Filed Pursuant to Rule 424(b)(3)
Registration No. 333-258018
PROSPECTUS SUPPLEMENT NO. 1
To Prospectus dated July 30, 2021
image.jpg
PLAYSTUDIOS, Inc.
Up to 107,495,199 Shares of Class A Common Stock
Up to 10,996,631 Shares of Class A Common Stock Issuable Upon Exercise of Warrants
Up to 3,821,667 Warrants
This prospectus supplement no. 1 is being filed to update and supplement the information contained in the prospectus dated July 30, 2021 (the “Prospectus”), which forms part of our registration statement on Form S-1 (No. 333-258018) with the information contained in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed with the SEC on August 12. 2021 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.
The Prospectus and this prospectus supplement relate to the issuance by us of up to an aggregate of 10,996,631 shares of our Class A common stock, $0.0001 par value per share (the “Class A common stock”), which consists of (i) up to 7,174,964 shares of our Class A common stock that are issuable upon the exercise of 7,174,964 warrants (the “Public Warrants”) by the holders thereof and (ii) up to 3,821,667 shares of Class A common stock that are issuable upon the exercise of 3,821,667 warrants (the “Private Placement Warrants,” and together with the Public Warrants, the “Warrants”).
The Prospectus and prospectus supplement also relate to the resale from time to time by the selling securityholders named in the Prospectus (the “Selling Securityholders”) of (i) up to 107,495,199 shares of Class A common stock, including up to 10,693,624 shares of Class A common stock issuable as Earnout Shares (as defined in the Prospectus) and 1,444,962 shares of Class A common stock issuable upon the exercise of 1,444,962 options to purchase shares of Class A common stock (the “Class A Option Shares”) and (ii) 3,821,667 Private Placement Warrants. The shares of Class A common stock registered include 21,348,205 shares issuable upon conversion of: (i) 16,130,300 shares of our Class B common stock, par value $0.0001 per share (the “Class B common stock” and, together with the Class A common stock, our “common stock”), issued to Andrew S. Pascal, our Chairman of the Board and Chief Executive Officer, (ii) 3,026,112 shares of Class B common stock issuable as Earnout Shares and (iii) 2,191,793 shares of Class B common stock issuable upon the exercise of 2,191,793 options to purchase shares of Class B common stock (the “Class B Option Shares”, and together with the Class A Option Shares, the “Option Shares”). We will not receive any proceeds from the sale of shares of common stock or Private Placement Warrants by the Selling Securityholders pursuant to this prospectus, except with respect to amounts received by us upon exercise of the Options Shares or Warrants.
The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to twenty votes per share and is convertible into one share of Class A common stock. Outstanding shares of Class B common stock, all of which are held by Mr. Pascal and certain of his affiliates, represent approximately 74.6% of the voting power of our outstanding capital stock as of August 10, 2021.
We registered the securities for resale pursuant to the Selling Securityholders’ registration rights under certain agreements between us and the Selling Securityholders. Our registration of the securities covered by the Prospectus does not mean that the Selling Securityholders will offer or sell any of the shares of Class A common stock or Private Placement Warrants. The Selling Securityholders may offer, sell or distribute all or a portion of their shares of Class A common stock or Private Placement Warrants publicly or through private transactions at prevailing market prices or at negotiated prices. We provide more information about how the Selling Securityholders may sell the shares of Class A common stock or Private Placement Warrants in the section titled “Plan of Distribution” in the Prospectus.
This prospectus supplement incorporates into the Prospectus the information contained in our attached Current Report on Form 8-K, which was filed with the Securities and Exchange Commission on August 12, 2021.



We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), and are subject to reduced public company reporting requirements. This prospectus supplement complies with the requirements that apply to an issuer that is an emerging growth company.
You should read this prospectus supplement in conjunction with the Prospectus, including any supplements and amendments thereto. This prospectus supplement is qualified by reference to the Prospectus except to the extent that the information in the prospectus supplement supersedes the information contained in the Prospectus. This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including any supplements and amendments thereto. If there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement. Terms used in this prospectus supplement but not defined herein shall have the meanings given to such terms in the Prospectus.
Our Class A common stock is currently listed on The Nasdaq Global Market (“Nasdaq”) under the symbol “MYPS”, and our Public Warrants are currently listed on The Nasdaq Global Market under the symbol “MYPSW”. On August 11, 2021, the closing price of our Class A common stock was $5.75 and the closing price for our Public Warrants was $1.16.
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 7 of the Prospectus and in the other documents that are incorporated by reference in the Prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement of the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is August 12, 2021.


TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from         to
Commission File Number 001-39652
PLAYSTUDIOS, Inc.
(Exact name of registrant as specified in its charter)
Delaware98-1606155
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
10150 Covington Cross Drive
Las Vegas, NV 89144
(725) 877-7000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A common stockMYPSThe Nasdaq Stock Market LLC
Redeemable warrants exercisable for one Class A common stock at an exercise price of $11.50MYPSWThe Nasdaq Stock Market LLC
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
As of August 09, 2021, there were 109,623,364 shares of Class A common stock, $0.0001 par value per share, and 16,130,300 shares of Class B common stock, $0.0001 par value per share, issued and outstanding.
3

TABLE OF CONTENTS
Table of Contents

Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and June 30, 2020
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2021 and June 30, 2020
Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2021 and June 30, 2020
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and June 30, 2020

In this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” the “Company” and “PLAYSTUDIOS” mean PLAYSTUDIOS, Inc. (formerly Acies Acquisition Corp.) and our subsidiaries. On June 21, 2021 (the “Closing Date”), Acies Acquisition Corp., a Delaware corporation (“Acies” and after the Business Combination described herein, the “Company”), consummated a business combination (the “Business Combination”) pursuant to the terms of the Agreement and Plan of Merger, dated as of February 1, 2021 (the “Merger Agreement”), by and among Acies, Catalyst Merger Sub, Inc., a Delaware corporation (“First Merger Sub”), Catalyst Merger Sub II, Inc., a Delaware limited liability company ("Second Merger Sub"), and PlayStudios, Inc., a Delaware corporation (“Old PLAYSTUDIOS”). Immediately upon the consummation of the Business Combination and the other transactions contemplated by the Merger Agreement (collectively, the “Transactions”, and such completion, the “Closing”), First Merger Sub merged with and into Old PLAYSTUDIOS, with Old PLAYSTUDIOS surviving as a wholly owned subsidiary of Acies. Immediately following the First Merger, and as part of an integrated transaction with the First Merger, Old PLAYSTUDIOS merged with and into Second Merger Sub, with Second Merger Sub surviving as a wholly owned subsidiary of Acies. In connection with the Transactions, Acies changed its name to “PLAYSTUDIOS, Inc.” and Old PLAYSTUDIOS changed its name to “PLAYSTUDIOS US, LLC.”
4

