{"url_path":"/sec/chai/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 KEY INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1649009/0001493152-26-023908-index.html","accession_number":"0001493152-26-023908","cik":"0001649009","ticker":"CHAI","issuer_name":"Core AI Holdings, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1649009/0001493152-26-023908-index.html","primary_entity_key":"0001649009","primary_entity_name":"Core AI Holdings, Inc."},"word_count":23314,"has_tables":true,"body_markdown":"**ITEM\n3. KEY INFORMATION**\n\n \n\n**A.**\n**[Reserved]**\n\n \n\n**B.**\n**Capitalization\nand Indebtedness**\n\n \n\nNot\napplicable.\n\n \n\n**C.**\n**Reasons\nfor the Offer and Use of Proceeds**\n\n \n\nNot\napplicable.\n\n \n\n**D.**\n**Risk\nFactors**\n\n \n\nYou\nshould carefully consider the risks described below, together with all of the other information in this Annual Report. The risks described\nbelow are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be\nimmaterial may also materially and adversely affect our business operations. If any of these risks actually occurs, our business and\nfinancial condition could suffer and the price of our Common Shares could decline.\n\n \n\n**Summary\nof Risk Factors**\n\n \n\n**Risks\nRelated to Our Financial Condition and Capital Requirements**\n\n \n\n \n●\nWe\nhave a history of operating losses and we may never achieve or maintain profitability.\n\n \n \n \n\n \n●\nOur\nconsolidated audited financial statements for the years ended December 31, 2025 and December 31, 20024, both include a “going\nconcern” explanatory paragraph expressing substantial doubt about our ability to continue as an ongoing business for the next\ntwelve months.\n\n** **\n\n**Risks\nRelated to Our Core Gaming Business and Industry**\n\n \n\n \n●\nWe\nhave a limited operating history, especially with respect to our Core Gaming apps, which makes it difficult to evaluate our current\nbusiness and future performance and the risks we may encounter.\n\n \n \n \n\n \n●\nThe\nfailure to attract new users, the loss of users, or a reduction in playing by these users could adversely affect our business, financial\ncondition, and results of operations.\n\n \n \n \n\n \n●\nSecurity\nbreaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other\ncyber incidents could harm our reputation and adversely affect our business.\n\n \n \n \n\n \n●\nThe\nmobile app industry is intensely competitive. If clients or users prefer our competitors’ products or services over our own,\nour business, financial condition, and results of operations could be adversely affected.\n\n \n \n \n\n \n●\nThe\nmobile app industry is subject to rapid technological change, and if we do not adapt to, and appropriately allocate our resources\namong, emerging technologies and business models, our business, financial condition, and results of operations could be adversely\naffected.\n\n \n \n \n\n \n●\nOur\ntechnologies, apps, and internal systems rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities\nin these systems, or failures to address or mitigate technical limitations in our systems, could adversely affect our business, financial\ncondition, and results of operations.\n\n \n\n \n●\nOur\nbusiness depends in part on our ability to maintain and scale our apps, and any significant disruption to our technologies or apps\ncould damage our reputation, result in a potential loss of engagement, and adversely affect our business, financial condition, and\nresults of operations.\n\n \n \n \n\n \n●\nIf\nwe are unable to launch new apps and successfully monetize them, or continue to improve the experience and monetization of our existing\napps, our business, financial condition, and results of operations could be adversely affected.\n\n \n \n \n\n \n●\nIf\nwe fail to retain existing users or add new users cost-effectively, or if our users decrease their level of engagement with our apps,\nour business, financial condition, and results of operations could be adversely affected.\n\n \n \n \n\n \n●\nWe\nare highly dependent on Moremo Network Limited, a PRC company (“Moremo”) and the former parent company of Newbyera\nTechnology Limited, our Hong Kong operating subsidiary (“Newbyera”), to provide us with labor and back-office\noperations, and any disruption to the provision of such outsourced services could materially and adversely affect our business,\nfinancial condition, and results of operations.\n\n \n \n\n \n●\nWe\nhave entered into strategic partnerships with mobile gaming developers, and a failure to maintain such relationships may harm our\nability to launch new apps as well as our brand and reputation.\n\n \n \n \n\n \n●\nWe\nrely on third-party platforms to distribute our apps and collect revenue, and if our ability to do so is harmed, or such third-party\nplatforms change their policies in such a way that restricts our business, increases our expenses, or limits the information we derive\nfrom our apps, our business, financial condition, and results of operations could be adversely affected.\n\n \n\n1\n\n \n\n \n\n \n●\nOur\nrevenue has been concentrated in various ways and the loss of, or a significant reduction in, any such revenue source, or our failure\nto successfully expand and diversify our revenue sources could adversely affect our business, financial condition, and results of\noperation\n\n \n \n \n\n \n●\nWe\nhave experienced recent rapid growth, which may not be indicative of our future growth. We may be unable to effectively manage the\ngrowth of our business, which could adversely affect our business, financial condition, and results of operations.\n\n \n \n \n\n \n●\nOur\ninternational operations are subject to increased challenges and risks.\n\n \n \n \n\n \n●\nOur\nbusiness is subject to economic, market and geopolitical conditions as well as to natural disasters beyond our control.\n\n \n \n \n\n \n●\nWe\nanticipate incurring higher operating expenses in the future, and we may not be able to achieve or maintain our profitability in\nany given period. If we cannot achieve or maintain our profitability, our business could be adversely affected.\n\n \n \n \n\n \n●\nWe\ngenerally do not have long-term agreements with our clients.\n\n \n \n \n\n \n●\nThe\nproliferation of “cheating” programs and scam offers that seek to exploit our mobile games and users may adversely affect\ngame-playing experiences and lead users to stop playing our mobile games. Our failure to maintain adequate customer support may enhance\nthese risks.\n\n \n\n**Risks\nRelated to Legal and Regulatory Matters**\n\n \n\n \n●\n\nWe\nare subject to laws and regulations concerning privacy, information security, data protection, consumer protection, advertising, tracking,\ntargeting, and protection of minors, and these laws and regulations are continually evolving. Our actual or perceived failure to comply\nwith these laws and regulations could adversely affect our business, financial condition, and results of operations.\n\n \n \n \n\n \n●\nOur\nbusiness is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing, which could subject\nus to claims or otherwise adversely affect our business, financial condition, and results of operations.\n\n \n \n \n\n \n●\nThe\ndevelopment and use of AI in our business, combined with an uncertain regulatory environment, may adversely affect our business,\nreputation, financial condition or results of operations.\n\n \n \n \n\n \n●\nWe\nare subject to the Foreign Corrupt Practices Act, and similar anti-corruption and anti- bribery laws, and non-compliance with such\nlaws could subject us to criminal penalties or significant fines and adversely affect our business and reputation.\n\n \n \n \n\n \n●\nWe\nare subject to governmental export controls and economic sanctions laws that could impair our ability to compete in global markets\nor subject us to liability if we violate the controls.\n\n \n\n**Risks\nRelated to Hong Kong**\n\n* *\n\n●The\nChinese government, in general, could exercise significant oversight and discretion over\nthe conduct of our business and has made statements indicating an intent to exert more oversight\nand control over offerings that are conducted overseas and over foreign investment in China-based\nissuers.\n\n \n\n●We\nare subject to risks relating to economic, political, legal, and social conditions in Hong\nKong.\n\n \n\n●The\nLaw of the PRC on Safeguarding National Security in the Hong Kong Special Administrative\nRegion (the “Hong Kong National Security Law”) could impact Newbyera’s\noperations in Hong Kong.\n\n \n\n**Risks\nRelated to our Planned Data Center Business**\n\n** **\n\n●We\nhave no operating history which can be evaluated with respect to our planned AI data center\nbusiness.\n\n \n\n●We\nintend to primarily rely on joint ventures and similar collaborations with third parties\nto identify potential development sites, and design, build and manage or sell HPC and AI\ndata centers domestically and internationally.\n\n \n\n●The\ndesign, building and management of HPC and AI data centers is capital intensive and there\ncan be no assurance that the necessary financing can be secured for development efforts.\n\n** **\n\n●The\nsuccess of any data center project will be dependent in large part on the ability to purchase\nsignificant quantities of electric power on commercially reasonable terms. Failure to secure\nelectric power in sufficient quantities and at commercially reasonable rates can adversely\naffect the operation of any data center, as well as our business, financial condition and\nresults of operations.\n\n \n\n●Our\nplanned HPC and AI data center business is subject to rapid changes in customer requirements,\ntechnology standards and infrastructure design, which may increase costs, delay development\nor make our facilities less competitive.\n\n** **\n\n●We\nmay be unable to procure, install or integrate specialized equipment required for HPC and\nAI workloads, including electrical, cooling, networking and other long-lead-time components,\non acceptable terms or at all.\n\n \n\n●Tariffs,\ntrade restrictions, import duties, export controls and other changes in trade policy may\nincrease our capital costs, disrupt our supply chain and adversely affect the development\nand operation of our data centers.\n\n** **\n\n●A\ndecline in demand for HPC and AI data center capacity or an oversupply of such capacity could\nadversely affect our business, financial condition and results of operations.\n\n \n\n●Many\nof the risks set forth in this “Item 3. Key Information – D. Risk Factors”\nand elsewhere in this Annual Report relating to our Core Gaming business, are equally as\napplicable to our planned data center business.\n\n \n\n2\n\n \n\n \n\n**Risks\nRelated to Our Intellectual Property**\n\n \n\n \n●\nFailure\nto protect or enforce our proprietary and intellectual property rights or the costs involved in such enforcement could adversely\naffect our business, financial condition, and results of operations.\n\n \n \n \n\n \n●\nWe\nare, and may in the future be, subject to intellectual property disputes, which are costly to defend and could require us to pay\nsignificant damages and could limit our ability to use certain technologies in the future.\n\n \n \n \n\n \n●\nSome\nof our development tools contain open source software, and we license some of our software through open source projects, which may\npose particular risks to our proprietary software, products, and services in a manner that could adversely affect our business, financial\ncondition, and results of operations.\n\n \n \n \n\n \n●\nOur\nability to acquire and maintain licenses to intellectual property may affect our business, financial condition, and results of operations.\nCompetition for these licenses may make them more expensive and increase our costs.\n\n \n\n**Risks\nRelated to Ownership of Our Securities**\n\n \n\n●We\ndo not know whether an active, liquid and orderly trading market will develop for our Common\nShares or what the market price of our Common Shares will be and as a result it may be difficult\nfor you to sell your Common Shares.\n\n \n\n●We\nexpect that our stock price will fluctuate significantly.\n\n \n\n \n●\nWe do not expect to pay any cash dividends for the foreseeable\nfuture.\n\n \n\n●If\na substantial number of shares become available for sale and are sold in a short period of\ntime, the market price of our Common Shares could decline.\n\n \n\n●If\nwe are not able to comply with the applicable continued listing requirements or standards\nof Nasdaq, Nasdaq could delist our Common Shares.\n\n \n\n●If\nour Common Shares become subject to the penny stock rules, it may be more difficult to sell\nour Common Shares.\n\n \n\n●Because\nwe are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards\napplicable to U.S. issuers, you will have less protection than you would have if we were\na domestic issuer.\n\n \n\n**General\nRisk Factors**\n\n \n\n●The\nunfavorable outcome of any future litigation, arbitration or administrative action could\nhave a significant adverse impact on our financial condition or results of operations.\n\n \n\n●If\nsecurities or industry analysts do not publish research or publish inaccurate or unfavorable\nresearch about our business, our stock price and trading volume could decline.\n\n \n\n●We\nmay lose our foreign private issuer status in the future, which could result in significant\nadditional costs and expenses.\n\n \n\n●We\nincur significant increased costs as a result of operating as a public company in the United\nStates, and our management is required to devote substantial time to new compliance initiatives.\n\n \n\n●If\nwe fail to maintain proper and effective internal controls, our ability to produce accurate\nfinancial statements on a timely basis could be impaired.\n\n \n\n**Risks\nRelated to Our Financial Position and Capital Requirements**\n\n \n\n**We\nhave a history of operating losses and we may never achieve or maintain profitability.**\n\n \n\nWe\nhave a limited operating history and a history of losses from operations. As of December 31, 2025, we had an accumulated deficit of $31,963,651.\nOur existing cash and cash equivalents will be insufficient to fully fund our business plan. Our ability to achieve profitability will\ndepend on whether we can obtain additional capital when we need it, complete the development of our technology, obtain required regulatory\napprovals and continue to develop arrangements with channel partners. There can be no assurance that we will ever achieve profitability.\n\n \n\n**We\nmay require additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on\nacceptable terms, or at all, could harm our business, operating results, financial condition and prospects.**\n\n \n\nWe\nintend to continue to make substantial investments to fund our business and support our growth. In addition, we may require additional\nfunds to respond to business challenges, including the need to develop new features or enhance our solutions, improve our operating infrastructure\nor acquire or develop complementary businesses and technologies. As a result, in addition to the revenues we generate from our business,\nwe may need to engage in additional equity or debt financing to provide the funds required for these and other business endeavors. If\nwe raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant\ndilution, and any new equity securities issue could have rights, preferences and privileges superior to those of holders of our Common\nShares. Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities\nand other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business\nopportunities, including potential acquisitions. We may not be able to obtain such additional financing on terms favorable to us, if\nat all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue\nto support our business growth and to respond to business challenges could be significantly impaired, and our business may be adversely\nimpacted. In addition, our inability to generate or obtain the financial resources needed may require us to delay, scale back, or eliminate\nsome or all of our operations, which may have a significant adverse impact on our business, operating results and financial condition.\n\n \n\n**Our\nindependent registered public accountants have noted that we may not survive as a going concern.**\n\n \n\nOur\nindependent registered public accountants have included a “going concern” explanatory paragraph in its report on our\nconsolidated financial statements for the years ended December 31, 2025 and December 31, 2024, concurring with management’s\nrepresentation of expressing substantial doubt about our ability to continue as an ongoing business for the next twelve months. Our\nconsolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we cannot\nsecure the financing needed to continue as a viable business, our shareholders may lose some or all of their investment in\nus.\n\n \n\n3\n\n \n\n \n\n**Risks\nRelated to our Core Gaming Business and Industry**\n\n \n\n**We\nhave a limited operating history with respect to our Core Gaming apps, which makes it difficult to evaluate our current business\nand future performance and the risks we may encounter.**\n\n \n\nOur\nlimited operating history with respect to our Core Gaming apps, may make it difficult to evaluate our current business and\nour future performance. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies\nin rapidly changing industries, including our ability to:\n\n \n\n \n●\naccurately\nforecast our revenue and plan our operating expenses;\n\n \n \n \n\n \n●\nattract\nnew and retain existing users of our apps;\n\n \n \n \n\n \n●\nsuccessfully\ncompete with current and future competitors, some of whom are clients;\n\n \n \n \n\n \n●\nsuccessfully\nexpand our Core Gaming business in existing markets and enter new markets and geographies;\n\n \n \n \n\n \n●\nsuccessfully\nexpand partnerships;\n\n \n \n \n\n \n●\ndevelop\na scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage of our apps by consumers,\nas well as the deployment of new features and services;\n\n \n \n \n\n \n●\ncomply\nwith existing and new laws and regulations applicable to our business;\n\n \n \n \n\n \n●\nanticipate\nand respond to macroeconomic changes and changes in the markets in which we operate;\n\n \n \n \n\n \n●\nestablish\nand maintain our brand and reputation;\n\n \n \n \n\n \n●\nadapt\nto rapidly evolving trends in the ways businesses and consumers interact with technology;\n\n \n \n \n\n \n●\neffectively\nmanage our rapid growth;\n\n \n \n \n\n \n●\navoid\ninterruptions or disruptions in our Core Gaming technologies or apps; and\n\n \n \n \n\n \n●\nhire,\nintegrate, and retain key personnel.