursuant to which the Company issued a Convertible Promissory Note (the “Diagonal Note”) in the principal amount of $300,000 (the “Diagonal Principal”), for which the Diagonal Note, among other things, (a) matures on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal Maturity Date”), (b) accrues interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal Note was issued (the “Diagonal Issuance Date”) until the principal and interest becomes due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) interest begins to accrue on the Diagonal Issuance Date but shall not be payable until the Diagonal Note becomes payable, and (d) interest will accrue at a rate of 22% per annum for any amount of principal or interest which is not paid as required under the Diagonal Note, or during an Event of Default.
The fair value of the common stock and cash payments exceeded the fair value of the Agile II Note on the date of the exchange resulting in a loss on extinguishment of a liability totaling $256,000, which is included in other income (expense) in the statements of operations. 1800 Diagonal Lending I On March 26, 2025 (the “Diagonal Effective Date”), the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assignees (“Diagonal”) entered into a Securities Purchase Agreement (the “Diagonal Agreement”), pursuant to which the Company issued a Convertible Promissory Note (the “Diagonal Note”) in the principal amount of $300,000 (the “Diagonal Principal”), for which the Diagonal Note, among other things, (a) matured on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal Maturity Date”), (b) accrued interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal Note was issued (the “Diagonal Issuance Date”) until the principal and interest became due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) began to accrue interest on the Diagonal Issuance Date but was not payable until the Diagonal Note became payable, and (d) interest accrued at a rate of 22% per annum for any amount of principal or interest which is not paid as required under the Diagonal Note, or during an Event of Default.
The decrease in revenue for the periods presented reflected a mix of industry softness in ad sales, stemming from macro environmental factors including consumer spending softness, continued market education and adoption of immersive platforms as a marketing channel, structural shifts in platform ad ecosystems, the shift of certain revenues and program start delays to future periods by advertisers, and a reduction in Minehut related media sales revenues in connection with the sale of our Minehut digital property in the first quarter of 2024. ● Media and advertising revenue decreased $4.2 million, or 39%, to $6.7 million, compared to $10.9 million in the comparable prior year period.
The decrease in revenue for the periods presented reflected a mix of industry softness in ad sales, stemming from macro environmental factors and uncertainties, including uncertainties around the impact of shifting tariff policies, consumer spending softness, continued need for market education and adoption of immersive platforms as a marketing channel, the shift of certain revenues and program start delays to future periods by advertisers, a strategic decrease in lower margin influencer marketing revenues and a reduction in direct to consumer revenues due to the sale of our Minehut digital property in the first quarter of 2024 and the sale of our Mineville digital property in May 2025. ● Media and advertising revenue decreased $1.1 million, or 16%, to $5.6 million, compared to $6.7 million in the comparable prior year period.
Cash Flows for the Fiscal Years Ended December 31, 2024 and 2023 The following table summarizes the change in cash and cash equivalents for the periods presented: Fiscal Year Ended December 31, 2024 2023 Net cash used in operating activities $ (11,462,000 ) $ (15,489,000 ) Net cash used in investing activities (283,000 ) (825,000 ) Net cash provided by financing activities 5,446,000 21,441,000 Increase (decrease) in cash and cash equivalents (6,299,000 ) 5,127,000 Cash and cash equivalents, at beginning of period 7,609,000 2,482,000 Cash and cash equivalents, at end of period $ 1,310,000 $ 7,609,000 Cash Flows from Operating Activities.
Cash Flows for the Fiscal Years Ended December 31, 2025 and 2024 The following table summarizes the change in cash and cash equivalents for the periods presented: Fiscal Year Ended December 31, 2025 2024 Net cash used in operating activities $ (10,672,000 ) $ (11,462,000 ) Net cash provided by (used in) investing activities 916,000 (283,000 ) Net cash provided by financing activities 22,836,000 5,446,000 Change in cash and cash equivalents 13,080,000 (6,299,000 ) Cash and cash equivalents, at beginning of period 1,310,000 7,609,000 Cash and cash equivalents, at end of period $ 14,390,000 $ 1,310,000 48 Table of Contents Cash Flows from Operating Activities.
As a result, a gain on extinguishment totaling $336,000 was recorded in the consolidated statements of operations, and credited to additional paid in capital (included in “Other” in the consolidated statements of stockholder’s equity), for Fiscal Year 2024, primarily comprised of the fair value of the 262,501 shares of restricted stock to be issued, as described above.