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this Quarterly Report, about our future financial performance, strategy, expansion plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of management are forward-looking statements. Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “goal,” “project” or the negative of such terms or other similar expressions.
Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
our business strategy and market opportunity;
our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses (including changes in sales and marketing, research and development, and general and administrative expenses) and profitability;
market acceptance of our games;
our ability to raise financing in the future and the global credit and financial markets;
factors relating to our business, operations and financial performance and our subsidiaries, including:
changes in the competitive and regulated industries in which we operate, variations in operating performance across competitors and changes in laws and regulations affecting our business; and
our ability to implement business plans, forecasts and other expectations, and identify and realize additional opportunities;
our ability to maintain relationships with our platforms, such as the Apple App Store, Google Play Store, Amazon Appstore, and Facebook;
the accounting for our outstanding warrants to purchase shares of Class A common stock;
our ability to develop, maintain, and improve our internal control over financial reporting;
our ability to maintain, protect and enhance our intellectual property rights;
our ability to successfully defend litigation brought against us;
our ability to successfully close and integrate acquisitions to contribute to our growth objectives;
our success in retaining or recruiting, or changes required in, our officers, key employees or directors; and
the impact of COVID-19 (including existing and possible future variants as well as vaccinations) on our business.
These statements are based on our current plans, estimates and projections in light of information currently available to us, and are subject to known and unknown risks, uncertainties and assumptions about us, including those described under the heading “Risk Factors” in this Quarterly Report, and in other filings that we make with the Securities and Exchange Commission (the “SEC”) from time to time, that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In addition, the risks described under the heading “Risk Factors” are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are also not guarantees of performance. You should not put undue reliance on any forward-looking statements, which speak only as of the date hereof. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report whether as a result of new information, future events or otherwise.

5

TABLE OF CONTENTS
We intend to announce material information to the public through our Investor Relations website, ir.playstudios.com, SEC filings, press releases, public conference calls and public webcasts. We use these channels, as well as social media, to communicate with our investors, customers, and the public about our company, our offerings, and other issues. It is possible that the information we post on our website or social media could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above, including our website and the social media channels listed on our investor relations website, and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
6

TABLE OF CONTENTS

Item 1. Financial Statements
PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except par value amounts)
June 30,
2021
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents$229,901 $48,927 
Receivables25,655 16,616 
Prepaid expenses3,156 2,429 
Income tax receivable10,454 6,959 
Other current assets483 2,854 
Total current assets269,649 77,785 
Property and equipment, net5,254 6,201 
Internal-use software, net42,358 38,756 
Goodwill5,059 5,059 
Intangibles, net1,400 1,624 
Deferred income taxes5,759 3,109 
Other long-term assets4,696 1,927 
Total non-current assets64,526 56,676 
Total assets$334,175 $134,461 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable8,662 4,717 
Warrant liabilities20,344 — 
Accrued liabilities14,651 29,089 
Total current liabilities43,657 33,806 
Minimum guarantee liability200 300 
Deferred income taxes2,556 2,970 
Other long-term liabilities1,739 1,306 
Total non-current liabilities4,495 4,576 
Total liabilities$48,152 $38,382 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value (100,000 shares authorized, 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020)
— — 
Class A common stock, $0.0001 par value (2,000,000 shares authorized, 109,623 and 74,422 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)
11 
Class B common stock, $0.0001 par value (25,000 shares authorized, 16,130 and 18,977 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively).
Additional paid-in capital262,931 71,786 
Retained earnings22,685 23,802 
Accumulated other comprehensive income394 481 
Total stockholders’ equity286,023 96,079 
Total liabilities and stockholders’ equity$334,175 $134,461 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

TABLE OF CONTENTS
PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net revenues$70,822 $77,870 $144,919 $136,172 
Operating expenses:
Cost of revenue(1)
23,032 26,625 47,520 46,359 
Selling and marketing24,187 14,228 41,187 26,154 
Research and development17,296 11,647 32,042 21,130 
General and administrative12,398 3,811 16,677 9,521 
Depreciation and amortization6,898 5,440 12,932 10,828 
Total operating costs and expenses83,811 61,751 150,358 113,992 
Income (loss) from operations(12,989)16,119 (5,439)22,180 
Other income (expense), net:
Change in fair value of warrant liabilities110 — 110 — 
Interest income (expense), net(107)(41)(149)13 
Other income (expense), net113 203 (129)15 
Total other income (expense), net116 162 (168)28 
Income (loss) before income taxes(12,873)16,281 (5,607)22,208 
Income tax benefit (expense)5,838 (3,322)4,490 (3,757)
Net income (loss)$(7,035)$12,959 $(1,117)$18,451 
Net income (loss) per share attributable to Class A and Class B common stockholders:
Basic$(0.07)$0.14 $(0.01)$0.20 
Diluted$(0.07)$0.13 $(0.01)$0.18 
Weighted average shares of common stock outstanding:
Basic99,297 93,071 97,251 93,023 
Diluted99,297 101,560 97,251 100,277 
(1)Amounts exclude depreciation and amortization.
The accompanying notes are an integral part of these condensed consolidated financial statements. 

8

TABLE OF CONTENTS
PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in thousands)
Three Months Ended June 30,Six Months Ended
June 30,
2021202020212020
Net income (loss)$(7,035)$12,959 $(1,117)$18,451 
Other comprehensive income (loss):
Change in foreign currency translation adjustment(1)
209 306 (87)251 
Total other comprehensive income (loss)209 306 (87)251 
Comprehensive income (loss)$(6,826)$13,265 $(1,204)$18,702 
(1)These amounts are presented gross of the effect of income taxes. The total change in foreign currency translation adjustment and the corresponding effect of income taxes are immaterial.
The accompanying notes are an integral part of these condensed consolidated financial statements.
9

TABLE OF CONTENTS
PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited, in thousands)
Preferred StockCommon StockClass A Common StockClass B Common StockAdditional
Paid-In
Capital
Accumulated Other Comprehensive IncomeTotal
Stockholders'
Equity
SharesAmountSharesAmountSharesAmountSharesAmountRetained
Earnings
Balance as of March 31, 2020162,596 $225,936 $11 — $— — $— $67,469 $43 $19,027 $86,558 
Retroactive application of reverse recapitalization(162,596)(8)(225,936)(11)72,975 18,977 — — — 
Adjusted balance as of March 31, 2020— $— — $— 72,975 $18,977 $$67,478 $43 $19,027 86,558 
Net income— — — — — — — — — — 12,959 12,959 
Exercise of stock options— — — — 131 — — — 123 — — 123 
Stock-based compensation expense— — — — — — — — 871 — — 871 
Repurchase and retirement of common stock— — — — (6)— — — — — (25)(25)
Other comprehensive income— — — — — — — — — 306 — 306 
Balance as of June 30, 2020— $— — $— 73,100 $18,977 $$68,472 $349 $31,961 $100,792 
Preferred StockCommon StockClass A Common StockClass B Common StockAdditional
Paid-In
Capital
Accumulated Other Comprehensive IncomeTotal
Stockholders'
Equity
SharesAmountSharesAmountSharesAmountSharesAmountRetained
Earnings
Balance as of March 31, 2021162,596 $241,347 $12 — $— — $— $73,693 $185 $29,720 $103,618 
Retroactive application of reverse recapitalization(162,596)(8)(241,347)(12)75,158 18,977 10 — — — 
Adjusted balance as of March 31, 2021— $— — $— 75,158 $18,977 $$73,703 $185 $29,720 103,618 
Net loss— — — — — — — — — — (7,035)(7,035)
Business Combination and PIPE Financing— — — — 32,968 (2,847)— 185,997 — — 186,000 
Exercise of stock options— — — — 1,497 — — — 1,091 — — 1,091 
Stock-based compensation expense— — — — — — — — 2,140 — — 2,140 
Other comprehensive income— — — — — — — — — 209 — 209 
Balance as of June 30, 2021— $— — $— 109,623 $11 16,130 $$262,931 $394 $22,685 $286,023 