\n\n \n\n4\n\n \n\n \n\nFurther,\nbecause we have limited historical financial data and operate in a rapidly evolving market, any financial planning and forecasting,\nincluding predictions about our future revenue and expenses, may not be as accurate as they would be if we had a longer operating\nhistory or operated in a more predictable market. If our assumptions regarding these risks and uncertainties, which we use to plan\nand operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could\ndiffer materially from our expectations. If we fail to address the risks and uncertainties that we face, including those described\nin this “Item 3. Key Information – D. Risk Factors” and elsewhere in this Annual Report, our\nbusiness, financial condition, and results of operations could be adversely affected.\n\n \n\nOur\nresults of operations have fluctuated in the past and are likely to fluctuate significantly from quarter-to-quarter and year-to-year\nin the future for a variety of reasons, many of which are outside of our control and difficult to predict. As a result, you should not\nrely upon our historical results of operations as indicators of future performance. Numerous factors can influence our results of operations,\nincluding:\n\n \n\n \n●\nour\nability to maintain and grow our business client and user bases;\n\n \n \n \n\n \n●\nchanges\nto our technologies, apps, or other offerings, or the development and introduction of new software or development of new mobile apps\nby our studios or our competitors;\n\n \n \n \n\n \n●\nchanges\nto the policies or practices of companies or governmental agencies that determine access to third-party platforms, such as the Apple\nApp Store and the Google Play Store, apps, website, or the internet generally;\n\n \n \n \n\n \n●\nchanges\nto the policies or practices of third-party platforms, such as the Apple App Store and the Google Play Store, including with respect\nto Apple’s Identifier for Advertisers (“IDFA”), which helps advertisers assess the effectiveness of their advertising\nefforts, and with respect to transparency regarding data processing;\n\n \n \n \n\n \n●\nour\nability to achieve the anticipated synergies from our strategic acquisitions and effectively integrate new assets and businesses\nacquired by us;\n\n \n \n \n\n \n●\nthe\nactions of our competitors, both with respect to their own offerings and, to the extent such competitors are also our clients, with\nrespect to their use of our services;\n\n \n \n \n\n \n●\ncosts\nand expenses related to the strategic acquisitions and partnerships, including costs related to integrating mobile gaming studios\nor other companies that we acquire, as well as costs and expenses related to the development of our technologies, BI platform, or\napps;\n\n \n \n \n\n \n●\nour\nability to maintain and increase profitability;\n\n \n \n \n\n \n●\nincreases\nin and timing of operating expenses that we may incur to expand our operations and to remain competitive;\n\n \n \n \n\n \n●\nchanges\nin the legislative or regulatory environment, including with respect to privacy and data protection, or actions by governments or\nregulators, including fines, orders, or consent decrees;\n\n \n \n \n\n \n●\ncharges\nassociated with impairment of any assets on our balance sheet;\n\n \n \n \n\n \n●\nadverse\nlitigation judgments, settlements, or other litigation-related costs and the fees associated with investigating and defending claims;\n\n \n \n \n\n \n●\nthe\noverall tax rate for our business, which may be affected by the mix of income we earn in the United States and in jurisdictions with\ncomparatively lower tax rates;\n\n \n \n \n\n \n●\nthe\nimpact of changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are\nenacted or interpretations are issued and may significantly affect the effective tax rate of that period;\n\n \n \n \n\n \n●\nthe\napplication of new or changing financial accounting standards or practices; and\n\n \n \n \n\n \n●\nchanges\nin regional or global business or macroeconomic conditions, which may impact the other factors described above.\n\n \n\n5\n\n \n\n \n\nIn\nparticular, it is difficult to predict if, when, or how quickly newly-launched apps may begin to generate revenue or decline in popularity.\nFurther, we cannot be certain if a new app will become popular amongst users and generate revenue. The success of our business depends\nin part on our ability to develop and enhance our technologies and consistently and timely launch new apps. It is difficult for us to\npredict with certainty when we will launch a new app as we may require longer development schedules or soft launch periods to meet our\nquality standards and expectations. If we are unable to successfully launch or acquire new apps or maintain or improve existing apps,\nour business and results of operations could be adversely affected.\n\n \n\n**The\nfailure to attract new users, the loss of users, or a reduction in playing by these users could adversely affect our business, financial\ncondition and results of operations.**\n\n** **\n\nA\nsignificant portion of our revenue is advertising revenue. We collect revenue from advertisers spending on our apps. Revenue generated\nfrom our apps comes from advertisers that purchase ad inventory from our diverse portfolio of mobile games. As is common in the mobile\napp industry our advertisers do not have long-term advertising commitments with us. Our success depends in part on our ability to satisfy\nour advertising clients.\n\n \n\nOur\nrevenue could also be impacted by a number of other factors, including:\n\n \n\n \n●\nour\nability to attract and retain users;\n\n \n \n \n\n \n●\nour\nability to maintain or increase advertiser demand and third-party publisher supply, the quantity, or quality of advertisements shown\nto users, or our pricing of advertisements;\n\n \n \n \n\n \n●\nour\nability to continue to increase user engagement with our apps;\n\n \n \n \n\n \n●\nmobile\napp changes or inventory management decisions we may make that change the size, format, frequency, or relative prominence of advertisements\ndisplayed on our apps;\n\n \n \n \n\n \n●\nour\nability to recruit, train, and retain personnel to support our continued growth;\n\n \n \n \n\n \n●\nour\nability to establish and maintain our brand and reputation;\n\n \n \n \n\n \n●\ngovernment\nactions or legislative, regulatory, or other legal developments relating to advertising, including developments that may impact our\nability to deliver, target, or measure the effectiveness of advertising;\n\n \n \n \n\n \n●\nchanges\nthat limit our ability to deliver, target, or measure the effectiveness of advertising, including changes to policies by mobile operating\nsystem and third-party platform providers, and the degree to which users opt out of certain types of ad targeting as a result of\nchanges and controls implemented in connection with such policy changes and with the E.U. General Data Protection Regulation (the\n“GDPR”), ePrivacy Directive, the California Consumer Privacy Act (the “CCPA”), and the Children’s Online\nPrivacy Protection Act (“COPPA”);\n\n \n \n \n\n \n●\ndecisions\nby clients to reduce their advertising due to concerns about legal liability or uncertainty regarding their own legal and compliance\nobligations, or due to negative publicity, regardless of its accuracy, involving us, our user data practices, advertising metrics\nor tools, our apps, or other companies in our industry; and\n\n \n \n \n\n \n●\nthe\nimpact of macroeconomic conditions, whether in the advertising industry in general, or among specific types of clients within particular\ngeographies.\n\n \n\n6\n\n \n\n \n\nThe\noccurrence of any of these or other factors in the future could result in a reduction in demand for our services and use of our apps,\nwhich may reduce the prices we receive for our advertisements or cause clients to stop advertising with us altogether, either of which\nwould adversely affect our business, financial condition and results of operations. The failure to attract new advertising clients, loss of clients, or reduction\nin spending by our clients could adversely affect our business, financial condition, and results of operations.\n\n \n\n**Security\nbreaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other cyber\nincidents could harm our reputation and adversely affect our business.**\n\n \n\nLike\ncompanies in the mobile app industry in general, we are prone to cyberattacks by third parties seeking unauthorized access to our data\nor the data of our clients or users or to disrupt our ability to provide app marketing services. Our technologies and apps involve the\ncollection, storage, processing, and transmission of a large amount of data, including personal information, and we and our third-party\nservice providers otherwise store and process information, including our confidential and proprietary business information, and personal\ninformation and other information relating to our employees and clients or other third parties. Any failure to prevent or mitigate security\nbreaches or incidents impacting our systems or other systems used in our business, or improper access to or disclosure of our data, including\nsource code, or user data, including personal information, content, or payment information from users, or information from clients or\nother third parties, that we store or otherwise process, could result in the unauthorized loss, modification, disclosure, destruction,\nor other misuse of such data, or unavailability of data. Any such event, or the perception that it has occurred, could adversely affect\nour business and reputation, damage our operations, result in claims, litigation or regulatory investigations or enforcement actions,\nfines, penalties, or other liability or obligations, and diminish our competitive position. In particular, a breach or incident, whether\nelectronic, or otherwise, impacting systems on which source code or other sensitive data are stored could lead to loss, disruption, unavailability,\nor piracy of, or damage to, our offerings, lost or reduced ability to protect our intellectual property, and diminished competitive position.\n\n \n\nComputer\nmalware (including ransomware), viruses, social engineering (predominantly spear phishing attacks or credential stuffing), and general\nhacking have become more prevalent in the mobile app industry. Any actual or attempted breaches, incidents, or attacks may cause disruptions\nor interruptions to our technologies, apps, or other offerings, degrade the user experience, impair, disrupt, or interrupt our internal\nsystems and other systems and networks used in our business, or adversely affect our reputation, business, financial condition, and results\nof operations. Our efforts to protect our data, user data, and information from clients, partners, and other third parties, and to disable\nor otherwise respond to undesirable activities on our technologies or apps, may also be unsuccessful due to: software bugs or other technical\ndefects, errors, or malfunctions; employee, contractor, vendor, or partner error or malfeasance, including defects or vulnerabilities\nin information technology systems or offerings; cyberattacks, attacks designed to disrupt systems or facilities, or breaches of physical\nsecurity of our facilities or technical infrastructure; or other threats that evolve. Additionally, any such breach, incident, attack,\nmalfunction, defect, or vulnerability, or the perception that any of these has occurred, may cause clients or users to lose confidence\nand trust in our apps and otherwise harm our reputation and market position.\n\n \n\nIn\naddition, some developers or other business partners may receive or store information provided by us or by our users through mobile or\nweb apps or other means. These third parties may misappropriate our information and engage in unauthorized use of it. If these third\nparties fail to adopt or adhere to adequate data security practices, or experience a breach of, or other security incident impacting,\ntheir networks or systems, our data or our users’ data may be lost, destroyed, or improperly accessed, modified, disclosed, or\notherwise misused. In such an event, or if such an event is perceived to have occurred, we may suffer damage to our reputation, may have\nincreased costs arising from the restoration or implementation of additional security measures, and we may face claims, demands, investigations\nand other proceedings by private parties or governmental actors, and fines, penalties, and other liability or obligations, any of which\ncould adversely affect our business, financial condition, and results of operations. Any theft or unauthorized use or publication of\nour confidential business information as a result of such an event could also adversely affect our business, competitive position, and\nresults of operations.\n\n \n\n7\n\n \n\n \n\nCyberattacks\ncontinue to evolve in sophistication and volume, and inherently may be difficult to detect for long periods of time. Although we have\ndeveloped systems and processes that are designed to protect our data, user data, and information from our partners, to prevent data\nloss, disable undesirable accounts and activities on our technologies or apps, and to prevent and detect security breaches, we cannot\nassure you that such measures will provide comprehensive security, that we will be able to identify breaches or other incidents or to\nreact to them in a timely manner or that our remediation efforts will be successful. We experience cyberattacks and other security incidents\nof varying degrees from time to time, and we may incur significant costs in investigating, protecting against, litigating, or remediating\nsuch incidents.\n\n \n\nAdditionally,\nour offerings operate in conjunction with, and we are in some cases dependent upon, third-party products, services, and components. Our\nability to monitor our third-party service providers’ data security is limited, and in any event, attackers may be able to circumvent\nour third-party service providers’ data security measures. There have been and may continue to be significant attacks on certain\nthird-party providers, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached\nor that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or\nthe systems and networks of third parties that support us. If there is a security vulnerability, error, or other bug in one of these\nthird-party products, services, and components and if there is a security exploit targeting them, we could face increased costs, claims,\nliability, and additional or new obligations, reduced revenue, and harm to our reputation or competitive position. We and our service\nproviders may be unable to anticipate these techniques, react, remediate or otherwise address any security vulnerability, breach or other\nsecurity incident in a timely manner, or implement adequate preventative measures.\n\n \n\nIn\naddition to our efforts to mitigate cybersecurity risks, we are making significant investments in privacy, safety, security, and content\nreview efforts. As a result of these efforts, we anticipate that we will discover incidents of misuse of user data or other undesirable\nactivity by third parties. We may not discover all such incidents or activity, whether as a result of our data limitations, the reallocation\nof resources to other projects, or other factors, and we may be notified of such incidents or activity by users, the media, or other\nthird parties. Such incidents and activities have in the past, and may in the future, include the use or other processing of user data\nor our systems in a manner inconsistent with our terms, contracts or policies, the existence of false or undesirable user accounts, improper\nadvertising practices, activities that threaten people’s safety on- or offline or instances of spamming, scraping, data harvesting,\nor unsecured datasets. We may also be unsuccessful in our efforts to enforce our policies or otherwise remediate or respond to any such\nincidents effectively or in a timely manner. Any of the foregoing developments, or any reports of them occurring or the perception that\nany of them has occurred, could adversely affect user trust and engagement, harm our brand and reputation, require us to change our business\npractices, result in claims, demands, investigations and other proceedings by private parties or governmental actors, and fines, penalties,\nand other liability or obligations, and adversely affect our business, financial condition, and results of operations.\n\n \n\nWe\nare subject to a variety of laws and regulations in the United States and abroad relating to cybersecurity and data protection, a number\nof which also provide a private right of action. Affected users or government authorities could initiate legal or regulatory actions\nagainst us in connection with any actual or perceived security breaches or improper access to or disclosure of data, which has occurred\nin the past and which could cause us to incur significant expense and liability, distract management and technical personnel, and result\nin orders or consent decrees forcing us to modify our business practices. Such actual or perceived incidents or our efforts to remediate\nsuch incidents may also result in a decline in our active user base or engagement levels. Any of these events could adversely affect\nour reputation, business, financial condition, or results of operations.\n\n \n\nOur\ninsurance coverage may not extend to all types of privacy and data security breaches or other incidents, and it may be insufficient to\ncover all costs and expenses associated with such incidents. Further, such insurance may not continue to be available to us in the future\non economically reasonable terms, or at all, and insurers may deny us coverage as to any future claim. The successful assertion of one\nor more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including\npremium increases or the imposition of large deductible or coinsurance requirements, could have a material adverse effect on our business,\nincluding our reputation, financial condition, or results of operations.\n\n \n\n8\n\n \n\n \n\n**The\nmobile app industry is intensely competitive. If clients or users prefer our competitors’ products or services over our own, our\nbusiness, financial condition, and results of operations could be adversely affected.**\n\n \n\nWe\nface significant competition. We offer services for developers to get their mobile apps discovered and downloaded by the users. We collect\nrevenue from advertising fees paid by mobile app advertisers from the sale of advertising in our apps and sale of advertising in co-developed\nor third-party apps. We also face competition from providers of developer tools that enable developers to reach their audiences or manage\nor optimize their advertising campaigns. These companies vary in size and include Facebook, Google, and Unity Software as well as various\nprivate companies. Several of these companies are also our clients. Clients who are also competitors may decide to invest in their own\nofferings rather than continue to use our technology or advertise on our apps.