As a result, a gain on extinguishment totaling $336,000 was recorded in the statement of operations, and credited to additional paid-in capital (included in “Other” in the statement of stockholder’s equity), for the year ended December 31, 2024, primarily comprised of the fair value of the 547 shares of restricted stock (based on closing price of our common stock on the date of issuance of the Super Biz Note) to be issued, as described above.
On the Diagonal Effective Date, the Company and Diagonal) entered into the Diagonal Agreement, pursuant to which the Company issued the Diagonal Note in the principal amount of $300,000, for which the Diagonal Note, among other things, (a) matures on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal Maturity Date”), (b) accrues interest at a rate of 10% per annum on the unpaid principal balance from the Diagonal Issuance Date until the principal and interest becomes due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) interest begins to accrue on the Diagonal Issuance Date but shall not be payable until the Diagonal Note becomes payable, and (d) interest will accrue at a rate of 22% per annum for any amount of principal or interest which is not paid as required under the Diagonal Note, or during an Event of Default.
As of December 31, 2025 the Diagonal Note was fully extinguished. 55 Table of Contents 1800 Diagonal Lending II On May 12, 2025 (the “Diagonal II Effective Date”), the Company and Diagonal entered into a Securities Purchase Agreement (the “Diagonal II Agreement”), pursuant to which the Company issued a Convertible Promissory Note (the “Diagonal II Note”) in the principal amount of $145,200 (the “Diagonal II Principal”), for which the Diagonal II Note, among other things, (a) matured on February 15, 2026 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal II Maturity Date”), (b) accrued interest at a rate of 10% per annum on the unpaid principal balance from the date the Diagonal II Note was issued (the “Diagonal II Issuance Date”) until the principal and interest became due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) interest began to accrue on the Diagonal II Issuance Date but was not payable until the Diagonal II Note became payable, and (d) interest accrued at a rate of 22% per annum for any amount of principal or interest which is not paid as required under the Diagonal II Note, or during an Event of Default.
However, as described above we continue to be a “smaller reporting company.” As a result of no longer qualifying for “emerging growth company” status, our independent auditors, commencing with their audit of our consolidated financial statements as of and for the year ended December 31, 2024, are required by the Public Company Accounting Oversight Board (“PCAOB”) to include a description of Critical Accounting Matters (“CAMs”) as a component of their audit opinion commencing with the audit of our consolidated financial statements for Fiscal Year 2024. 67 Table of Contents A CAM is defined as any matter arising from the audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee, as a component of typical and customary matters required to be communicated to the audit committee each year and that: ● Relates to accounts or disclosures that are material to the financial statements; and ● Involved especially challenging, subjective, or complex auditor judgment.
However, as described above we continue to be a “smaller reporting company.” As a result of no longer qualifying for “emerging growth company” status, our independent auditors, commencing with their audit of our financial statements as of and for the year ended December 31, 2024, are required by the Public Company Accounting Oversight Board (“PCAOB”) to include a description of Critical Audit Matters (“CAMs”) as a component of their audit opinion commencing with the audit of our financial statements for Fiscal Year 2024.
Common Stock Issuances On October 24, 2024, the Company entered into a securities purchase agreement with an accredited investor for the registered direct offering of an aggregate of 1,136,364 shares of the Company’s common stock, par value $0.001 per share (the “Shares”), at a purchase price of $0.88 per Share.
Equity Financings - Common Stock Issuances - Fiscal Year Ended December 31, 2024 On October 24, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a certain accredited investor for the registered direct offering of an aggregate of 2,368 shares of the Company’s common stock, par value $0.001 per share (the “Shares”), at a purchase price of $422.40 per Share (the “Registered Direct Offering”).
Changes in working capital primarily reflected the impact of the settlement of receivables and payables in the ordinary course and the payment of the cash portion of the Super Biz Contingent Consideration, as described above. 60 Table of Contents Cash Flows from Investing Activities.
Changes in working capital primarily reflected the impact of the settlement of receivables and payables in the ordinary course. Cash Flows from Investing Activities.
Use of net proceeds from the Common Stock Offering for the periods presented included working capital and general corporate purposes, including sales and marketing activities and product development.
The Company utilized the net proceeds from the Hudson Offering for working capital and general corporate purposes, including sales and marketing activities, product development and capital expenditures.