10

TABLE OF CONTENTS
PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited, in thousands)
Preferred StockCommon StockClass A Common StockClass B Common StockAdditional
Paid-In
Capital
Accumulated Other Comprehensive IncomeTotal
Stockholders'
Equity
SharesAmountSharesAmountSharesAmountSharesAmountRetained
Earnings
Balance as of December 31, 2019162,596 $225,490 $11 — $— — $— $66,661 $98 $13,535 80,313 
Retroactive application of reverse recapitalization(162,596)(8)(225,490)(11)72,871 18,977 — — — 
Adjusted balance as of December 31, 2019— $— — $— 72,871 $18,977 $$66,670 $98 $13,535 80,313 
Net income— — — — — — — — — — 18,451 18,451 
Exercise of stock options— — — — 235 — — — 144 — — 144 
Stock-based compensation expense— — — — — — — — 1,658 — — 1,658 
Repurchase and retirement of common stock— — — — (6)— — — — — (25)(25)
Other comprehensive income— — — — — — — — — 251 — 251 
Balance as of June 30, 2020— $— — $— 73,100 $18,977 $$68,472 $349 $31,961 $100,792 
Preferred StockCommon StockClass A Common StockClass B Common StockAdditional
Paid-In
Capital
Accumulated Other Comprehensive IncomeTotal
Stockholders'
Equity
SharesAmountSharesAmountSharesAmountSharesAmountRetained
Earnings
Balance as of December 31, 2020162,596 $238,186 $12 — $— — $— $71,776 $481 $23,802 96,079 
Retroactive application of reverse recapitalization(162,596)(8)(238,186)(12)74,422 18,977 10 — — — 
Adjusted balance as of December 31, 2020— $— — $— 74,422 $18,977 $$71,786 $481 $23,802 96,079 
Net loss— — — — — — — — — — (1,117)(1,117)
Business Combination and PIPE Financing— — — — 32,968 (2,847)— 185,997 — — 186,000 
Exercise of stock options— — — — 2,233 — — — 1,899 — — 1,899 
Stock-based compensation expense— — — — — — — — 3,249 — — 3,249 
Other comprehensive loss— — — — — — — — — (87)— (87)
Balance as of June 30, 2021— $— — $— 109,623 $11 16,130 $$262,931 $394 $22,685 $286,023 

The accompanying notes are an integral part of these condensed consolidated financial statements.
11

TABLE OF CONTENTS

PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Six Months Ended
June 30,
20212020
Cash flows from operating activities:
Net income (loss)$(1,117)$18,451 
Adjustments:
Depreciation and amortization12,932 10,828 
Amortization of loan costs196 — 
Stock-based compensation expense2,929 1,355 
Change in fair value of warrant liabilities(110)— 
Deferred income tax expense(2,290)(68)
Other131 32 
Changes in operating assets and liabilities
Receivables(9,270)(10,856)
Prepaid expenses and other current assets5,189 146 
Income tax receivable(3,495)— 
Accounts payable & accrued liabilities9,836 5,611 
Other206 (743)
Net cash provided by operating activities15,137 24,756 
Cash flows from investing activities:
Purchase of property and equipment(491)(789)
Additions to internal-use software(13,153)(11,732)
Additions to notes receivable(7,533)— 
Net cash used in investing activities(22,673)(12,521)
Cash flows from financing activities:
Proceeds from stock option exercises1,899 144 
Net proceeds from Business Combination185,722 — 
Other(406)(25)
Net cash provided by financing activities187,215 119 
Foreign currency translation(201)44 
Net change in cash and cash equivalents180,974 12,398 
Cash and cash equivalents at beginning of period48,927 31,022 
Cash and cash equivalents at end of period$229,901 $43,420 
Supplemental cash flow disclosures:
Interest paid$53 $— 
Income taxes paid, net of refunds465 904 
Non-cash investing and financing activities:
Capitalization of stock-based compensation$320 $302 
Reduction of notes receivable in exchange for internal-use software1,495 — 
Settlement of MGM Profit Share liability through the issuance of shares of Class A common stock20,000 — 
The accompanying notes are an integral part of these condensed consolidated financial statements.
12

TABLE OF CONTENTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in thousands, unless otherwise noted)
NOTE 1—BACKGROUND AND BASIS OF PRESENTATION
Organization and Description of Business
PLAYSTUDIOS, Inc., formerly known as Acies Acquisition Corp. (the "Company” or "PLAYSTUDIOS"), was incorporated on August 14, 2020 as a Cayman Islands exempted company, and domesticated into a Delaware corporation on June 21, 2021 (the "Domestication"). The Company's legal name became PLAYSTUDIOS, Inc. following the closing of the business combination discussed in Note 3. The prior period financial information represents the financial results and conditions of Old PLAYSTUDIOS (as defined in Note 3).
The Company develops and operates online and mobile social gaming applications (“games” or “game”) and leverages marketing relationships with various partners to provide players a unique social gaming experience while earning “real world” rewards provided by the Company’s rewards partners. The Company’s games are free-to-play and available via the Apple App Store, Google Play Store, Amazon Appstore, and Facebook (collectively, “platforms” or “platform operators”). The Company creates games based on its own original content as well as third-party licensed brands. The Company generates revenue through the in-game sale of virtual currency and through advertising.
Unless the context indicates otherwise, all references herein to “PLAYSTUDIOS” the “Company,” “we,” “us,” and “our” are used to refer collectively to PLAYSTUDIOS, Inc. and its subsidiaries.
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of PLAYSTUDIOS, Inc. and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Certain reclassifications in these financial statements have been made to comply with US GAAP applicable to public companies and SEC Regulation S-X.
In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position as of June 30, 2021, and its results of operations for the three and six months ended June 30, 2021, and 2020, and cash flows for the six months ended June 30, 2021, and 2020. The Consolidated Balance Sheets as of December 31, 2020 was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and notes thereto. Significant estimates and assumptions reflected in the Company’s condensed consolidated financial statements include the estimated consumption rate of virtual goods that is used in the determination of revenue recognition, useful lives of property and equipment and definite-lived intangible assets, the expensing and capitalization of research and development costs for internal-use software, assumptions used in accounting for income taxes, stock-based compensation, the associated valuation of the Company’s common stock and the evaluation of goodwill and long-lived assets for impairment. The Company believes the accounting estimates are appropriate and reasonably determined. Due to the inherent uncertainties in making these estimates, actual amounts could differ materially.
Segments
Operating segments are defined as components of an entity for which discrete financial information is available, and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The CODM, the Company’s Chief Executive Officer, reviews financial information on a consolidated basis for purposes of evaluating performance and allocating resources. As such, the Company has one operating and reportable segment.
Emerging Growth Company
At June 30, 2021, the Company qualified as an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and the Company has taken and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
13