\n\n \n\nAdditionally,\nwe also compete with businesses that develop online and mobile games and other mobile apps, which vary in size and include companies\nsuch as Activision Blizzard (which was acquired by Microsoft), Tencent, and Zynga (which was acquired by Take-Two Interactive),\nas well as other public and private companies. Many of these companies are also our partners and clients. As we expand our global operations\nand mobile app offerings, we increasingly face competition from high-profile companies with significant online presences that may introduce\nnew or expanded offerings, such as Apple, Facebook, Google, Microsoft, and Snap. In addition, other large companies that to date have\nnot actively focused on mobile apps or gaming may decide to develop mobile apps or gaming offerings, such as Amazon’s recently\nintroduced games platform, or work with other developers. Some of these current and potential competitors have significantly greater\nresources than we do that they can use to develop, acquire, or brand additional mobile apps or gaming alternatives, and may have more\ndiversified revenue sources than we do and therefore may be less severely affected by changes in consumer preferences, regulations, or\nother developments that may impact our business or industry.\n\n \n\nFurther,\nas there are relatively low barriers to entry to develop and publish a mobile app, we expect new competitors to enter the market and\nexisting competitors to allocate more resources towards developing and marketing competing games and apps. As our mobile games are free\nto play, our apps compete primarily on the basis of user experience rather than price. The proliferation of apps makes it difficult for\nus to differentiate ourselves from our competitors and compete for users.\n\n \n\nWe\nalso face competition for advertising spending and for the discretionary spending, leisure time, and attention of our users from game\nplatforms such as personal computer and console games, and other leisure time activities, such as television, movies, music, sports,\nand the internet. In addition, non-game applications for mobile devices, such as social media and messaging, television, movies, music,\ndating, and sports, have become increasingly popular, making the overall mobile app industry highly fragmented and making it more difficult\nfor any mobile app to differentiate itself. Our future growth depends in part on the overall health of the mobile app ecosystem and in\nparticular, mobile gaming. Increasing competition could result in decreases in the number of users of our apps, increased user acquisition\ncosts, lower engagement with our apps, and loss of key personnel, all of which could adversely affect our business, financial condition,\nor results of operations.\n\n \n\nSome\nof our current and potential competitors may be domiciled in different countries and subject to political, legal, and regulatory regimes\nthat enable them to compete more effectively than us, particularly those located outside of the United States. Some of our current and\npotential competitors may have greater resources, more diversified revenue streams, better technological or data analytics capabilities,\nor stronger brands or competitive positions in certain product segments, geographic regions, or user demographics than we do. If clients\nor users prefer our competitors’ products or services over our own, or if our competitors are better able to adapt to changes in\nthe preferences of publishers or users, regulations, or other developments, our business, financial condition, and results of operations\ncould be adversely affected.\n\n \n\n9\n\n \n\n \n\n**The\nmobile app industry is subject to rapid technological change, and if we do not adapt to, and appropriately allocate our resources among,\nemerging technologies and business models, our business, financial condition, and results of operations could be adversely affected.**\n\n \n\nTechnology\nchanges rapidly in the mobile app industry. Our future success depends in part on our ability to adapt to trends and to innovate. To\nattract new clients and users and increase revenue from our current clients and users, we will need to enhance and improve our technologies\nand apps. We may not introduce enhancements of our existing technology and offerings, and new offerings, in a timely or cost-effective\nmanner and any such enhancements may contain errors or defects.\n\n \n\nOur\nbusiness also currently depends in part on the growth and evolution of the internet, especially mobile internet-enabled devices. The\nnumber of people using mobile internet-enabled devices has increased rapidly over time, and we expect that this trend will continue.\nThe mobile app industry, however, may not grow in the way that we anticipate. We must continually anticipate and adapt to emerging technologies\nto stay competitive. As the technological infrastructure for internet access continues to improve and evolve, consumers will be presented\nwith more opportunities to access apps and play games on a variety of devices and platforms and to experience other leisure activities\nthat may compete with mobile apps. Forecasting the financial impact of these emerging technologies and business models is inherently\nuncertain and volatile. If we decide to support a new technology or business model in the future, it may require entering into business\narrangements with new platforms or other third parties, which may be on terms that are less favorable to us than those for traditional\ntechnologies or business models.\n\n \n\nTo\ninvest in a new technology or expand our offerings, we must invest financial resources and management attention. We may invest significant\nresources in a new offering or in a strategic acquisition or partnership, which could prove unsuccessful or prevent us from directing\nthese resources towards other opportunities. We may never recover the often-substantial up-front costs of developing and marketing emerging\ntechnologies or business models, or recover the opportunity cost of diverting management and financial resources. Further, our competitors\nmay adopt an emerging technology or business model more quickly or effectively than we do, creating products that are technologically\nsuperior to ours or attract more users than ours.\n\n \n\nIf,\non the other hand, we do not continue to enhance our technologies or apps, or do not appropriately allocate our resources amongst opportunities,\nor we otherwise elect not to pursue new business models that achieve significant commercial success, we may face adverse consequences.\nFor example, we do not currently offer our apps on all devices or all gaming platforms. If the devices on which our apps are available\ndecline in popularity or become obsolete faster than anticipated, or if new platforms emerge other than those on which our games are\noffered, we could experience a decline in revenue and in our number of app users, and we may not achieve the anticipated return on our\ndevelopment efforts. It may take significant time and expenditures to shift product development resources to new technologies, and it\nmay be more difficult to compete against existing products incorporating such technologies. If new technologies render mobile devices\nobsolete or we are unable to successfully adapt to and appropriately allocate our resources amongst current and new technologies, our\nbusiness, financial condition, and results of operations could be adversely affected.\n\n \n\n**Our\ntechnologies, apps, and internal systems rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities\nin these systems, or failures to address or mitigate technical limitations in our systems, could adversely affect our business, financial\ncondition, and results of operations.**\n\n \n\nOur\ntechnologies, apps and internal systems rely on software and hardware that is highly technical and complex. In addition, our technologies,\napps and internal systems depend in part on the ability of such software and hardware to store, retrieve, process, and manage large amounts\nof data. The software and hardware on which we rely has contained, and will in the future contain errors, bugs, or vulnerabilities and\nour systems are subject to certain technical limitations that may compromise our ability to meet our objectives. Some errors, bugs, or\nvulnerabilities inherently may be difficult to detect. Errors, bugs, vulnerabilities, design defects, or technical limitations within\nthe software and hardware on which we rely have in the past led to, and may in the future lead to, outcomes including a negative experience\nfor clients and users who use our offerings, compromised ability of our offerings to perform in a manner consistent with our terms, contracts,\nor policies, delayed app launches or enhancements, targeting, measurement, or billing errors, compromised ability to protect the data\nof our users and/or our intellectual property, or reductions in our ability to provide some or all of our services. To the extent that\nany such errors, bugs, vulnerabilities, or defects impact our apps or services, our clients may become dissatisfied with our offerings,\nour brand and reputation may be harmed, and we may make operational decisions, such as with respect to our apps, that are based on inaccurate\ndata. Any errors, bugs, vulnerabilities, or defects in our systems or the software and hardware on which we rely, failures to properly\naddress or mitigate the technical limitations in our systems, or associated degradations or interruptions of service may lead to outcomes\nincluding damage to our reputation, increased product engineering expenses, regulatory inquiries, litigation, or liability for fines,\ndamages, or other remedies, any of which could adversely affect our business, financial condition, and results of operations.\n\n \n\n10\n\n \n\n \n\n**Our\nbusiness depends in part on our ability to maintain and scale our apps, and any significant disruption to our technologies or apps could\ndamage our reputation, result in a potential loss of engagement, and adversely affect our business, financial condition, and results\nof operations.**\n\n \n\nOur\nreputation and ability to attract and retain our clients and users depends in part on the reliable performance of our technologies\nand apps. We have in the past experienced, and may in the future experience, interruptions in the availability or performance of our\nofferings from time to time. Our systems may not be adequately designed or may not operate with the reliability and redundancy\nnecessary to avoid performance delays or outages that could be harmful to our business. If our apps are unavailable when users\nattempt to access them, or if they do not load as quickly as expected, users may not use our offerings as often in the future, or at\nall, which could adversely affect our business and results of operations. As we continue to grow, we will need an increasing amount\nof technical infrastructure, including network capacity and computing power, to continue to satisfy our needs and the needs of our\nclients and users. We may fail to continue to effectively scale and grow our technical infrastructure to accommodate these increased\ndemands, which may adversely affect our user engagement and revenue growth. Additionally, we presently rely in part on third-party\ndata centers and cloud hosting infrastructure. Our business may be subject to interruptions, delays, or failures resulting from\nnatural disasters and other events outside of our control that impact us or these third-party providers. If such an event were to\noccur, users may be subject to service disruptions or outages and we may not be able to recover our technical infrastructure and\nuser data in a timely manner to restart or provide our services. If we fail to efficiently scale and manage our infrastructure, or\nif events disrupt our infrastructure or those of our third-party providers, our business, financial condition, and results of\noperations could be adversely affected.\n\n \n\n**If\nwe are unable to launch new apps and successfully monetize them, or continue to improve the experience and monetization of our existing\napps, our business, financial condition, and results of operations could be adversely affected.**\n\n \n\nOur\nbusiness depends in part on launching or acquiring, and continuing to service, mobile apps. We have devoted and we expect to continue\nto devote substantial resources to the research, development, and marketing of our apps. Our development and marketing efforts are focused\non improving the experience of our existing apps, developing new apps, and successfully monetizing our apps. Our apps generate revenue\nprimarily through the sale of advertising. For apps distributed through third-party platforms, we are required to share a portion of\nthe proceeds from in-game sales with the platform providers, which share may be subject to changes or increases over time. In order to\nmaintain and increase our profitability, we need to generate sufficient revenue from our existing and new apps to offset our ongoing\ndevelopment, marketing, and other operating expenses.\n\n \n\nThe\nsuccess of our apps depends in part on unpredictable and volatile factors beyond our control including user preferences, competing apps,\nnew third-party platforms, and the availability of other entertainment experiences. If our apps do not meet user expectations or if they\nare not brought to market in a timely and effective manner, our business and results of operations could be adversely affected.\n\n \n\nIn\naddition, our ability to successfully launch apps and their ability to achieve commercial success will depend in part on our ability\nto:\n\n \n\n \n●\neffectively\nmarket our apps to existing and new users;\n\n \n \n \n\n \n●\nachieve\na positive return on investment from our marketing and user acquisition costs or achieve organic, non-paid user growth;\n\n \n\n11\n\n \n\n \n\n \n●\nadapt\nto changing trends, user preferences, new technologies, and new feature sets for mobile and other devices, including determining\nwhether to invest in development for any new technologies, and achieve a positive return on the costs associated with such adaptation;\n\n \n \n \n\n \n●\ncontinue\nto adapt mobile app feature sets for an increasingly diverse set of mobile devices, including various operating systems and specifications,\nlimited bandwidth, and varying processing power and screen sizes;\n\n \n \n \n\n \n●\nachieve\nand maintain successful user engagement and effectively monetize our apps;\n\n \n \n \n\n \n●\ndevelop\nmobile games that can build upon or become franchise games and expand and enhance our mobile games after their initial releases;\n\n \n \n \n\n \n●\ncontinue\nto attract publishers to advertise on our apps;\n\n \n \n \n\n \n●\nwork\nwith third-party platforms and obtain opportunities to feature our apps to their audience;\n\n \n \n \n\n \n●\ncompete\nsuccessfully against a large and growing number of competitors;\n\n \n \n \n\n \n●\naccurately\nforecast the timing and expense of our operations, including mobile app and feature development, marketing, and user acquisition;\n\n \n \n \n\n \n●\nminimize\nand quickly resolve bugs or outages; and\n\n \n \n \n\n \n●\nretain\nand motivate talented and experienced developers and other key personnel\n\n \n\nThese\nand other uncertainties make it difficult to know whether we will succeed in continuing to develop and launch new apps. Further, casual\ngames, which is the part of the mobile app market we focus on, has a relatively short lifespan, which means we need to be constantly\ninnovating and updating our gaming apps and/or introducing new ones.\n\n \n\n**If\nwe fail to retain existing users or add new users cost-effectively, or if our users decrease their level of engagement with our apps,\nour business, financial condition, and results of operations could be adversely affected.**\n\n \n\nThe\nsize of our user base and the level of user engagement with our apps are critical to our success. Our results of operations have been\nand will continue to be significantly determined by our success in acquiring and engaging app users, which drives the amount of advertising\nwe can place and the rates that advertising clients will pay for such ad placements. We expect that the number of our app users may fluctuate\nor decline in one or more markets from time to time, particularly in markets where we have achieved higher penetration rates. In addition,\nif people do not perceive our apps as useful or entertaining, we may not be able to attract or retain users or otherwise maintain or\nincrease the frequency and duration of their engagement, which could harm our revenue. A number of mobile apps that achieved early popularity\nhave since seen their user bases or user engagement levels decline. There is no guarantee that we will not experience a similar erosion\nof our app users or user engagement levels. Any number of factors can adversely affect user growth and engagement, including if:\n\n \n\n \n●\nusers\nincreasingly engage with mobile apps offered by competitors or mobile apps in categories other than those of our apps;\n\n \n \n \n\n \n●\nwe\nfail to introduce new apps or features that users find engaging or that achieve a high level of market acceptance or we introduce\nnew apps, or make changes to existing apps, that are not favorably received;\n\n \n \n \n\n \n●\nusers\nfeel that their experience is diminished as a result of the decisions we make with respect to the frequency, prominence, format,\nsize, and quality of advertisements that we display;\n\n \n \n \n\n \n●\nusers\nhave difficulty installing, updating, or otherwise accessing our apps as a result of actions by us or third parties;\n\n \n \n \n\n \n●\nwe\nare unable to continue to develop apps that work with a variety of mobile operating systems and networks; and\n\n \n \n \n\n \n●\nconcerns\nemerge among our user and potential user base about the quality of our apps, our data practices or concerns related to privacy and\nsharing of personal information and other user data, safety, security, or other factors.\n\n \n\n12\n\n \n\n \n\nAdditionally,\nwe expect that it will become increasingly difficult and more expensive for us to acquire users for our apps for a variety of reasons,\nincluding the increasingly competitive nature of the mobile app industry and the significant amount of time and attention users are dedicating\nto competing entertainment options. If our competitors increase their user acquisition spending, we could experience higher costs per\nan install for our apps, which would adversely affect our margins and profit. Furthermore, our spending on user acquisition is based\non certain assumptions about their projected behavior, particularly for new apps for which we do not have similar apps in our portfolio\nto aid us in our modeling efforts. If we are unable to grow our user base and increase our user engagement levels, or unable to do so\ncost effectively, our business, financial condition, and results of operations could be adversely affected.