On February 10, 2025 (the “Agile II Effective Date”), the Company entered into a Business Loan and Security Agreement (the “Agile II Loan Agreement”), with the Collateral Agent and Agile, pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $2.5 million (the “Agile II Note”).
On February 10, 2025, in connection with entering into the Agile II Loan Agreement as described below, the Company paid the remaining balance of the Agile I Note, including interest for the remaining term, totaling $1.5 million. 54 Table of Contents Agile II On February 10, 2025 (the “Agile II Effective Date”), the Company entered into a Business Loan and Security Agreement (the “Agile II Loan Agreement”), with Agile Capital Funding, LLC as collateral agent (“Collateral Agent”), and Agile Lending, LLC (collectively “Agile”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $2.5 million (the “Agile II Note”).
On August 23, 2023, the Company issued the Firm Securities and closed the Offering at a public price of $2.60 per share, and $2.58 per share underlying each Pre-Funded Warrant, for net proceeds to the Company of approximately $1.8 million after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
On May 12, 2025, the Company issued the firm May I Securities and closed the May I Offering at a public price of $81.60 per share, for net proceeds to the Company of approximately $700,400 after deducting underwriting discounts, commissions and estimated offering expenses payable by the Company.
Executive Summary Revenue for Fiscal Year 2024 and 2023 totaled $16.2 million and $25.1 million, respectively, reflecting a year over year decrease of 35%.
Summary Financial Results Revenue for Fiscal Year 2025 and 2024 totaled $11.3 million and $16.2 million, respectively, reflecting a year over year decrease of 30%.
The Diagonal Note was issued with an OID of 4.75%, with net proceeds to the Company of approximately $279,000 after giving deducting the OID, reimbursement of Diagonal’s expenses in an amount equal to $7,000, and other estimated offering expenses. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.
The Diagonal Note was issued with an Original Issue Discount of 4.75% (the “OID”), with net proceeds to the Company of approximately $279,000 after deducting the OID, reimbursement of Diagonal’s expenses in an amount equal to $7,000 (expensed in the statements of operations for the year ended December 31, 2025), and other estimated offering expenses.
On February 29, 2024, the Company sold its Minehut Assets to GamerSafer as described above. Pursuant to the GS Agreement, the Company will receive $1.0 million of purchase consideration for the Minehut Assets, which amount will be paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement.
Pursuant to the GS Agreement, the Company received $1.0 million of purchase consideration for the Minehut Assets, which amount was paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement. During Fiscal Years 2025 and 2024 we received Minehut Purchase Consideration payments totaling $808,000 and $192,000, respectively.
We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our consolidated financial statements included elsewhere herein.
We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our financial statements included elsewhere herein. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Global Leisure Partners, LLC, and Blackwatch Advisors, LLC vs. Super League Enterprise, Inc.
The Company initially recorded a receivable for the total estimated Minehut Purchase Consideration totaling $619,000, of which $224,000 was included in prepaid expense and other current assets and $395,000 was included in other receivables in noncurrent assets, and recognized a gain on sale of the Minehut Assets totaling $144,000, which was included in other income in the consolidated statements of operations.
The Company recorded a receivable for the total estimated Minehut Purchase Consideration totaling $619,000 and recognized an initial gain on sale of the Minehut Assets totaling $144,000, which is included in other income in the statement of operations for the year ended December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, impairment of intangibles, stock-based compensation expense, capitalized internal-use-software costs, accounting for business combinations and related contingent consideration, accounting for convertible debt, including estimates and assumptions used to calculate the fair value of debt instruments, accounting for convertible preferred stock, including modifications and exchanges of equity and equity-linked instruments, accounting for warrant liabilities and accounting for income taxes and valuation allowances against net deferred tax assets, require its most difficult, subjective, or complex judgments and estimates.
Biggest changeThe Company believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, impairment of intangibles, stock-based compensation expense, capitalized internal-use-software costs, accounting for business combinations and related contingent consideration, accounting for convertible debt, including estimates and assumptions used to calculate the fair value of debt instruments, accounting for convertible preferred stock, including modifications and exchanges of equity and equity-linked instruments, accounting for warrant liabilities and accounting for income taxes and valuation allowances against net deferred tax assets, require its most difficult, subjective, or complex judgements and estimates.

Other SLE 10-K year-over-year comparisons