TABLE OF CONTENTS
statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has opted to take advantage of such extended transition period available to emerging growth companies which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard. The Company expects to lose its emerging growth company status on December 31, 2021. As a result, the Company will adopt all accounting pronouncements currently deferred based on private company standards for purposes of the Quarterly Form on 10-Q for the first quarter of 2022.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Warrant Liabilities
The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are liability classified, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) or derivatives or contain features that qualify as embedded derivatives pursuant to ASC Topic 815, Derivatives and Hedging (“ASC 815”). The classification of instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Issuance costs incurred with the Business Combination that are attributable to liability classified warrants are expensed as incurred.
Share-Based Compensation
The Company measures compensation expense for all share-based awards at fair value on the date of grant and recognizes compensation expense over the service period on a straight-line basis for awards expected to vest.
The Company uses the Black-Scholes-Merton option-pricing model to determine the fair value for option awards. In valuing our option awards, the Company makes assumptions about risk-free interest rates, dividend yields, volatility and weighted-average expected lives. The Company accounts for forfeitures as they occur. Risk-free interest rates are derived from United States Treasury securities as of the option award grant date. Expected dividend yield is based on our historical cash dividend payments, which have been zero to date. The expected volatility for shares of the Company's Class A common stock is estimated using our historical volatility. The weighted-average expected life of the option awards is estimated based on our historical exercise data.
The Company's dual class structure was created upon the Domestication (as defined in Note 3). The Class B common stock including Class B common stock underlying vested stock options, held by Mr. Andrew Pascal, the Company's Chairman and Chief Executive Officer, or his affiliates (the "Founder Group") carry a super vote premium. As the Founder Group did not have control of Old PLAYSTUDIOS prior to the Business Combination, and Mr. Pascal is an employee of the Company, the incremental value resulting from the super vote premium is accounted for as incremental compensation costs.
The Company utilized the market approach by observing other market participants with (i) dual class structures, (ii) super vote premiums for a single class and (iii) both classes trading on a national exchange. Based on the observed data, management selected a premium for the Class B common stock and the stock options held by members of the Founder Group.
Recently Issued Accounting Pronouncements Not Yet Adopted
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities in the Consolidated Balance Sheets and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of the Company’s operating leases, where the Company is the lessee, to be recognized in the Company’s Consolidated Balance Sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This guidance is effective for the Company for fiscal years beginning after December 15, 2021 and interim periods within that annual reporting period, with earlier adoption permitted. The Company is currently evaluating the impact of adopting this guidance.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The new guidance replaces the incurred loss impairment methodology in current guidance with a current expected credit loss model (“CECL”) that incorporates a broader range of reasonable and supportable information including the forward-looking information. This guidance is effective for the Company for fiscal year beginning after December 15, 2021, including interim periods within that annual reporting period, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of adopting this guidance.
14

TABLE OF CONTENTS
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. It also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. This guidance is effective for the Company for fiscal years beginning after December 15, 2021 and interim periods within that annual reporting period, with early adoption permitted with simultaneous adoption of all provisions of the new standard. The Company is currently evaluating the impact of adopting this guidance.
Recently Adopted Accounting Pronouncements
In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new amendment, the Company is required to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The guidance is effective for the Company for fiscal year beginning after December 15, 2022, with early adoption permitted. The Company early adopted this guidance prospectively on January 1, 2021, and it did not have any impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation costs Incurred in a Cloud Computing Arrangement that is a Service Contract, that requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in ASC Topic 350, Intangibles—Goodwill and Other. This guidance is effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. The Company early adopted this guidance prospectively on January 1, 2020, and it did not have a material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This temporary guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. ASU 2020-04 is effective as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 and may be applied prospectively through December 31, 2022. The Company adopted this guidance prospectively on January 1, 2021, and it did not have any impact on the Company’s consolidated financial statements.
NOTE 3—BUSINESS COMBINATION
Business Combination
On June 21, 2021 (the “Closing Date”), Acies Acquisition Corp., a Cayman Islands exempted company (prior to the Closing Date, “Acies”), consummated the previously announced business combination (“Business Combination”) with PlayStudios, Inc., a Delaware corporation (“Old PLAYSTUDIOS”) pursuant to the Agreement and Plan of Merger, dated as of February 1, 2021 (the “Merger Agreement”), by and among Acies, Catalyst Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Acies (“First Merger Sub”), Catalyst Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Acies (“Second Merger Sub”), and Old PLAYSTUDIOS.
In connection with the closing of the Business Combination, Acies filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation (the “Certificate of Incorporation”) and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Acies was domesticated and continues as a Delaware corporation, changing its name to PLAYSTUDIOS, Inc. (the “Domestication”). As a consequence of filing the Certificate of Incorporation, the Company adopted a dual class structure, comprised of the Company’s Class A common stock, which is entitled to one vote per share, and the Company’s Class B common stock, which is entitled to 20 votes per share. See Note 16 for further discussion on the dual class structure.
As a result of and upon the effective time of the Domestication, among other things, (1) each of the then-issued and outstanding Class A ordinary shares, par value $0.0001 per share, of Acies (the “Acies Class A ordinary shares”), automatically converted, on a one-for-one basis, into a share of the Class A common stock, par value $0.0001 per share, of the Company (the “Class A common stock”); (2) each then-issued and outstanding redeemable warrant of Acies automatically converted into a redeemable warrant (the "Warrants") to acquire one share of Class A common stock; and (3) each of the then-issued and outstanding units of Acies that had not been previously separated into the underlying Acies Class A ordinary shares and underlying Acies warrants upon the request of the holder thereof were cancelled and entitled the holder thereof to one share of Class A common stock and one-third of one Warrant. Any fractional Warrants for any holder of units were rounded down and canceled for no consideration.
15