\n\n \n\n**We\nare highly dependent on Moremo, a PRC company (“Moremo”) and the former parent company of Newbyera Technology Limited,\nour Hong Kong operating subsidiary (“Newbyera”), to provide us with labor and back-office operations, and any disruption\nto the provision of such outsourced services could materially and adversely affect our business, financial condition, and results of\noperations.**\n\n \n\nPursuant\nto a Labor Service Contract on Dispatch and Employment between Newbyera and Moremo, from whom we acquired Newbyera in June 2024, we rely on contractors provided through Moremo to\nconduct much of our operations. We also rely on Moremo for administrative services pursuant to an Outsourcing Service Contract between\nNewbyera and Moremo. Our dependence on Moremo presents a number of risks that could materially and adversely affect our business, financial\ncondition, and results of operations.\n\n \n\nWhile\nour agreements with Moremo provide Moremo only limited termination rights, primarily for non-payment, this does not guarantee that we\nwill continue to receive services from Moremo, nor from the contractors that we have retained both on an ongoing and ad-hoc basis through\nour arrangement with Moremo. We primarily rely on highly skilled, technically trained and creative contractors retained through Moremo\nto run our business and develop new technologies and create innovative games. Such employees, particularly game designers, engineers\nand project managers with desirable skill sets, are in high demand and would be difficult to replace if we lost a significant number\nof them due to the termination of our agreement with Moremo or otherwise (such as if Moremo was no longer able to retain a sufficient\nnumber of contractors on our behalf). The loss of such contract personnel could cause us to experience material interruptions in product\ndevelopment, delays in bringing new games to market, difficulties in our relationships with customers, and the inability to successfully\nserve ads and to increase or maintain our revenue as a result, and could otherwise adversely affect our business and prospects.\n\n \n\nIn\naddition, while we might be able to retain other service providers to replace Moremo should our agreements with them be terminated or\nthey otherwise cease providing services to us under these agreements, there is no guarantee that we could do so, or that we could do\nso on terms equally favorable to us as those in our agreements with Moremo. Further, our business operations would be disrupted, potentially\nmaterially, while we were in the process of retaining new service providers, which could have a material adverse impact on our business,\nreputation, prospects, results of operation and financial condition.\n\n \n\nWhile\nNewbyera has a contractual right to supervise the personnel contracted through Moremo, we have less control over and oversight of the\nwork performed by contractors than we would if the work were performed by our own employees. There could be instances where these independent\ncontractors fail to comply with applicable law or with our policies and procedures. For example, new mobile games may not be developed\non time, or there could be a delay in us learning of problems or errors and thus a delay in our response to those issues. If any such\ndelays, problems or errors were to occur, or any of these independent contractors violated applicable law with respect to the work they\ndo for us, it could materially and adversely affect our business, reputation and prospects as well as our revenue, financial condition\nand cash flow. In addition, it is possible that we could be held civilly or criminally accountable based on vicarious liability because\nof the actions of our independent contractors or if Moremo does not comply with applicable law, particularly applicable employment laws,\nin connection with its provision of services to us even though Moremo has indemnified us for losses we incur on account of its actions\nor inactions.\n\n \n\nFinally,\nlaws and regulations relating to the use of contractors may vary in the jurisdictions in which we operate. These contractors could be\ndeemed employees of Newbyera despite our outsourcing arrangements, or changes in legal and regulatory restrictions could impact our ability\nto use contractors in the future.\n\n \n\n13\n\n \n\n \n\n**We\nhave entered into strategic partnerships with mobile gaming developers, and a failure to maintain such relationships may harm our ability\nto launch new apps as well as our brand and reputation.**\n\n \n\nFrom\ntime to time, we have entered into strategic partnerships with mobile gaming studios. We have historically allowed these studios to continue\ntheir operations with a degree of autonomy. In certain of these transactions, we have bought games from such studios and entered into\ndevelopment agreements whereby such studios provide us support in developing and improving games and grant us a right of first refusal\nwith respect to future games. These agreements typically have a fixed term, after which the studios may choose not to continue working\nwith us. Any deterioration in our relationship with these studios may harm our ability to monetize the games we co-develop and launch\nand future mobile games that we co-develop with these studios and may lead to such studios choosing not to renew their agreements with\nus. Further, if such a studio becomes dissatisfied with us, our brand and reputation may be harmed and we may have more difficulty entering\ninto similar agreements in the future. Additionally, international studios with whom we enter into such partnerships may be located in\nareas with less certain legal and regulatory regimes or more potential risks, which may increase our costs to maintain such strategic\npartnership. If we are unable to maintain any of these partnerships, we may be required to invest significant resources in expanding\nour development program or entering into agreements with additional mobile gaming studios in order to continue producing the same volume\nand quality of apps, and our business, financial condition, and results of operations could be adversely affected.\n\n \n\n**We\nrely on third-party platforms to distribute our apps and collect revenue, and if our ability to do so is harmed, or such third-party\nplatforms change their policies in such a way that restricts our business, increases our expenses, or limits the information we derive\nfrom our apps, our business, financial condition, and results of operations could be adversely affected.**\n\n \n\nThe\nmobile app industry depends in part on a relatively small number of third-party distribution platforms, such as the Apple App Store,\nthe Google Play Store, and Meta, some of which are direct competitors. We derive significant revenue from the distribution of our apps\nthrough these third- party platforms. We are subject to the standard policies and terms of service of such third-party platforms, which\ngenerally govern the promotion, distribution, content, and operation of applications on such platforms. Each platform provider has broad\ndiscretion to change and interpret its terms of service and other policies with respect to us and other mobile app companies, and those\nchanges may be unfavorable to us. A platform provider may also change its fee structure, add fees associated with access to and use of\nits platform, alter how mobile apps are labeled or are able to advertise on its platform, change how the personal information of its\nusers is made available to developers on its platform, limit the use of personal information for advertising purposes, restrict how users\ncan share information on its platform or across platforms, or significantly increase the level of compliance or requirements necessary\nto use its platform. We rely in part on IDFA to provide us with data that helps us better market and monetize apps.\n\n \n\nIf\nwe violate, or a distribution platform provider believes that we have violated, a distribution platform’s terms of service, or\nif there is any change or deterioration in our relationship with such a distribution provider, that platform provider could limit or\ndiscontinue our access to its platform. If one of our distribution platform partners were to limit or discontinue the distribution of\nour apps on their platform, it could adversely affect our business, financial condition, and results of operations.\n\n \n\nWe\nalso rely on the continued popularity, user adoption, and functionality of third-party platforms. In the past, some of these platform\nproviders have been unavailable for short periods of time. In addition, third-party platforms also impose certain file size limitations,\nwhich may limit the ability of users to download some of our larger apps in over-the-air updates. Aside from these over-the-air file\nsize limitations, a larger game file size could cause users to delete our mobile games once the file size grows beyond the capacity of\ntheir devices’ storage limitations or could reduce the number of downloads of these mobile games.\n\n \n\nIf\nissues arise with third-party platforms that impact the visibility or availability of our apps, our users’ ability to access our\napps or our ability to monetize our apps, or otherwise impact the design or effectiveness of our business, financial condition, and results\nof operations could be adversely affected.\n\n \n\n14\n\n \n\n \n\n**Our\nrevenue has been concentrated in various ways and the loss of, or a significant reduction in, any such revenue source, or our\nfailure to successfully expand and diversify our revenue sources could adversely affect our business, financial condition, and results\nof operations.**\n\n \n\nWe\nhave historically experienced revenue concentration with respect to certain apps and the in-app advertising portion of our business.\nOur future success depends, in part, on launching and successfully monetizing additional apps and on establishing and maintaining successful\nrelationships with a diverse set of clients. While our apps consist of hundreds of mobile games, currently a limited number of those\nare responsible for a significant portion of our revenue. The loss or failure to continuously monetize one of these apps could have a\nsignificant impact on our results of operations. Similarly, our future success depends, in part, on our ability to successfully develop\nand monetize additional mobile games and other mobile apps. If we are unable to successfully launch new apps, our reliance on a limited\nnumber of apps may increase.\n\n \n\nMore\ngenerally, we face concentration risk in that our apps operate primarily in the mobile app industry and specifically mobile gaming. As\nsuch, our business depends, in part, on the continued health and growth of these industries. Further, a significant amount of our total\nrevenue is derived through a limited number of third-party distribution platforms, such as the Apple App Store, the Google Play Store,\nand Facebook.\n\n \n\n**We\nhave experienced recent rapid growth, which may not be indicative of our future growth. We may be unable to effectively manage the growth\nof our business, which could adversely affect our business, financial condition, and results of operations.**\n\n \n\nOur\ngrowth until now should not be relied upon as an indication of our future performance, as we may not be able to sustain our growth rate\nin the future. Even if our revenue continues to increase, we expect that our revenue growth rate may decline in the future as a result\nof a variety of factors, including because of more difficult comparisons to prior periods and the saturation of the market. The overall\ngrowth of our revenue depends in part on our ability to execute on our business plans.\n\n \n\nAdditionally,\nthe growth and expansion of our business has placed and continues to place a significant strain on our management, operations, financial\ninfrastructure, and corporate culture. Our future success depends in part on our ability to manage this expanded business. If not managed\neffectively, this growth could result in the over-extension of our management systems and information technology systems and our internal\ncontrols and procedures may not be adequate to support this growth. Failure to adequately manage our growth in any of these ways may\ncause damage to our brand and reputation and adversely\n\n \n\n**Our\ninternational operations are subject to increased challenges and risks generally.**\n\n \n\nWe\nexpect to continue to expand our international operations in the future by opening new offices, entering into strategic partnerships\nwith new international game studios, acquiring companies that may have international operations, and providing our apps in additional\ncountries and languages. Expanding our international operations may subject us to risks associated with:\n\n \n\n \n●\nrecruiting\nand retaining talented and capable management and employees in foreign countries;\n\n \n \n \n\n \n●\nthe\ndiversion of senior management attention;\n\n \n \n \n\n \n●\nchallenges\ncaused by distance, language, and cultural differences;\n\n \n\n15\n\n \n\n \n\n \n●\ndeveloping\nand customizing apps that appeal to the tastes and preferences of users in international markets;\n\n \n \n \n\n \n●\nthe\ninability to offer certain services or apps in certain foreign countries;\n\n \n \n \n\n \n●\ncompetition\nfrom local mobile app developers with intellectual property rights and significant market share in those markets and with a better\nunderstanding of user preferences;\n\n \n \n \n\n \n●\nutilizing,\nprotecting, defending, and enforcing our intellectual property rights;\n\n \n \n \n\n \n●\nnegotiating\nagreements with local distribution platforms that are sufficiently economically beneficial to us and protective of our rights;\n\n \n \n \n\n \n●\nthe\ninability to extend proprietary rights in our brand, content, or technology into new jurisdictions;\n\n \n \n \n\n \n●\nimplementing\nalternative payment methods for features and virtual goods in a manner that complies with local laws and practices and protects us\nfrom fraud;\n\n \n \n \n\n \n●\ncompliance\nwith applicable foreign laws and regulations, including anti-bribery laws, privacy laws, and laws relating to content and consumer\nprotection;\n\n \n \n \n\n \n●\ncredit\nrisk and higher levels of payment fraud;\n\n \n \n \n\n \n●\ncurrency\nexchange rate fluctuations;\n\n \n \n \n\n \n●\nprotectionist\nlaws and business practices that favor local businesses in certain countries;\n\n \n \n \n\n \n●\ndouble\ntaxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws in the United States\nor the foreign jurisdictions in which we operate;\n\n \n \n \n\n \n●\npolitical,\neconomic, and social instability, such as the Iran war and Russia-Ukraine conflict and its impacts on the region and the\nregional and global economy;\n\n \n \n \n\n \n●\nhigher\ncosts associated with doing business internationally, including costs related to local advisors;\n\n \n \n \n\n \n●\nexport\nor import regulations; and\n\n \n \n \n\n \n●\ntrade\nand tariff restrictions.\n\n \n\nOur\nability to successfully gain market acceptance in any particular international market is uncertain and, in the past, we have experienced\ndifficulties and have not been successful in all the countries we have entered. If we are unable to continue to expand internationally\nor manage the complexity of our global operations successfully, our business, financial condition, and results of operations could be\nadversely affected.\n\n \n\n**Our\nbusiness is subject to economic, market, and geopolitical conditions as well as to natural disasters beyond our control.**\n\n \n\nOur\ngaming revenue is driven in part by discretionary consumer spending habits and preferences, and by advertising spending patterns.\nHistorically, consumer purchasing and advertising spending have each declined during economic downturns and periods of uncertainty\nregarding future economic prospects or when disposable income or consumer lending is lower. General macroeconomic conditions, such\nas a recession or economic slowdown in the United States or internationally, including those resulting from geopolitical issues such as the Iran war or the Russia-Ukraine conflict,\ncould create uncertainty and adversely affect discretionary consumer spending habits and preferences as well as advertising\nspending. Uncertain economic conditions may also adversely affect our clients. As a result, we may be unable to continue to grow in\nthe event of future economic slowdowns. We are particularly susceptible to market conditions and risks associated with the mobile\napp industry, which also include the popularity, price, and timing of our apps, changes in user demographics, the availability and\npopularity of other forms of entertainment, and critical reviews and public tastes and preferences, which may change rapidly and\ncannot necessarily be predicted.\n\n \n\n16\n\n \n\n \n\n**We\nanticipate incurring higher operating expenses in the future, and we may not be able to achieve or maintain our profitability in any\ngiven period. If we cannot achieve or maintain our profitability, our business could be adversely affected.**\n\n \n\nWe may not always achieve\nsufficient revenue or manage our expenses in order to achieve positive cash flow from operations or profitability in any given period.\nOur operating expenses may continue to rise as we implement additional initiatives designed to increase revenue, potentially including\ndeveloping our technologies; launching apps; strategic acquisitions and partnerships; client and user acquisition spending;\ninternational expansion; hiring employees or entering into additional contractor arrangements; and taking other steps to strengthen and\ngrow our company. We are likely to recognize costs associated with these investments earlier than some of the anticipated benefits, and\nthe return on these investments may be lower, or may develop more slowly, than we expect. We also anticipate that the costs of acquiring\nnew clients and mobile app users, and otherwise marketing our offerings and apps, will continue to rise. Further, we may continue to\nincur significant costs in connection with strategic acquisitions and partnerships, which costs may increase or become more concentrated\nto the extent that we enter into larger transactions. If we are not able to maintain positive cash flow in the long term, we may require\nadditional financing, which may not be available on favorable terms or at all, and that may be dilutive to our stockholders. If we are\nunable to generate adequate revenue growth and manage our expenses, we may incur significant losses in the future and may not be able\nto maintain positive cash flow from operations or profitability.