TABLE OF CONTENTS
Following the Domestication, the following transactions (the “Transactions”) occurred:
First Merger Sub merged with and into Old PLAYSTUDIOS, with Old PLAYSTUDIOS surviving as a wholly owned subsidiary of Acies (the “First Merger”);
immediately following the First Merger, and as part of an integrated transaction with the First Merger, Old PLAYSTUDIOS merged with and into Second Merger Sub, with Second Merger Sub surviving as a wholly owned subsidiary of Acies (the “Second Merger” and, together with the First Merger, the “Mergers”);
as a result of the Mergers, among other things, each outstanding share of common stock of Old PLAYSTUDIOS (“PlayStudios Common Stock”) and each outstanding share of preferred stock of Old PLAYSTUDIOS (“PlayStudios Preferred Stock”) and, together with the "PlayStudios Common Stock," the "Old PLAYSTUDIOS Stock" as of the effective time of the First Merger (the “Effective Time”) were cancelled in exchange for the following:
if the holder of such share made an election to receive cash, 0.233 in cash per share of Old PLAYSTUDIOS Stock subject to such cash election, provided that no holder could elect to receive cash for more than 15% of such holder's shares of Old PLAYSTUDIOS Stock;
if the holder of such share did not make a cash election, as of the Effective Time, the capital stock held by the holder was automatically canceled and converted into the right to receive 0.233 shares of the Company's common stock (the "Exchange Ratio"), rounded down to the nearest whole number of shares;
as a result of the Mergers, each outstanding share of PlayStudios Common Stock and PlayStudios Preferred Stock issued and outstanding immediately prior to the Effective Time as well as any outstanding unexercised vested options to purchase shares of PlayStudios Common Stock received the contingent right to receive the applicable Earnout Pro Rata Portion (as defined in the Merger Agreement) of an aggregate of 15.0 million additional shares of Class A common stock (the “Earnout Shares”), which right shall be contingent upon the closing price of the Class A common stock exceeding $12.50 and $15.00 per share, respectively, for any 20 trading days within any 30-trading day period commencing on or after November 18, 2021 and ending no later than the June 21, 2026 (the Earnout Shares will also vest based on the price targets in connection with a sale of the Company) (each of the foregoing vesting events, an “Earnout Triggering Event”); and
as a result of the Mergers, each outstanding and unexercised option to purchase PlayStudios Common Stock, whether or not vested or exercisable, converted into an option to purchase a share of Class A common stock or Class B common stock, except for any such option that is held by any member of the Founder Group, which will be converted into an option to purchase a share of Class B common stock, in each case with the same terms except for the number of shares exercisable thereunder and the exercise price, each of which were adjusted using the Exchange Ratio.
In connection with the Business Combination, Acies entered into subscription agreements with certain investors ("PIPE Investors"), whereby it issued 25.0 million shares of Class A common stock at $10.00 per share (the "PIPE Shares") for an aggregate purchase price of $250.0 million (the "PIPE Financing"), which closed simultaneously with the consummation of the Business Combination. $20.0 million of the PIPE Financing was used to terminate the profit share provision of an agreement with MGM Resorts International, one of the PIPE Investors.
The following table summarizes the total number of shares of common stock outstanding immediately following the Closing.
Shares
Acies public stockholders(1)
10,191 
Sponsor(1)(2)
3,724 
PLAYSTUDIOS stockholders (excluding the Founder Group)(3)
70,708 
Founder Group(3)
16,130 
PIPE Investors25,000 
Common Stock125,753 
Class A common stock109,623 
Class B common stock16,130 
(1)Excludes the shares of Class A common stock underlying the Warrants, as the Warrants are not exercisable until October 27, 2021. Reflects the redemption of 11.3 million Acies Class A ordinary shares.
(2)Includes 0.9 million shares of Class A common stock, held by Acies Acquisition, LLC (the "Sponsor") that are subject to forfeiture if certain earnout conditions are not satisfied, as the shares are issued and outstanding as of the Closing of the Business Combination. The 0.9 million shares do not have voting rights until the Earnout Triggering Events have occurred.
16

TABLE OF CONTENTS
(3)Excludes the shares of Class A and Class B common stock underlying stock options and the Earnout Shares, as they do not represent legally outstanding shares of common stock at Closing.
In connection with the Business Combination, the Company incurred direct and incremental costs of $32.4 million related to the equity issuance, consisting primarily of investment banking and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds.
The Company incurred approximately $1.4 million of expenses primarily related to advisory, legal and accounting fees in conjunction with the Business Combination. Of this, $0.8 million and $1.2 million was recorded in general and administrative expenses on the consolidated statements of operations for the three and six months ended June 30, 2021, respectively.
The aggregate consideration for the Business Combination was approximately $1,041.0 million, payable in the form of the Company's Class A and Class B common stock and cash. The following table summarizes the merger consideration (in thousands, except per share information).
Consideration
Cash consideration$102,020 
Shares transferred at closing(1)
86,838 
Value per share$10.00 
Share consideration$868,380 
Total consideration$970,400 
Shares of common stock underlying vested options7,060 
Value per share$10.00 
70,600 
Aggregate consideration$1,041,000 
(1)Excludes shares of common stock underlying stock options that are vested but unexercised as of the closing date of the Business Combination. As the shares do not represent legally outstanding shares of common stock at closing, they are excluded from the total consideration amount.
The following table reconciles the elements of the Business Combination to the condensed consolidated statements of cash flows for the six months ended June 30, 2021:
Cash - Acies Trust and cash (net of redemptions)$101,962 
Cash - PIPE230,000 
Less: Cash consideration(102,020)
Less: Transaction costs(44,220)
Net Business Combination and PIPE Financing$185,722 
Reverse Recapitalization
The Business Combination was accounted for as a reverse recapitalization and Acies was treated as the “acquired” company for accounting purposes. The Business Combination was accounted as the equivalent of Old PLAYSTUDIOS issuing stock for the net assets of Acies, accompanied by a recapitalization. Accordingly, all historical financial information presented in these condensed consolidated interim financial statements represents the accounts of Old PLAYSTUDIOS “as if” Old PLAYSTUDIOS is the predecessor to the Company. The common stock and net income per share, prior to the Business Combination, have been adjusted to share amounts reflecting the Exchange Ratio.

NOTE 4—RELATED-PARTY TRANSACTIONS
The following table is a summary of balance sheet assets and liabilities from related parties:
June 30,
2021
December 31,
2020
Financial Statement Line Item
Marketing Agreement$1,000 $1,000 Intangibles, net
Marketing Agreement$— $20,000 Accrued liabilities
The Company did not have any revenues recognized from related parties during the three and six months ended June 30, 2021 and 2020.
17

TABLE OF CONTENTS
In connection with the Business Combination and in accordance with the Merger Agreement, during the three months ended June 30, 2021, the Company paid $2.5 million to myCause Charitable Foundation ("myCause"), a 501(c)(3) foundation established and administered by certain members of management of the Company.
The Company’s remaining expenses recognized from related parties were immaterial during the three and six months ended June 30, 2021 and 2020.
MGM Resorts International (“MGM”)
MGM is a stockholder and an MGM senior executive also serves on the Company’s Board of Directors. MGM owns approximately 16.6 million and 14.6 million shares of the Company's outstanding Class A common stock as of June 30, 2021 and December 31, 2020, respectively.
Marketing Agreement
In April 2011, the Company entered into a joint marketing agreement with MGM (as amended, the “Marketing Agreement”) in exchange for assistance with marketing campaigns and the exclusive right to utilize MGM’s licensed marks and licensed copyrights for the development of certain of the Company’s social casino games. The initial term was for one year from the go-live date of the first such game in July 2012, with an automatic renewal provision for successive two-year terms based on the games meeting certain performance criteria. If the games do not achieve the specified performance criteria, the term will be automatically renewed for a one-year period and the right to utilize MGM’s licensed marks and copyrights will become non-exclusive. The non-exclusive term will be automatically renewed for successive one-year periods so long as the games meet certain other performance criteria. As consideration for the use of MGM’s intellectual property, the Company issued 19.2 million shares of its common stock representing 10% of its then-outstanding common stock; and in lieu of royalty payments, the Company agreed to pay MGM a profit share of: (i) during the exclusive term, a mid- to high-single digit percentage of cumulative net operating income, as defined in the Marketing Agreement, and (ii) during the non-exclusive term, a low- to mid-single digit percentage of cumulative net operating income. As further described in Note 9, the Marketing Agreement was recorded as an indefinite-lived intangible asset.
On October 30, 2020, the Company and MGM agreed to amend the Marketing Agreement (the “MGM Amendment”), under which the Company and MGM agreed to terminate the profit share provision. In exchange, the Company agreed to remit to MGM a one-time payment of $20.0 million, payable on the earliest to occur of (i) the PIPE Investment, (ii) the date that the Company waives MGM’s commitment to participate in the PIPE Investment, or (iii) two years from the date of the MGM Amendment. In addition, MGM agreed to reinvest in the Company at a minimum amount of $20.0 million by participating in the PIPE Investment or a private placement of equity offering to third party investors for a minimum gross proceeds to the Company of $50.0 million. As a result of the termination, the Company is no longer obligated to make profit share payments, but the other rights and obligations under the Marketing Agreement continue in full force and effect. The Company recorded none and $0.3 million as profit share expense during the three months ended June 30, 2021 and 2020, respectively, and recorded none and $0.3 million as profit share expense during the six months ended June 30, 2021 and 2020, respectively.
On June 21, 2021 the Company consummated the previously announced Business Combination and MGM participated in the PIPE Investment. In connection with the PIPE Investment, the Company recorded an equity contribution from MGM as a settlement of the $20.0 million liability. As of June 30, 2021, the $20.0 million liability was settled in full and no amount remained outstanding.

NOTE 5—RECEIVABLES
Receivables consist of the following:
June 30,
2021
December 31,
2020
Trade receivables$23,293 $16,616 
Notes receivables2,320 — 
Other receivables42 — 
Total receivables$25,655 $16,616 
Trade receivables represent amounts due to the Company from social and mobile platform operators, including Apple, Google, Amazon and Facebook. Trade receivables are recorded when the right to consideration becomes unconditional. No allowance for doubtful accounts was considered necessary as of June 30, 2021 and December 31, 2020.
Concentration of Credit Risk
As of June 30, 2021, Apple, Inc. and Google, Inc. accounted for 57.8 and 26.3% of the Company’s total receivables, respectively, while as of December 31, 2020, Apple, Inc. and Google, Inc. accounted for 48.9% and 42.7% of the Company’s total receivables, respectively. As of June 30, 2021 and December 31, 2020, the Company did not have any additional counterparties that exceeded 10% of the Company’s net accounts receivable.
18

TABLE OF CONTENTS
As of June 30, 2021, 93.5% of the Company’s total notes receivables were concentrated in amounts due from game developers. Each of the counterparties within the concentrated group are engaged in game development services as their primary form of business, subjecting the group to similar activities and economic risks. In the event that the group fails completely to perform according to the terms of the notes, and any collateral applicable proved to be of no value, the maximum amount of loss which the Company may incur is approximately $5.1 million, $3.0 million of which is reported within the Other long-term assets line item on the Condensed Consolidated Balance Sheets. Approximately 40.0% of the notes subject to risk are secured by certain intellectual property created, developed or acquired by the developers.
NOTE 6—FAIR VALUE MEASUREMENT
The carrying values of the Company’s cash and cash equivalents, trade receivables and accounts payable approximate fair value due to their short maturities.
The following tables present the financial assets not measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020:
June 30, 2021
Carrying ValueEstimated Fair ValueFair Value HierarchyFinancial Statement Line Item
Financial assets:
Notes receivable - current$2,320 $2,320 Level 3Receivables
Notes receivable - non-current3,091 3,091 Level 3Other long-term assets
Total financial assets$5,411 $5,411 
December 31, 2020
Carrying ValueEstimated Fair ValueFair Value HierarchyFinancial Statement Line Item
Financial assets:
Notes receivable - non-current$815 $815 Level 3Other long-term assets
Total financial assets$815 $815 
The notes receivable are fixed-rate investments, are not traded and do not have observable market inputs, therefore, the fair value is estimated to be equal to the carrying value.
The following table presents the liabilities measured at fair value on a recurring basis, by input level, in the Consolidated Balance Sheets at June 30, 2021:
June 30, 2021
Level 1Level 2Level 3Total
Financial liabilities:
Public Warrants$13,274 — — 13,274 
Private Warrants— 7,070 — 7,070 
Total financial liabilities$13,274 $7,070 $— $20,344 
The Company did not have any liabilities similar to those above requiring fair value measurement at December 31, 2020.

19

TABLE OF CONTENTS
NOTE 7—PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following:
June 30,
2021
December 31,
2020
Computer equipment$8,770 $8,328 
Leasehold improvements6,318 6,365 
Furniture and fixtures2,303 2,266 
Construction in progress89 90 
Total property and equipment17,480 17,049 
Less: accumulated depreciation(12,226)(10,848)
Total property and equipment, net$5,254 $6,201 
The aggregate depreciation expense for property and equipment, net is reflected in “Depreciation and amortization” in the Consolidated Statements of Operations. During the three months ended June 30, 2021 and 2020, depreciation expense was $0.7 million and $0.7 million, respectively, and during the six months ended June 30, 2021 and 2020, depreciation expense was $1.4 million and $1.4 million, respectively. No impairment charges or material write-offs were recorded for the three and six months ended June 30, 2021 and 2020.
Property and equipment, net by region consists of the following:
June 30,
2021
December 31,
2020
United States$1,657 $2,098 
EMEA(1)
3,136 3,436 
All other countries461 667 
Total property and equipment, net$5,254 $6,201 
(1)Europe, Middle East, and Africa (“EMEA”). Amounts primarily represent leasehold improvements of local office space and computer equipment.
NOTE 8—INTERNAL-USE SOFTWARE, NET
Internal-use software, net consists of the following:
June 30,
2021
December 31,
2020
Internal-use software$117,610 $103,041 
Less: accumulated amortization(75,252)(64,285)
Total internal-use software, net$42,358 $38,756 
The aggregate amortization expense for internal-use software, net is reflected in "Depreciation and amortization" in the Consolidated Statements of Operations. During the three months ended June 30, 2021 and 2020, the Company capitalized internal-use software development costs of $8.1 million and $6.1 million, respectively, and during the during the six months ended June 30, 2021 and 2020, the Company capitalized internal-use software development costs of $15.0 million and $12.0 million, respectively. Total amortization expense associated with its capitalized internal-use software development costs for the three months ended June 30, 2021 and 2020 was $6.1 million and $4.6 million, respectively, and for the six months ended June 30, 2021 and 2020 was $11.3 million and $8.9 million, respectively. There were no write-offs or impairment charges recorded for the three and six months ended June 30, 2021 and 2020.

NOTE 9—GOODWILL AND INTANGIBLE ASSETS
Goodwill
The Company had $5.1 million in goodwill as of June 30, 2021 and December 31, 2020. Other than the Business Combination and Reverse Recapitalization described in Note 1, there were no business combinations during the three and six months ended June 30, 2021 and 2020. There were no indicators of impairment as of June 30, 2021 and December 31, 2020.
20

TABLE OF CONTENTS
Intangible Assets
The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset other than goodwill:
June 30, 2021December 31, 2020
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Amortizable intangible assets:
Licenses$1,000 $(600)$400 $1,000 $(500)$500 
Trade names1,240 (1,240)— 1,240 (1,116)124 
2,240 (1,840)400 2,240 (1,616)624 
Nonamortizable intangible assets:
Marketing Agreement with a related party1,000 — 1,000 1,000 — 1,000 
Total intangible assets$3,240 $(1,840)$1,400 $3,240 $(1,616)$1,624 