\n\n \n\n**We\ngenerally do not have long-term agreements with our clients.**\n\n \n\nOur\nclients are not required to enter into long-term agreements with us and may choose to stop using our advertising publishing services\nat any time. For example, our advertising agreements can be executed in as little as one day and can be terminated for convenience on\ntwo days’ notice. In order to continue to grow this part of our business, we must consistently provide offerings that clients see\nas valuable and choose to use. If we fail to maintain our relationships with our clients, or if the terms of these relationships become\nless favorable to us, our results of operations would be harmed. Additionally, as certain of our clients are also our competitors, these\nclients may choose to invest in their own offerings rather than continue to use our offerings. Any failure to maintain our relationships\nwith our clients could adversely affect our business, financial condition, and results of operations.\n\n \n\n**If\nour apps do not meet user expectations, or contain objectionable content, our reputation, business, financial condition, and results\nof operations could be adversely affected.**\n\n \n\nExpectations\nregarding the quality, performance, and integrity of our apps are high. We must continually adapt to changing user preferences including\nthe popularity of various game categories and styles of play. Users may be critical of our apps, business models, or business practices\nfor a wide variety of reasons, including perceptions about gameplay, fairness, game content, features, or services. Independent industry\nanalysts may publish reviews of our apps from time to time, as well as those of our competitors, and perception of our apps in the marketplace\nmay be significantly influenced by these reviews. We have no control over what users or these industry analysts report. If users and\nindustry analysts negatively respond to our apps or changes that we make to our apps, or provide negative reviews of our apps, our reputation,\nbusiness, financial condition, and results of operations could be adversely affected.\n\n \n\nFurther,\ndespite reasonable precautions, some users may be offended by certain mobile app content, advertisements displayed in our apps or by\nthe treatment of other users. For example, if users believe that an advertisement displayed in one of our apps contains objectionable\ncontent, we could experience damage to our brand and reputation and users could refuse to continue to engage with such app and pressure\nplatform providers to remove the app from their platforms. While such content may violate our terms and we may subsequently remove it,\nour brand and reputation may nonetheless be harmed and our clients may become dissatisfied with our services. Furthermore, steps that\nwe may take in response to such instances, such as temporarily or permanently shutting off access of a user to our apps, could adversely\naffect our business and results of operations. Any failure to meet user expectations or provide our apps without objectionable content\ncould adversely affect our reputation, business, financial condition, and results of operations.\n\n \n\n17\n\n \n\n \n\n**The\nproliferation of “cheating” programs and scam offers that seek to exploit our mobile games and users may adversely affect\ngame-playing experiences and lead users to stop playing our mobile games. Our failure to maintain adequate customer support may enhance\nthese risks.**\n\n \n\nOur\nusers rely on our customer support organization to resolve any issues relating to our mobile games. Customer support is important for\nsatisfying user expectations regarding the quality, performance, and integrity of our mobile games. We currently have limited customer\nsupport operations. If we do not effectively train, supplement, and manage our customer support organization to assist our users, and\nif that support organization does not succeed in helping users quickly resolve issues or provide effective ongoing support, we could\nexperience decreased user engagement and harm to our reputation with potential new users.\n\n \n\nAdditionally,\nunrelated third parties have developed, and may continue to develop, “cheating” programs that enable users to exploit vulnerabilities\nin our mobile games, play them in an automated way, collude to alter the intended game play, or obtain unfair advantages over other users\nwho do play fairly. These programs harm the experience of users who play fairly and may disrupt the virtual economies of our mobile games.\nIn addition, unrelated third parties have attempted to scam our users with fake offers for virtual goods or other game benefits. These\nunauthorized or fraudulent transactions are usually arranged on third-party websites and the virtual goods offered may have been obtained\nthrough unauthorized means, such as exploiting vulnerabilities in our mobile games, or may be fraudulent offers. We do not generate any\nrevenue from these transactions. These unauthorized purchases and sales from third-party sellers could impede our revenue and profit\ngrowth.\n\n \n\nThere\ncan be no assurance that our customer support and other efforts to detect, prevent, or minimize these unauthorized or fraudulent transactions\nwill be successful, that these actions will not increase over time or that our customer support efforts will be successful in resolving\nuser issues. Any failure to maintain adequate customer support or success of third-party cheating programs or scams may negatively affect\ngame-playing experiences and lead users to stop playing our mobile games, which could adversely affect our business, financial condition,\nand results of operations.\n\n \n\nWe\nare highly dependent on Newbyera’s former parent company, Moremo, from whom we acquired Newbyera in June 2024, to provide us with labor and back-office operations, and any disruption\nto the provision of such outsourced services could materially and adversely affect our business, financial condition, and results of\noperations.\n\n \n\nPursuant\nto a Labor Service Contract on Dispatch and Employment between Moremo and Newbyera, we rely on contractors provided through Moremo to\nconduct much of our operations. We also rely on Moremo for administrative services pursuant to an Outsourcing Service Contract between\nNewbyera and Moremo. Our dependence on Moremo presents a number of risks that could materially and adversely affect our business, financial\ncondition, and results of operations.\n\n \n\nWhile\nour agreements with Moremo provide Moremo only limited termination rights, primarily for non-payment, this does not guarantee that we\nwill continue to receive services from Moremo, nor from the contractors that we have retained both on an ongoing and ad-hoc basis through\nour arrangement with Moremo. We primarily rely on highly skilled, technically trained and creative contractors retained through Moremo\nto run our business and develop new technologies and create innovative games. Such employees, particularly game designers, engineers\nand project managers with desirable skill sets, are in high demand and would be difficult to replace if we lost a significant number\nof them due to the termination of our agreement with Moremo or otherwise (such as if Moremo was no longer able to retain a sufficient\nnumber of contractors on our behalf). The loss of such contract personnel could cause us to experience material interruptions in product\ndevelopment, delays in bringing new games to market, difficulties in our relationships with customers, and the inability to successfully\nserve ads and to increase or maintain our revenue as a result, and could otherwise adversely affect our business and prospects.\n\n \n\n18\n\n \n\n \n\nIn\naddition, while we might be able to retain other service providers to replace Moremo should our agreements with them be terminated or\nthey otherwise cease providing services to us under these agreements, there is no guarantee that we could do so, or that we could do\nso on terms equally favorable to us as those in our agreements with Moremo. Further, our business operations would be disrupted, potentially\nmaterially, while we were in the process of retaining new service providers, which could have a material adverse impact on our business,\nreputation, prospects, results of operation and financial condition.\n\n \n\nWhile\nNewbyera has a contractual right to supervise the personnel contracted through Moremo, we have less control over and oversight of the\nwork performed by contractors than we would if the work were performed by our own employees. There could be instances where these independent\ncontractors fail to comply with applicable law or with our policies and procedures. For example, new mobile games may not be developed\non time, or there could be a delay in us learning of problems or errors and thus a delay in our response to those issues. If any such\ndelays, problems or errors were to occur, or any of these independent contractors violated applicable law with respect to the work they\ndo for us, it could materially and adversely affect our business, reputation and prospects as well as our revenue, financial condition\nand cash flow. In addition, it is possible that we could be held civilly or criminally accountable based on vicarious liability because\nof the actions of our independent contractors or if Moremo does not comply with applicable law, particularly applicable employment laws,\nin connection with its provision of services to us even though Moremo has indemnified us for losses we incur on account of its actions\nor inactions.\n\n \n\nFinally,\nlaws and regulations relating to the use of contractors may vary in the jurisdictions in which we operate. These contractors could be\ndeemed employees of Newbyera despite our outsourcing arrangements, or changes in legal and regulatory restrictions could impact our ability\nto use contractors in the future.\n\n \n\n**Legal\nand Regulatory Risks Related to our Core Gaming Business**\n\n \n\n**We\nare subject to laws and regulations concerning privacy, information security, data protection, consumer protection, advertising, tracking,\ntargeting, and protection of minors, and these laws and regulations are continually evolving. Our actual or perceived failure to comply\nwith these laws and regulations could adversely affect our business, financial condition, and results of operations.**\n\n \n\nWe\nreceive, store, and process personal information and other data and we enable our users to share their personal information with each\nother and with third parties, including within our apps. There are numerous federal, state, and local laws around the world regarding\nprivacy and the collection, storing, sharing, use, processing, disclosure, deletion, and protection of personal information and other\ndata, the scope of which are changing, subject to differing interpretations, and may be inconsistent between countries or conflict with\nother rules.\n\n \n\nVarious\ngovernment and consumer agencies have called for new regulation and changes in industry practices and are continuing to review the need\nfor greater regulation for the collection of information concerning consumer behavior on the internet, including regulation aimed at\nrestricting certain targeted advertising practices. For example, the GDPR, which became effective in May 2018, created new individual\nprivacy rights and imposed worldwide obligations on companies processing personal data of European Union (“EU”) users, which\ncreated a greater compliance burden for companies with European users, and subjects violators to substantial monetary penalties. The\nUnited Kingdom has implemented legislation that substantially implements the GDPR and which also provides for substantial monetary penalties.\nIn June 2021, the European Commission announced a decision of “adequacy” concluding that the United Kingdom ensures an equivalent\nlevel of data protection to the GDPR, which provides some relief regarding the legality of continued personal data flows from the European\nEconomic Area to the United Kingdom. Such adequacy decision must, however, be renewed after four years and may be modified or revoked\nin the interim. We cannot fully predict how United Kingdom data protection laws or regulations may develop in the medium to longer term,\nnor the effects of divergent laws and guidance regarding how data transfers to and from the United Kingdom will be regulated,\n\n \n\n19\n\n \n\n \n\nAnother\nexample is the State of California’s passage of the CCPA, which went into effect in 2020 and created new privacy rights for users\nresiding in the state, including a private right of action for data breaches. The California Privacy Rights Act (“CPRA”)\nwent into effect on January 1, 2023, and significantly modified the CCPA, resulting in further uncertainty and requiring us to incur\nadditional costs and expenses in an effort to comply. Additionally, other states are considering, and in some cases have enacted, comprehensive\nprivacy legislation, some of which provide for private rights of action, which may increase the likelihood of class action litigation\nthat could also adversely affect our reputation, business, financial condition, and results of operations. For example, several states\nin the U.S. have proposed or enacted laws that contain obligations similar to the CCPA and CPRA that have taken effect or will take effect\nin coming years. The U.S. federal government is also contemplating federal privacy legislation. Our efforts to comply with existing and\nfuture legal requirements has required us and will continue to require us to devote significant operational resources and incur significant\nexpenses. Our privacy and data protection compliance and oversight efforts will require significant time and attention from our management\nand board of directors.\n\n \n\nFurther,\nchildren’s privacy has been a focus of recent enforcement activities and subjects our business to potential liability that could\nadversely affect our business, financial condition, or operating results. Enforcement of COPPA, which requires companies to obtain parental\nconsent before collecting personal information from children known to be under the age of 13or from child-directed websites or online\nservices, has increased in recent years. In addition, the GDPR prohibits certain processing of the personal information of children under\nthe age of 13 to 16 (depending on jurisdiction) without parental consent where consent is used as the lawful basis for processing that\npersonal information. The CCPA, as amended and supplemented by the CPRA, requires companies to obtain the consent of children in California\nunder the age of 16 (or parental consent for children under the age of 13) before selling their personal information. There also may\nbe various laws, regulations, industry standards, codes of conduct, or other actual or asserted obligations relating to children’s\nprivacy to which we may be, or be asserted to be, subject, or that may otherwise impact our business and operations. For example, the\nUnited Kingdom’s Age Appropriate Design Code (“AADC”) is one such regulatory framework that has been adopted in the\nUnited Kingdom that focuses on online safety and protection of children’s privacy online, and similar frameworks are being considered\nfor adoption in other jurisdictions. California also has enacted the California Age-Appropriate Design Code Act (“ADCA”),\nwhich will take effect on July 1, 2024. The ADCA implements into law certain principles taken from the AADC, among other things, and\nimposes substantial new obligations upon companies that offer online services, products, or features “likely to be accessed”\nby children, defined under the ADCA as anyone under 18 years of age. Although we take reasonable efforts to comply with these laws and\nregulations, we may in the future face claims under COPPA, the GDPR, the CCPA, the CRPA, or other laws, regulations, or other actual\nor asserted obligations relating to children’s privacy.\n\n \n\nAll\nof our mobile games are subject to privacy policies and terms of service located in application storefronts, within our mobile games,\nand on our respective websites. We endeavor to comply with industry standards and are subject to the terms of our privacy-related obligations\nand commitments to users and third parties. We strive to comply with all applicable laws, policies, legal obligations, and certain industry\ncodes of conduct relating to privacy and data protection, to the extent reasonably possible. It is possible, however, that these obligations\nmay be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or\nour practices. It is also possible that new laws, policies, legal obligations, or industry codes of conduct may be passed, or existing\nlaws, policies, legal obligations, or industry codes of conduct may be interpreted in such a way that could prevent us from being able\nto offer services to citizens of a certain jurisdiction or may make it costlier or more difficult for us to do so. Any failure or perceived\nfailure by us to comply with our terms of service or privacy policy, or with applicable laws, regulations, or legal, contractual, or\nother actual or asserted obligations to users or third parties, concerning privacy, information security, data protection, consumer protection,\nor protection of minors, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release\nor transfer of personally identifiable information or other user data, may result in governmental enforcement actions or other proceedings,\nclaims, demands, and litigation by private parties, or public statements against us by consumer advocacy groups or others and could cause\nour users to lose trust in us, which could adversely affect our business, financial condition, or results of operations. Additionally,\nif third parties we work with, such as users, co-developers, vendors, or service providers, violate applicable laws or our policies,\nsuch violations may also put our users’ information at risk and could in turn adversely affect our reputation, business, financial\ncondition, and results of operations.\n\n \n\n20\n\n \n\n \n\n**Our\nbusiness is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing, which could subject us to\nclaims or otherwise adversely affect our business, financial condition, and results of operations.**\n\n \n\nWe\nare subject to a variety of laws in the United States and abroad that affect our business, including state and federal laws regarding\nconsumer protection, electronic marketing, protection of minors, data protection, and privacy, competition, taxation, intellectual property,\nmoney transmission, money laundering, investment screening, export, and national security, which are continuously evolving and developing.