Intangible assets consist of trade names and long-term license agreements with various third parties as described in Note 2 to the consolidated financial statements. As further described in Note 4 to the consolidated financial statements, the MGM Marketing Agreement is an indefinite-lived intangible asset, which gives us the exclusive rights to feature MGM’s intellectual property in the Company’s games subject to automatic renewal provisions described in Note 4. The weighted-average period remaining until the next renewal is 0.3 years as of June 30, 2021. The Company is reasonably certain that it will renew the Marketing Agreement.
The aggregate amortization expense for amortizable intangible assets is reflected in “Depreciation and amortization” in the Consolidated Statements of Operations. During the three months ended June 30, 2021 and 2020, amortization was $0.1 million and $0.1 million, respectively, and during the six months ended June 30, 2021 and 2020, amortization was $0.2 million and $0.5 million, respectively. There were no impairment charges for intangible assets for the three and six months ended June 30, 2021 and 2020.
As of June 30, 2021, the estimated annual amortization expense for the years ending December 31, 2021 through 2025 is as follows:
Year Ending December 31,Projected Amortization
Expense
Remaining 2021
$100 
2022200 
2023100 
2024— 
2025— 
Total$400 
NOTE 10—WARRANT LIABILITIES
Public Warrants and Private Warrants
Upon the closing of the Business Combination, there were here were approximately 7.2 million publicly-traded redeemable warrants to purchase shares of Class A common stock (the "Public Warrants") and 3.8 million redeemable warrants to purchase shares of Class A common stock initially issued to the Sponsor in a private placement (the "Private Warrants") were issued by Acies prior to the Business Combination. Each whole Warrant entitles the registered holder to purchase one whole share of the Company’s common stock at a price of $11.50 in cash per share, subject to adjustment as discussed below, starting on October 27, 2021, provided that the Company has an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to them is available. If the Company fails to maintain an effective registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the Warrants, the Company is required to allow the Warrants to be exercised on a "cashless basis" in accordance with the terms of the warrant agreement governing the Warrants (the "Warrant Agreement"). Pursuant to the Warrant Agreement, a holder of Warrants may exercise the Warrants only for a whole number of shares of Class A common stock. The Warrants will expire 5 years after the completion of the Business Combination, or earlier upon redemption or liquidation. The Private warrants are identical to the Public Warrants, except that the Private Warrants and the shares of Class A common stock issuable upon exercise of the Private Warrants were not transferable until after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are non-
21

TABLE OF CONTENTS
redeemable so long as they are held by the initial holder or any of its permitted transferees. If the Private Warrants are held by someone other than the initial holder or its permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Private Warrants may be exercised on a cashless basis so long as held by the Sponsor or certain permitted transferees.
The Company may redeem the outstanding Public Warrants in whole, but not in part, at a price of $0.01 per Public Warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20-trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the Warrant Holders. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. In no event will the Company be required to net cash settle the exercise of Warrants.
At June 30, 2021, there were approximately 7.2 million Public Warrants and 3.8 million Private Warrants outstanding. Refer to Note 6 – Fair Value Measurements for further information.

NOTE 11—ACCRUED LIABILITIES
Accrued liabilities consist of the following:
June 30,
2021
December 31,
2020
MGM profit share buyout$— $20,000 
Accrued payroll and vacation11,093 4,860 
Other accruals3,558 4,229 
Total accrued liabilities$14,651 $29,089 
MGM Profit Share Buyout
As further described in Note 4 to these condensed consolidated financial statements, in October 2020, the Company and MGM agreed to amend the Marketing Agreement to terminate the profit share provision. In exchange, the Company agreed to remit to MGM a one-time payment of $20.0 million, payable on the earliest to occur of (i) the PIPE Investment, (ii) the date that the Company waives MGM’s commitment to participate in the PIPE Investment, or (iii) two years from the date of the MGM Amendment. At the Closing of the Business Combination, the Company satisfied all obligations related to the MGM profit share buyout.
Accrued payroll and vacation
Accrued payroll and vacation includes a $5.0 million transaction bonus to employees per the terms of the Merger Agreement. This amount was subsequently paid in July 2021.
Other Accruals
Other accruals include various expenses for accrued accounts payable, deferred rent, accrued legal and accounting services, accrued royalties, accrued property and equipment, accrued advertising, and income taxes payable.
NOTE 12—REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following table summarizes the Company’s revenue disaggregated by type, and by over time or point in time recognition:
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
Virtual currency (over time)(1)
$69,746 $77,453 $142,972 $135,621 
Advertising (point in time)1,076 417 1,947 551 
Total net revenue$70,822 $77,870 $144,919 $136,172 
(1)Virtual currency is recognized over the estimated consumption period.
22

TABLE OF CONTENTS
The following table summarizes the Company’s revenue disaggregated by geography:
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
United States$61,670 $66,317 $125,743 $115,467 
All other countries9,152 11,553 19,176 20,705 
Total net revenue$70,822 $77,870 $144,919 $136,172 
Contract Balances
Contract assets represent the Company’s ability to bill customers for performance obligations completed under a contract. As of June 30, 2021 and December 31, 2020, there were no contract assets recorded in the Company’s consolidated balance sheet. The deferred revenue balance related to the purchase of virtual currency was immaterial as of June 30, 2021 and December 31, 2020. The opening and closing balance of trade receivables is further described in Note 5.

NOTE 13—LONG-TERM DEBT
Credit Agreement
On June 24, 2021, in connection with the Closing, the Company terminated and replaced the Revolver (as defined below). The Company, a subsidiary of the Company, JPMorgan Chase Bank, N.A., as administrative agent and JPMorgan Chase Bank, N.A., Silicon Valley Bank and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers entered into a credit agreement (the “Credit Agreement”) which provides for a five-year revolving credit facility in an aggregate principal amount of $75.0 million. Borrowings under the Credit Agreement may be borrowed, repaid and re-borrowed by the Company, and are available for working capital, general corporate purposes and permitted acquisitions.
Commitment fees and interest rates are determined on the basis of either a Eurodollar rate or an Alternate Base Rate plus an applicable margin. The applicable margins are initially 2.50%, in the case of Eurodollar loans, and 1.50%, in the case of Alternate Base Rate loans. The applicable margin is subject to adjustment based upon the Company's Total Net Leverage Ratio (as defined in the Credit Agreement). Eurodollar rates and the Alternate Base Rate are subject to floors of 0.00% and 1.00%, respectively. The Credit Agreement contains various affirmative and negative financial and operational covenants applicable to the Company and its subsidiaries.
The Credit Agreement includes customary reporting requirements, conditions precedent to borrowing and affirmative, negative and financial covenants. Specific financial covenants include the following:, commencing with the quarter ending September 30, 2021:
Maximum Net Leverage Ratio of 3.50:1.00 (subject to increase to 4.00:1.00 following consummation of certain material acquisitions)
Minimum Fixed Charge Coverage Ratio of 1.25:1.00.
At issuance, the Company capitalized $0.7 million in debt issuance costs. As of June 30, 2021 the Company has not made any drawdowns on the Credit Agreement.
Private Venture Growth Capital Loans
On March 27, 2020, the Company entered into an agreement for a revolving credit facility (the “Revolver”) with Silicon Valley Bank (“SVB”). The Revolver was secured by the assets including intellectual property of the Company and matures on September 27, 2022. Borrowings under the Revolver may be borrowed, repaid and re-borrowed by the Company, and are available for working capital, general corporate purposes and permitted acquisitions. Up to $3.0 million of the Revolver may be used for letters of credit. On June 24, 2021, in connection with the Closing, the Company terminated and replaced the Revolver as described above.
During the three and six months ended June 30, 2021 and in conjunction with the refinancing described above, the Company wrote off its remaining $0.1 million of debt issuance costs to "Interest income (expense), net" on the Consolidated Statements of Operations.
NOTE 14—INCOME TAXES
The Company recorded an income tax benefit of $5.8 million and income tax expense of $3.3 million for the three months ended June 30, 2021 and 2020, respectively, and the Company recorded an income tax benefit of $4.5 million and income tax expense of $3.8 million for the six months ended June 30, 2021 and 2020, respectively. The Company has historically calculated the income tax provision or benefit for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the
23