\nThe scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly\nlaws outside the United States. There is a risk that existing or future laws may be interpreted in a manner that is not consistent with\nour current practices and which could adversely affect our business. As our business and service offerings grow and evolve and our apps\nare used in a greater number of countries, we may also become subject to laws and regulations in additional jurisdictions or other jurisdictions\nmay claim that we are required to comply with their laws and regulations. The regulation of AI technologies is a relatively new and evolving\narea of law which we may be subject to as some of the tools we use to develop and co-develop our apps incorporate AI technologies, and\nas we continue to explore the use of AI in our future offerings, including our apps. For example, in the EU, the EU Artificial Intelligence\nAct, once enacted, will impose a regulatory framework for companies’ development and use of AI systems. Beyond the EU and U.S.,\nmore than 37 countries have proposed AI-related legal frameworks. There is a risk that existing or future laws may be interpreted in\na manner that is not consistent with our current practices and that could adversely affect our business.\n\n \n\nWith\nrespect to our apps, we are potentially subject to a number of foreign and domestic laws and regulations that affect the offering of\ncertain types of content, many of which are ambiguous or still evolving and could be interpreted in ways that could adversely affect\nour business or expose us to liability. In addition, the increased attention focused upon liability issues as a result of lawsuits and\nlegislative proposals could harm our reputation or otherwise impact the growth of our business. It is difficult to predict how existing\nor new laws may be applied to these or similar game mechanics or genres. Further, laws or regulations may vary significantly across jurisdictions.\n\n \n\nFurthermore,\nthe growth and development of electronic commerce and virtual goods may prompt calls for more stringent consumer protection laws\nthat may impose additional burdens on companies such as Core AI that conduct business through the internet and mobile devices. For\nexample, China implemented a policy in September 2021 that restricts online gaming for those under age 18 to one hour in the evening\non Fridays, weekends, and public holidays. In addition, other countries such as Australia have implemented or are considering\nimplementing similar restrictions. We anticipate that scrutiny and regulation of our industry will increase and we will be required\nto devote legal and other resources to addressing such regulation. For example, existing laws or new laws regarding the labeling of\nfree-to-play mobile games, or the regulation of currency, banking institutions, unclaimed property or money transmission, may be\ninterpreted to cover our mobile games and the virtual currency, goods, or payments that we receive. We may also expand into new\nbusiness opportunities that subject us to additional laws and regulations. As such, we may be required to seek licenses,\nauthorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and\nother requirements and we may be subject to additional regulation and oversight, all of which could significantly increase our\noperating costs. Changes in current laws or regulations or the imposition of new laws and regulations in the United States or\nelsewhere regarding these activities may lessen the growth of the mobile app industry. Any costs that we incur as a result of\nadapting to laws and regulations, or as a result of liability in connection therewith, could adversely affect our business,\nfinancial condition, and results of operations.\n\n \n\n**The\ndevelopment and use of AI in our Core Gaming business, combined with an uncertain regulatory environment, may adversely affect our\nbusiness, reputation, financial condition or results of operations.**\n\n \n\nWe\nuse AI technologies in our Core Gaming business, and we are investing in the expansion of our AI capabilities, including possibly\ngenerative AI. These technologies are complex and rapidly evolving. The introduction of AI technologies into new or existing\nproducts may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality, privacy, data protection,\nor security risks, ethical concerns, or other complications that could adversely affect our business, reputation, financial\ncondition or results of operations. The impact of AI technology on intellectual property ownership and licensing rights, including\ncopyright, has not been fully addressed by U.S. courts or other federal or state laws or regulations, and the use of third-party AI\ntechnologies in connection with our products and services may result in exposure to claims of copyright infringement or other\nintellectual property misappropriation. AI technologies, including generative AI, may create content that appears correct but is\nfactually inaccurate or flawed. Our customers or others may rely on or use this flawed content to their detriment, which may expose\nus to brand or reputational harm, competitive harm, and/or legal liability.\n\n \n\n21\n\n \n\n \n\n**We\nare subject to the Foreign Corrupt Practices Act, and similar anti-corruption and anti- bribery laws, and non-compliance with such laws\ncould subject us to criminal penalties or significant fines and adversely affect our business and reputation.**\n\n \n\nWe\nare subject to the Foreign Corrupt Practices Act (the “FCPA”) and similar anti-corruption and anti-bribery laws applicable\nin the jurisdictions in which we conduct business. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years,\nare interpreted broadly and prohibit companies, their employees, and third party business partners, representatives, and agents from\npromising, authorizing, making or offering improper payments or other benefits, directly or indirectly, to government officials and others\nin the private sector in order to influence official action, direct business to any person, gain any improper advantage, or obtain or\nretain business. As we continue to expand our business internationally, our risks under these laws increase.\n\n \n\nWe\nand our third-party business partners, representatives, and agents may have direct or indirect interactions with officials and employees\nof government agencies or state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of\nour employees, third-party business partners, representatives, and agents, even if we do not explicitly authorize such activities. These\nlaws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent\nany such actions. While we have policies and procedures to address compliance with such laws, we cannot assure you that our employees,\nthird-party business partners, representatives, and agents will not take actions in violation of our policies or applicable law, for\nwhich we may be ultimately held responsible and our exposure for violating these laws increases as our international presence expands\nand as we increase sales and operations in foreign jurisdictions.\n\n \n\nAny\nviolation of the FCPA or other applicable anti-corruption laws could result in whistleblower complaints, adverse media coverage, investigations,\nloss of export privileges, severe criminal or civil sanctions, suspension or disbarment from U.S. government contracts, substantial diversion\nof management’s attention, significant legal fees and fines, severe criminal or civil sanctions against us, our officers, or our\nemployees, disgorgement of profits, other sanctions and remedial measures, and prohibitions on the conduct of our business, any of which\ncould adversely affect our reputation, business, financial condition, and results of operations.\n\n \n\n**We\nare subject to governmental export controls and economic sanctions laws that could impair our ability to compete in global markets\nor subject us to liability if we violate the controls.**\n\n \n\nOur\napps may be subject to U.S. export controls. Exports of our products and the underlying technology may require export authorizations,\nincluding by license, a license exception, or other appropriate government authorizations, including the filing of an encryption classification\nrequest or self-classification report, as applicable.\n\n \n\nFurthermore,\nour activities are subject to U.S. economic sanctions laws and regulations administered by the U.S. Department of Treasury’s Office\nof Foreign Assets Control that prohibit the shipment of most technologies to embargoed jurisdictions or sanctioned parties without the\nrequired export authorizations. If we need to obtain any necessary export license or other authorization for a particular sale, the process\nmay be time-consuming and may result in the delay or loss of opportunities to sell our products.\n\n \n\nWe\ntake precautions to prevent our products and the underlying technology from being provided, deployed or used in violation of export control\nand sanctions laws, including implementation of IP address blocking and sanctioned person screening, and are in the process of further\nenhancing our policies and procedures relating to export control and sanctions compliance. We cannot assure you, however, that our policies\nand procedures relating to export control and sanctions compliance will prevent violations in the future by us or our partners or agents.\nIf we are found to be in violation of U.S. sanctions or export control regulations, including failure to obtain appropriate import, export,\nor re-export licenses or permits, it can result in significant penalties and government investigations, as well as reputational harm\nand loss of business. Knowing and willful violations can result in possible incarceration for responsible employees and managers.\n\n \n\n22\n\n \n\n \n\nIn\naddition to the United States, various other countries regulate the import and export of certain encryption and other technology, including\nimport and export licensing requirements, and have enacted laws that could limit our ability to distribute our apps. Changes in our apps\nor future changes in export and import regulations may create delays in the introduction of new apps and the underlying technology in\ninternational markets, prevent our clients with global operations from deploying our products globally, or, in some cases, prevent the\nexport or import of our apps to certain countries, governments, or persons altogether. From time to time, various governmental agencies\nhave proposed additional regulation of encryption technology.\n\n \n\nOur\ngrowth strategy includes further expanding our operations and client and user base in international markets and acquiring companies that\nmay operate in countries where we do not already do business. Such acquisitions may subject us to additional or expanded export regulations.\nFurther, any change in export or import regulations or controls, economic sanctions or related legislation, or change in the countries,\ngovernments, persons, or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased\nability to export or offer our services to, existing or potential clients with global operations. Any decreased use of our apps or services\nor limitation on our ability to export or sell our apps and services in major international markets could adversely affect our business,\nfinancial condition, and results of operations.\n\n \n\n**We\nmay require additional capital to meet our financial obligations and support growth of our Core Gaming business, and this\ncapital may not be available on acceptable terms or at all.**\n\n \n\nWe\nintend to continue to make significant investments to support the growth of our business Core Gaming business and may require additional funds to\nrespond to business challenges, including the need to continue to develop our technologies and BI platform, enhance our existing\napps and develop new apps and features, improve our operating infrastructure, or enter into strategic acquisitions and other\nbusiness relationships. Accordingly, we may need to engage in equity, equity-linked, or debt financings to secure additional funds.\nIf we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could\nexperience significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to\nthose of holders of our common shares. Any debt financing that we secure in the future could involve offering additional security\ninterests and undertaking restrictive covenants relating to our capital raising activities and other financial and operational\nmatters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. We may not be\nable to obtain additional financing on terms favorable to us, if at all. Additionally, if we seek to access additional capital or\nincrease our borrowing, there can be no assurance that financing and credit may be available on favorable terms, if at all. If we\nare unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to\nsupport our business growth and to respond to business challenges could be significantly impaired, and our business, financial\ncondition, or results of operations could be adversely affected.\n\n \n\n**Changes\nin tax laws or tax rulings could adversely affect our effective tax rates, business, financial condition, and results of operations.**\n\n \n\nThe\ntax regimes we are subject to or operate under are unsettled and may be subject to significant change. Changes in tax laws or tax rulings,\nor changes in interpretations of existing laws, could cause us to be subject to additional income-based taxes and non-income taxes (such\nas payroll, sales, use, value added, digital, net worth, property, and goods and services taxes), which in turn could adversely affect\nour financial condition and results of operations. For example, in December 2017, the U.S. federal government enacted the tax reform\nlegislation known as the Tax Cuts and Jobs Act (the 2017 Tax Act). The 2017 Tax Act significantly changed the existing U.S. corporate\nincome tax laws by, among other things, lowering the U.S. corporate tax rate, implementing a partially territorial tax system, and imposing\na one-time deemed repatriation tax on certain post-1986 foreign earnings. In addition, beginning in 2022, the Tax Act will require U.S.\nresearch and experimental expenditures to be capitalized and amortized ratably over a five-year period. Any such expenditures attributable\nto research conducted outside the U.S. must be capitalized and amortized over a 15-year period. Furthermore, many countries in the EU,\nas well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, have recently\nproposed or recommended changes to existing tax laws or have enacted new laws that could impact our tax obligations. Some of these or\nother new rules could result in double taxation of our international earnings. Any significant changes to our future effective tax rate\ncould adversely affect our business, financial condition, and results of operations.\n\n \n\n23\n\n \n\n \n\n**We\nmay have exposure to greater than anticipated tax liabilities.**\n\n \n\nOur\nincome tax obligations are based in part on our corporate operating structure and intercompany arrangements, including the manner in\nwhich we develop, value, manage, and use our intellectual property and the valuation of our intercompany transactions. The tax laws applicable\nto our business, including the laws of the United States and other jurisdictions, are subject to interpretation and certain jurisdictions\nare aggressively interpreting their laws in new ways in an effort to raise additional tax revenue. Our existing corporate structure and\nintercompany arrangements have been implemented in a manner we believe is in compliance with current prevailing tax laws. The taxing\nauthorities of the jurisdictions in which we operate, however, may challenge our methodologies for valuing developed technology or intercompany\narrangements, which could impact our worldwide effective tax rate and adversely affect our financial condition and results of operations.\nMoreover, changes to our corporate structure, including through acquisitions, could impact our worldwide effective tax rate and adversely\naffect our business, financial condition, and results of operations.\n\n \n\nSignificant\njudgment is required in evaluating our tax positions and our worldwide provision for (benefit from) taxes. During the ordinary course\nof business, there are many activities and transactions for which the ultimate tax determination is uncertain. Our tax obligations and\neffective tax rates could be adversely affected by changes in the relevant tax, accounting, and other laws, regulations, principles,\nand interpretations, including those relating to income tax nexus, by our earnings being lower than anticipated in jurisdictions where\nwe have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates, by challenges to our\nintercompany relationships and transfer pricing arrangements. The relevant taxing authorities may disagree with our determinations as\nto the income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and our position were not sustained,\nwe could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax\nrates, reduced cash flows and lower overall profitability of our business, with some changes possibly affecting our tax obligations in\nfuture or past years. We believe that our financial statements reflect adequate reserves to cover such a contingency, but there can be\nno assurances in that regard.\n\n \n\n**If\nwe are found liable for content that is distributed through or advertising that is served through our apps, our business could be adversely\naffected.**\n\n \n\nAs\na distributor of content, we face potential liability for negligence, copyright, patent or trademark infringement, public performance\nroyalties, or other claims based on the nature and content of materials that we distribute. The Digital Millennium Copyright Act (the\n“DMCA”) is intended, in part, to limit the liability of eligible service providers for caching, hosting, or linking to user\ncontent that includes materials that infringe copyrights or other rights. We rely on the protections provided by the DMCA in conducting\nour business.\n\n \n\nHowever,\nthe DMCA and similar statutes and doctrines that we may rely on in the future are subject to uncertain judicial interpretation and regulatory\nand legislative amendments. Future regulatory or legislative changes may ultimately require us to take a more active approach towards\ncontent moderation, which could diminish the depth, breadth, and variety of content we offer and, in so doing, reduce our revenue. Moreover,\nthe DMCA provides protections primarily in the United States. If the rules around these statutes and doctrines change, if international\njurisdictions refuse to apply similar protections, or if a court were to disagree with our application of those rules to our business,\nwe could incur liability and our business could be adversely affected. If we become liable for these types of claims as a result of the\ncontent that is included in our apps or the advertisements that are served in our apps, then our business may be adversely affected.\nLitigation to defend these claims could be costly and the expenses and damages arising from any liability could adversely affect our\nbusiness. Our insurance may not be adequate to cover these types of claims or any liability that may be imposed on us.\n\n \n\n24\n\n \n\n \n\n**Legal\nor regulatory proceedings and settlements could cause us to incur additional expenses or otherwise adversely affect our business, financial\ncondition, and results of operations.**\n\n \n\nWe\nare involved in or may become involved in claims, suits, government investigations, including formal and informal inquiries from government\nauthorities and regulators, and proceedings arising in the ordinary course of our business, including actions with respect to intellectual\nproperty claims, securities claims, privacy, data protection, or law enforcement matters, tax matters, labor and employment claims, commercial\nand acquisition-related claims, and other matters. We may become the subject of investigations, inquiries, data requests, requests for\ninformation, actions, and audits in the United States and around the world, particularly in the areas of privacy, data protection, law\nenforcement, consumer protection, and competition, as we continue to grow and expand our operations.\n\n \n\nAny\nsuch claims, suits, government investigations, and proceedings are inherently uncertain and their results cannot be predicted with certainty.\nRegardless of their outcomes, such legal or regulatory proceedings can have an adverse impact on us because of legal costs, diversion\nof management and other personnel attention, and other factors. In addition, it is possible that a resolution of one or more such proceedings\ncould result in substantial costs, civil and criminal liability, penalties, or sanctions, as well as judgments, consent decrees, or orders\npreventing us from offering certain features, functionalities, products or services, or requiring a change in our business practices,\nproducts or technologies, which could adversely affect our reputation, business, financial condition, and results of operations.\n\n \n\n**Risks\nRelated to Hong Kong**\n\n \n\n**The\nChinese government, in general, could exercise significant oversight and discretion over the conduct of our business and has made statements\nindicating an intent to exert more oversight and control over offerings that are conducted overseas and over foreign investment in China-based\nissuers.**\n\n \n\nAlthough\nour subsidiary Newbyera is based in a special administrative region of the PRC, which enjoys separate governing and economic systems\nfrom that of mainland China under the principle of one country, two systems, Hong Kong is part of China and, as such, the Chinese government\ncould intervene or influence our operations at any time, which could result in a material change in Newbyera’s operations and the\nvalue of our Common Stock. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted\noverseas or over foreign investment in China-based issuers, in particular any effort to extend such actions directly or indirectly to\nHong Kong-based companies, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors\nand cause the value of such securities to significantly decline or be worthless.\n\n \n\n**We\nare subject to risks relating to economic, political, legal, and social conditions in Hong Kong.**\n\n \n\nAny\nadverse changes in the economic, political, legal, and social conditions of Hong Kong could lead to an adverse impact on the demand for\nNewbyera’s services and result in deteriorating financial performance of the Company.\n\n \n\nWe\ncannot assure you that there will not be any political movements or large-scale political unrest in Hong Kong that could adversely impact\nthe market. If such unrest or movement persists for a substantial period of time, it may lead to disruption of the general economic,\npolitical, and social conditions in Hong Kong, and Newbyera’s overall business, results of operations, and financial condition\nmay be adversely affected.\n\n \n\n**The\nLaw of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security\nLaw”) could impact Newbyera’s operations in Hong Kong.**\n\n \n\nOn\nJune 30, 2020, the Standing Committee of the PRC National People’s Congress adopted the Hong Kong National Security Law. This law\ndefines the duties of the government bodies responsible for safeguarding national security and specifies four categories of offences\n- secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national security\n- and their corresponding penalties. On July 14, 2020, the U.S. President signed the Hong Kong Autonomy Act (the “HKAA”),\ninto law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities who are determined to have\nmaterially contributed to the erosion of Hong Kong’s autonomy. On August 7, 2020, the U.S. government imposed HKAA-authorized sanctions\non eleven individuals, including the then Hong Kong Chief Executive Carrie Lam and the current Hong Kong Chief Executive John Lee. On\nOctober 14, 2020, the U.S. State Department submitted to relevant committees of Congress the report required under the HKAA, identifying\npersons materially contributing to “the failure of the Government of China to meet its obligations under the Joint Declaration\nor the Basic Law.” The HKAA further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign\nfinancial institutions that knowingly conduct a significant transaction with a foreign person sanctioned under this authority. The imposition\nof sanctions may directly affect foreign financial institutions as well as any third parties or customers dealing with any foreign financial\ninstitution that is targeted. The ramifications of the Hong Kong National Security Law and the HKAA are still unfolding, and it is therefore\ndifficult to predict the full impact on Hong Kong and companies located in Hong Kong. If Newbyera is accused of violating the Hong Kong\nNational Security Law or the HKAA by competent authorities, its business operations, financial position, and results of operations could\nbe materially and adversely affected.\n\n \n\n**Risks\nRelated to our Planned Data Center Business**\n\n** **\n\n**We\nhave no operating history which can be evaluated with respect to our planned AI data center business.**\n\n** **\n\nWe\nrecently have begun to focus on transforming the Company into a global AI technology and infrastructure company by seeking to expand\nour business operations into the development of a next-generation, vertically integrated global network of high-performance computing\n(“HPC”) and artificial intelligence (“AI”) data centers. However, we have no operating history which can be evaluated\nwith respect to our planned business and individually, only limited experience in this sector. Accordingly, there can be no assurance\ngiven that we can successfully establish this business or to the extent we are successful in doing so, that it will ever generate significant\nrevenues or achieve profitability.\n\n \n\n**We\nintend to primarily rely on joint ventures and similar collaborations with third parties to identify potential development sites, and\nconstruct and operate HPC and AI data centers domestically and internationally.**\n\n** **\n\nWe\nintend to primarily rely on joint ventures and similar collaborations with third parties to identify and potential development sites,\nand design, build and operate HPC and AI data centers domestically and internationally. In these joint ventures and collaborations, we\nwill seek to combine Core Gaming’s AI expertise and AI-native infrastructure and our capital markets expertise with the experience\nof our joint venture partners in identifying, development sites and designing, building and operating data centers. During the first\nquarter of 2026, we have entered into three joint venture agreements with Optimus Technology Group, Toto Digital & Technology Solutions,\nLLC and Allianca Group, Inc. for the development of HPC and AI data centers domestically and internationally in their respective market\nsectors and a memorandum of understanding with CSPM Resources SDN BHD to pursue data center development opportunities in Malaysia. In\ngeneral, each of these collaborations provide that in each data center project mutually agreed upon our partner will be responsible for\npresenting potential projects and approved projects, with Core Holdings using it commercially reasonable best efforts to secure financing\nfor the projects. The collaborations will be 50/50 joint ventures, with our equity interest in the project subject to increase up to\n80% depending on the amount of financing capital we are able to secure and contribute to the project. Upon completion, we expect that\nthe data centers will either be operated by the respective joint venture or sold to a third party or third parties on a turnkey basis.\nAs these collaborations are in their early stages, no projects have as yet been presented to the respective joint ventures for approval,\nnot has any financing commitment been secured. Accordingly, there can be no assurance that our joint venture arrangements will lead to\nthe successful development of any domestic or international data centers or that the Company will be successful in implementing its business\nplan. Should any of these joint ventures lead to the design, building and operation of HPC and AI data centers, the failure to maintain\ngood relations with our joint venture partners or a breach of any of the joint venture agreements could adversely affect our business,\nfinancial condition and results of operations.\n\n \n\n25\n\n \n\n \n\n**The\ndesign, building and operation of HPC and AI data centers is capital intensive and there can be no assurance that the necessary financing\ncan be secured for development efforts.**\n\n** **\n\nThe\ndesign, building and operation of HPC and AI data centers in capital intensive. It will largely be our responsibility to secure financing\nfor any project agreed upon with our joint venture partners. There can be no assurance that financing will be available when and in the\namounts required, as well as on commercially reasonable terms. If we are unable to secure financing when required, our ability to implement\nour expansion plans and our business, financial condition and results of operations will be adversely affected.\n\n \n\n**The\nsuccess of any data center project will be dependent in large part on the ability to purchase significant quantities of electric power\non commercially reasonable terms. Failure to secure electric power in sufficient quantities and at commercially reasonable rates can\nadversely affect the operation of any data center, as well as our business, financial condition and results of operations.**\n\n \n\nHPC\nand AI data centers are significant consumers of electric power and their success is dependent in part on the ability to purchase significant\nquantities of electric power on commercially reasonable terms. If we are unable to do so for any HPC or AI data center which we ultimately\ndevelop and construct with our joint venture partners, operation of that data center and our business, financial condition and results\nof operations will be adversely affected.\n\n** **\n\n**Our\nplanned HPC and AI data center business is subject to rapid changes in customer requirements, technology standards and infrastructure\ndesign, which may increase costs, delay development or make our facilities less competitive.**\n\n** **\n\nThe\nmarkets for HPC and AI infrastructure are evolving rapidly. Customer requirements may change quickly with respect to power density, cooling\narchitecture, rack design, network configuration, resiliency standards, security and deployment timelines. Advances in semiconductors,\nsystems architecture, model efficiency and data center design may also change the infrastructure needed to support these workloads. As\na result, facilities designed based on current assumptions may require redesign, retrofitting or additional capital to remain commercially\nattractive. If we do not anticipate and respond to these changes in a timely and cost-effective manner, our development timelines may\nbe extended, our costs may increase and our facilities may become less competitive.\n\n** **\n\n**We\nmay be unable to procure, install or integrate specialized equipment required for HPC and AI workloads, including electrical, cooling,\nnetworking and other long-lead-time components, on acceptable terms or at all.**\n\n** **\n\nThe\ndesign, building and operation of HPC and AI data centers depend on the timely availability of specialized equipment and materials, including\ntransformers, switchgear, generators, cooling systems, liquid cooling components, network equipment, fiber infrastructure, control systems\nand other critical components. Many of these items have long lead times, are available from a limited number of suppliers or are subject\nto allocation, pricing pressure, transportation constraints or import-related disruptions. Even when equipment is available, installation\nand integration may be delayed by design changes, contractor performance, site conditions, commissioning issues or interoperability challenges.\nFailure to procure, install or integrate this equipment on schedule and on acceptable terms could delay project completion, increase\ncosts, limit capacity, impair performance or reduce profitability.\n\n \n\n**Tariffs,\ntrade restrictions, import duties, export controls and other changes in trade policy may increase our capital costs, disrupt our supply\nchain and adversely affect the design, building and operation of our planned data centers.**\n\n** **\n\nOur\nplanned data center business will depend on equipment, materials and components that may be sourced, directly or indirectly, from foreign\nmanufacturers or suppliers, including electrical equipment, cooling systems, generators, transformers, switchgear, networking equipment,\nsemiconductors, servers and other specialized infrastructure. Changes in tariffs, import duties, trade restrictions, export controls,\nsanctions, customs rules or other trade policies may increase the cost of these items, reduce availability, lengthen delivery times or\notherwise disrupt our supply chain. These measures may also increase our suppliers’ and contractors’ costs and create broader\nmarket uncertainty that delays customer decisions or infrastructure investment. If we cannot mitigate these impacts through pricing,\nsourcing alternatives or contractual protections, our capital expenditures, operating costs, development timelines and project economics\ncould be materially adversely affected.\n\n \n\n**A\ndecline in demand for HPC and AI data center capacity or an oversupply of such capacity could adversely affect our business, financial\ncondition and results of operations.**\n\n** **\n\nShould\nthere be either a decline in demand for HPC and AI data center capacity or an oversupply of such capacity, a decline in use of our data\ncenters or in the prices charged to clients may result, which could adversely affect our business, financial condition and results of\noperations.\n\n \n\n**Many\nof the risks set forth in this “Item 3. Key Information – D. Risk Factors” and elsewhere in this Annual Report relating\nto our Core Gaming business are equally as applicable to our planned data center business.**\n\n** **\n\nMany\nof the risks set forth in this “**Item 3. Key Information – D. Risk Factors**” and elsewhere in this Annual Report\nrelating to our Core Gaming business are equally as applicable to our planned data center business. These include, among others, risks\nrelated to:\n\n \n\n \n●\nCyberattacks and data breaches;\n\n \n\n \n●\nintense industry competition;\n\n \n\n \n●\nrapid technological change in the industry and the ability\nto meet such changes;\n\n \n\n \n●\nthe ability to manage growth;\n\n \n\n \n●\ninternational operations;\n\n \n\n \n●\neconomic, market and geopolitical conditions and natural disasters;\n\n \n\n●compliance\nwith continually evolving laws and regulations concerning, among other matters, privacy,\ninformation security and data protection;\n\n \n\n●compliance\nwith a variety of other U.S. and foreign laws;\n\n \n\n●the\ndevelopment and use of AI;\n\n \n\n●compliance\nwith anti-corruption and bribery laws;\n\n \n\n●changes\nin tax laws or tax rulings;\n\n \n\n●greater\nthan anticipated tax liabilities; and\n\n \n\n●legal\nor regulatory proceedings and settlements.\n\n** **\n\n****\n\n26\n\n \n\n****\n\n** **\n\n**Risks\nRelated to our Intellectual Property**\n\n \n\n**Failure\nto protect or enforce our proprietary and intellectual property rights or the costs involved in such enforcement could adversely affect\nour business, financial condition, and results of operations.**\n\n \n\nWe\nregard our technologies, BI platform, and apps and related source code as proprietary and rely on a variety of methods, including a combination\nof copyright, patent, trademark, and trade secret laws and non-disclosure agreements, to protect our proprietary rights. We view the\nprotection of our trade secrets, copyrights, trademarks, service marks, trade dress, domain names, patents, and other product rights\nas critical to our success. We strive to protect our intellectual property rights by relying on federal, state, and common law rights,\nas well as contractual restrictions and business practices. We also enter into confidentiality and invention assignment agreements with\nour contractors and confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure\nand use of, our proprietary information. These contractual arrangements and business practices, however, may not prevent the misappropriation\nof our proprietary information or deter independent development of similar technologies by others.\n\n \n\nWe\nown or license, and pursue the registration of, copyrights, trademarks, service marks, domain names, and patents in the United States\nand in certain locations outside the United States. This process can be expensive and time-consuming, may not always be successful depending\non local laws or other circumstances, and we also may choose not to pursue registrations in every location depending on the nature of\nthe project to which the intellectual property rights pertain. We may, over time, increase our investments in protecting our creative\nworks.\n\n \n\nWe\nare aware that some unauthorized copying of our apps occurs, and if a significantly greater amount of unauthorized copying of our apps\nwere to occur, it could adversely affect our business. In addition, even if authorized copying of our apps occurs, third-party platforms\nmay not remove infringing material. We also cannot be certain that existing intellectual property laws will provide adequate protection\nfor our products in connection with emerging technologies. As a result, our ability to fully protect our products, technologies and solutions\nunder current and future legal regimes may be limited or impacted by future laws, regulations, interpretations or other legislative or\njudicial actions. Litigation may be necessary to enforce our intellectual property rights, protect our trade secrets, or determine the\nvalidity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result\nin substantial costs, adverse publicity, and diversion of management and technical resources. If we fail to maintain, protect, and enhance\nour intellectual property rights, our business, financial condition, and results of operations could be adversely affected.\n\n \n\n**We\nare, and may in the future be, subject to intellectual property disputes, which are costly to defend and could require us to pay significant\ndamages and could limit our ability to use certain technologies in the future.**\n\n \n\nFrom\ntime to time, we have faced, and we may face in the future, allegations that we have infringed the trademarks, copyrights, patents, and\nother intellectual property rights of third parties. Intellectual property litigation may be protracted and expensive, and the results\nare difficult to predict. As the result of any court judgment or settlement, we may be obligated to alter our technologies or apps, in\na particular geographic region or worldwide, pay royalties or significant settlement costs, purchase licenses, or develop substitutes.\n\n \n\n**Some\nof our development tools contain open source software, and we license some of our software through open source projects, which may pose\nparticular risks to our proprietary software, products, and services in a manner that could adversely affect our business, financial\ncondition, and results of operations.**\n\n \n\nWe\nuse open source software in our app creation tools and apps and expect to continue to use open source software in the future. In addition,\nwe contribute software source code to open source projects under open source licenses or release internal software projects under open\nsource licenses, and anticipate continuing to do so in the future. The terms of many open source licenses to which we are subject have\nnot been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner\nthat imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. Additionally,\nunder some open source licenses, if we combine our proprietary software with open source software in a certain manner, third parties\nmay claim ownership of, a license to, or demand release of, the open source software or derivative works that we developed using such\nsoftware, which could include our proprietary source code. Such third parties may also seek to enforce the terms of the applicable open\nsource license through litigation which, if successful, could require us to make our proprietary software source code freely available,\npurchase a costly license, or cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement.\nThis re-engineering process could require significant additional research and development resources, and we may not be able to complete\nit successfully. In addition to risks related to open source license requirements, use of certain open source software may pose greater\nrisks than use of third-party commercial software, since open source licensors generally do not provide warranties or controls on the\norigin of software. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our business,\nfinancial condition, and results of operations.\n\n \n\n**Our\nability to acquire and maintain licenses to intellectual property may affect our business, financial condition, and results of operations.\nCompetition for these licenses may make them more expensive and increase our costs.**\n\n \n\nFrom\ntime to time, we also acquire rights to third-party intellectual property. Proprietary licenses may limit our use of intellectual property\nto specific uses and for specific time periods, require time and attention of licensors in providing guidance and related approvals,\nand include other contractual obligations with which we must comply. Additionally, competition for these licenses is intense and often\nresults in increased advances, minimum payment guarantees, and royalties to the licensor, and as such we may be unable to identify suitable\nlicensing targets or complete licensing arrangements. If we are unable to obtain and remain in compliance with the terms of these licenses\nor obtain additional licenses on reasonable economic terms, our business and results of operations could be adversely affected. Further,\nif the mix of the games we publish shifts toward mobile games in which we use licensed intellectual property, or if we develop additional\napps that require licensing of third-party intellectual property, our overall margins may be reduced due to royalty obligations.\n\n \n\nIn\naddition, many of our apps are built on proprietary source code of third parties, such as Unity Software. Unity Software offers certain\nsolutions that may compete with our offerings. If we are unable to renew licenses to proprietary source code underlying our mobile games,\nor the terms and conditions of these licenses change at the time of renewal, our business, financial condition, and results of operations\ncould be adversely affected. We rely on third parties, including Unity Software, to maintain versions of their proprietary engines that\nallow us to distribute our mobile games on multiple platforms. If a third party from whom we license source code discontinues support\nfor one or more of these platforms, our business, financial condition, and results of operations could be adversely affected.\n\n \n\n27\n\n \n\n \n\n**Risks\nRelated to Ownership of Our Common Shares**\n\n \n\n**We\ndo not know whether an active, liquid and orderly trading market will develop for our Common Shares or what the market price of our Common\nShares will be and as a result it may be difficult for you to sell your Common Shares.**\n\n \n\nYou\nmay not be able to sell your shares quickly or at the market price if trading in our Common Shares is not active. an inactive market\nmay also impair our ability to raise capital by selling our securities and may impair our ability to enter into strategic partnerships\nor acquire companies or products by using our Common Shares as consideration.\n\n \n\n**We\nexpect that our stock price will fluctuate significantly.**\n\n \n\nThe\ntrading price of our Common Shares is likely to be volatile and subject to wide price fluctuations in response to various factors, including:\n\n \n\n \n●\nmarket\nconditions in the broader stock market in general, or in our industry in particular;\n\n \n \n \n\n \n●\nactual\nor anticipated fluctuations in our quarterly financial and operating results;\n\n \n \n \n\n \n●\nintroduction\nof new products and services by us or our competitors;\n\n \n \n \n\n \n●\nsales,\nor anticipated sales, of large blocks of our stock;\n\n \n \n \n\n \n●\nissuance\nof new or changed securities analysts’ reports or recommendations;\n\n \n \n \n\n \n●\nfailure\nof industry or securities analysts to maintain coverage of our company, changes in financial estimates by any industry or securities\nanalysts that follow our company, or our failure to meet such estimates;\n\n \n \n \n\n \n●\nadditions\nor departures of key personnel;\n\n \n \n \n\n \n●\nregulatory\nor political developments;\n\n \n \n \n\n \n●\nchanges\nin accounting principles or methodologies;\n\n \n \n \n\n \n●\nacquisitions\nby us or by our competitors;\n\n \n \n \n\n \n●\nlitigation\nand governmental investigations; and\n\n \n \n \n\n \n●\neconomic,\npolitical and geopolitical conditions or events.\n\n \n\nThese\nand other factors may cause the market price and demand for our Common Shares to fluctuate substantially, which may negatively affect\nthe liquidity of our Common Shares.\n\n \n\n**We\ndo not expect to pay any cash dividends for the foreseeable future.**\n\n \n\nWe\ndo not anticipate declaring or paying in the foreseeable future any cash dividends on our Common Shares. Instead, we plan to retain any\nearnings to finance our operations and growth plans discussed elsewhere in this Annual Report.\n\n \n\n**If\na substantial number of shares become available for sale and are sold in a short period of time, the market price of our Common Shares\ncould decline.**\n\n \n\nWe\ncannot predict whether future issuances of our Common Shares or the availability of shares for resale in the open market will decrease\nthe market price per Common Share. We are not restricted from issuing additional Common Shares of, including any securities that are\nconvertible into or exchangeable for, or that represent the right to receive Common Shares. Sales of a substantial number of our Common\nShares in the public market or the perception that such sales might occur could materially adversely affect the market price of our Common\nShares. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our\ncontrol, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our shareholders bear the risk of\nany future stock issuances reducing the market price of our Common Shares and diluting their stock holdings in us.\n\n \n\n**If\nwe are not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our Common Shares.**\n\n \n\nIn\norder to maintain the listing of our Common Shares and Warrants on the Nasdaq Capital Market, we must satisfy minimum financial and other\ncontinued listing requirements and standards, including those regarding minimum stockholders’ equity, minimum share price, and\ncertain corporate governance requirements. There can be no assurances that we will be able to comply with such applicable listing standards.\n\n \n\nIf\nthe Common Shares are delisted from Nasdaq at any time in the future, we could face significant material adverse consequences, including:\n\n \n\n \n●\na\nlimited availability of market quotations for our securities;\n\n \n \n \n\n \n●\nreduced\nliquidity;\n\n \n \n \n\n \n●\na\ndetermination that the Common Shares are a “penny stock” which will require brokers trading in our shares to adhere to\nmore stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for the Common Shares;\n\n \n \n \n\n \n●\na\nlimited amount of news and analyst coverage for our Company;\n\n \n \n \n\n \n●\na\ndecreased ability to issue additional securities or obtain additional financing in the future;.\n\n \n\n●decreased\nability of shareholders to transfer or sell their Common Shares; and\n\n \n\n●adverse\neffects pm the market price of the Common Shares.\n\n \n\n28\n\n \n\n \n\n**If\nour Common Shares become subject to the penny stock rules, it may be more difficult to sell our Common Shares.**\n\n \n\nThe\nSEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally\nequity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or authorized\nfor quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions\nin such securities is provided by the exchange or system). The over-the-counter market maintained by OTC Markets Group, Inc. does not\nmeet such requirements and if the price of our Common Shares is less than $5.00 and our Common Shares are no longer listed on a national\nsecurities exchange such as Nasdaq, our stock may be deemed a penny stock. The penny stock rules require a broker-dealer, at least two\nbusiness days prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver to the customer a standardized\nrisk disclosure document containing specified information and to obtain from the customer a signed and dated acknowledgment of receipt\nof that document. In addition, the penny stock rules require that prior to effecting any transaction in a penny stock not otherwise exempt\nfrom those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser\nand receive: (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement\nto transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements\nmay have the effect of reducing the trading activity in the secondary market for our Common Shares, and therefore shareholders may have\ndifficulty selling their Common Shares.\n\n \n\n**Because\nwe are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will\nhave less protection than you would have if we were a domestic issuer.**\n\n \n\nNasdaq\nListing Rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private\nissuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to\ncomply with the above requirement within one year of listing. The corporate governance practice in our home country does not require\na majority of our board to consist of independent directors. Thus, although a director must act in the best interests of the Company,\nit is possible that fewer board members will be exercising independent judgment and the level of board oversight on the management of\nour company may decrease as a result. In addition, Nasdaq Listing Rules also require foreign private issuers to have a compensation committee,\na nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three\nmembers. We, as a foreign private issuer, are not subject to these requirements. Nasdaq Listing Rules may require shareholder approval\nfor certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans\nand material revisions to those plans, and certain Common Share issuances. We intend to comply with the requirements of Nasdaq Listing\nRules in determining whether shareholder approval is required on such matters and to appoint a nominating and corporate governance committee.\nWe may, however, consider following home country practice in lieu of the requirements under Nasdaq Listing Rules with respect to certain\ncorporate governance standards which may afford less protection to investors.\n\n \n\n**General\nRisk Factors**\n\n \n\n**The\nunfavorable outcome of any future litigation, arbitration or administrative action could have a significant adverse impact on our financial\ncondition or results of operations.**\n\n \n\nFrom\ntime to time, we are a party to litigation, arbitration, or administrative actions. Our financial results and reputation could be negatively\nimpacted by unfavorable outcomes to any future litigation or administrative actions, including those related to the FCPA or other anti-corruption\nlaws. There can be no assurances as to the favorable outcome of any litigation or administrative proceedings. In addition, it can be\nvery costly to defend litigation or administrative proceedings and these costs could negatively impact our financial results.\n\n \n\n**If\nsecurities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price\nand trading volume could decline.**\n\n \n\nThe\ntrading market for our securities will depend in part on the research and reports that securities or industry analysts publish about\nus or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities\nor industry analysts commence coverage of our company, the trading price for our securities would likely be negatively impacted. In the\nevent securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes\ninaccurate or unfavorable research about our business, our stock price may decline. If one or more of these analysts ceases coverage\nof our company or fails to publish reports on us regularly, demand for our securities could decrease, which might cause our stock price\nand trading volume to decline.\n\n \n\n**We\nmay lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.**\n\n \n\nAs\ndiscussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and\ncurrent reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In the future, we\nwould lose our foreign private issuer status if (i) more than 50% of our outstanding voting securities are owned by U.S. residents and\n(ii) a majority of our directors or executive officers are U.S. citizens or residents, or we fail to meet additional requirements necessary\nto avoid loss of foreign private issuer status. If we lose our foreign private issuer status, we will be required to file with the SEC\nperiodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available\nto a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors\nand principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange\nAct. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the listing rules\nof the Nasdaq Capital Market. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional\nlegal, accounting and other expenses that we will not incur as a foreign private issuer.\n\n \n\n**We\nincur significant increased costs as a result of operating as a public company in the United States, and our management is required to\ndevote substantial time to new compliance initiatives.**\n\n \n\nAs\na public company in the United States, we incur significant legal, accounting and other expenses that we did not incur previously. We\nare subject to the reporting requirements of the Exchange Act, which requires, among other things that we file with the SEC annual, and\ncertain other reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently\nadopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies,\nincluding requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance\npractices.\n\n \n\nWe\nexpect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and\nto make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from\nother business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The\nincreased costs will decrease our net income or increase our consolidated net loss, and may require us to reduce costs in other areas\nof our business or increase the prices of our products or services. For example, we expect these rules and regulations to make it more\ndifficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs\nto maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond\nto these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons\nto serve on our board of directors, on our board committees or as executive officers.\n\n \n\n**If\nwe fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could\nbe impaired.**\n\n \n\nWe\nare subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq. The Sarbanes-Oxley\nAct requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial\nreporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability\nof financial reporting and the preparation of financial statements in accordance with U.S. GAAP. During the year end audit process\na deficiency in the design and operation of controls over revenue cut-off created a reasonable possibility that material misstatements\nof revenue and related accounts would not be prevented or detected on a timely basis. Accordingly, management concluded that this deficiency\nrepresents a material weakness in the Company’s ICFR as of December 31, 2025. The Company has begun implementing a remediation\nplan to address the material weakness.\n\n \n\n29"}