TABLE OF CONTENTS
full fiscal year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. For the period ended June 30, 2021, the Company determined that small changes in estimated "ordinary” income would result in significant changes in the estimated annual effective tax rate, and therefore, the Company used a discrete effective tax rate method to calculate the income tax provision or benefit for the six months ended June 30, 2021.
The Company has analyzed filing positions in all of the federal, state, and foreign jurisdictions where it is required to file income tax returns and for all open tax years. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. Although timing of the resolution and/or closure of audits is highly uncertain, the Company does not believe it is reasonably possible that its unrecognized tax benefits would materially change in the next 12 months. The Company’s policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense.

NOTE 15—COMMITMENTS AND CONTINGENCIES
Minimum Guarantee Liability
The following are the Company’s total minimum guaranteed obligations as of:
June 30,
2021
December 31,
2020
Accrued royalties(1)
$200 $100 
Minimum guarantee liability200 300 
Total minimum guarantee obligations$400 $400 
Weighted-average remaining term (in years)2.252.5
(1)Accrued royalties are included within the Accrued liabilities line item on the Consolidated Balance Sheets.
The following are the Company’s remaining expected future payments of minimum guarantee obligations as of June 30, 2021:
Year Ending December 31,Minimum Guarantee
Obligations
Remainder of 2021
$200 
2022200 
2023— 
2024— 
2025— 
Total$400 
Leases
The Company leases both office space and office equipment and classifies these leases as either operating or capital leases for accounting purposes based upon the terms and conditions of the individual lease agreements. As of June 30, 2021 and December 31, 2020, all leases were classified as operating leases and expire at various dates through 2024, with certain leases containing renewal option periods of two to five years at the end of the current lease terms.
The Company’s future minimum rental commitments as of June 30, 2021, are as follows:
Year Ending December 31,Minimum Rental
Commitments
Remaining 2021
$2,342 
20223,203 
20231,153 
2024429 
2025— 
Total$7,127 
Certain lease agreements have rent escalation provisions over the lives of the leases. The Company recognizes rental expense based on a straight-line basis over the term of the leases. Rental expense was $1.2 million and $1.1 million for the three months ended
24

TABLE OF CONTENTS
June 30, 2021 and 2020, respectively, and $2.4 million and $2.2 million for the six months ended June 30, 2021 and 2020, respectively, which is included within “General and administrative” expenses in the Consolidated Statements of Operations.
Other
The Company is party to ordinary and routine litigation incidental to its business. On a case-by-case basis, the Company engages inside and outside counsel to assess the probability of potential liability resulting from such litigation. After making such assessments, the Company makes an accrual for the estimated loss only when the loss is reasonably probable and an amount can be reasonably estimated. The Company does not expect the outcome of any pending litigation to have a material effect on the Company’s Consolidated Balance Sheets, Consolidated Statements of Operations, or Consolidated Statements of Cash Flows.
In May 2021, the Company became party to a litigation matter brought by TeamSava d.o.o. Beograd (“TeamSava”) and other related parties. The plaintiffs filed a Statement of Claim in May 2021 in Tel Aviv District Court in Israel, alleging claims, among other things, that the Company breached the terms of a commercial contract relating to services provided by TeamSava and related parties in connection with the sourcing and administrative management of personnel in Serbia who provided game development services exclusively for the Company. The pending litigation seeks damages of 27.3 million New Israeli Shekels ("NIS"). The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company’s range of possible loss could be up to 27.3 million NIS based on the claim amount of the litigation, but the Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.

NOTE 16—STOCKHOLDERS’ EQUITY
The condensed consolidated statements of stockholders’ equity reflect the reverse recapitalization as discussed in Note 3 as of June 21, 2021. As Old PLAYSTUDIOS was deemed the accounting acquirer in the reverse recapitalization with Acies, all periods prior to the consummation date reflect the balances and activity of Old PLAYSTUDIOS. The consolidated balances and the audited consolidated financial statements of Old PLAYSTUDIOS, as of December 31, 2020, and the share activity and per share amounts in these condensed consolidated statements of equity were retroactively adjusted, where applicable, using the recapitalization exchange ratio of 0.233 for Old PLAYSTUDIOS common stock. Old PLAYSTUDIOS Series A Preferred Stock, Old PLAYSTUDIOS Series B Preferred Stock, Old PLAYSTUDIOS Series C-1 Preferred Stock, Old PLAYSTUDIOS Series C Preferred Stock, and Old PLAYSTUDIOS Series B Preferred Stock were converted into shares of Old PLAYSTUDIOS common stock at a share conversion factor of 1.0 as a result of the reverse recapitalization. Old PLAYSTUDIOS warrants to purchase preferred stock were deemed exercised and the underlying shares converted based on the respective preferred stock conversion ratio. See Note 3 for further discussion.
Common Stock
As of June 30, 2021, the Company was authorized to issue 2.0 billion and 25.0 million shares of Class A and Class B common stock, respectively. The company had 109.6 million and 74.4 million shares of Class A common stock and 16.1 million and 19.0 million shares of Class B common stock issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.
Subject to the prior rights of the holders of any preferred stock, the holders of common stock are entitled to receive dividends out of the funds legally available at the times and in the amounts determined by the Company's Board of Directors. Each holder of Class A common stock is entitled to one vote for each share of Class A common stock held and each holder of Class B common stock is entitled to twenty votes for each share of Class B common stock held. After the full preferential amounts due to preferred stockholders have been paid or set aside, the remaining assets of the Company available for distribution to its stockholders, if any, are distributed to the holders of common stock ratably in proportion to the number of shares of common stock then held by each such holder. None of the Company’s common stock is entitled to preemptive rights and neither is subject to redemption. The Company’s common stock is not convertible into any other shares of the Company’s capital stock.
The shares of Class B common stock are subject to a “sunset” provision if any member of the Founder Group transfers shares of Class B common stock outside the Founder Group (except for certain permitted transfers). In the event of such non-permitted transfers, any share transferred will automatically convert into shares of Class A common stock. In addition, the outstanding shares of Class B common stock will be subject to a “sunset” provision by which all outstanding shares of Class B common stock will automatically convert into shares of Class A common stock (i) if holders representing a majority of the Class B common stock vote to convert the Class B common stock into Class A common stock, (ii) if the Founder Group and its permitted transferees collectively no longer beneficially own at least 20% of the number of shares of Class B common stock collectively held by the Founder Group as of the Effective Time, or (iii) on the nine-month anniversary of the Founder’s death or disability, unless such date is extended by a majority of independent directors.
25

TABLE OF CONTENTS
Accumulated Other Comprehensive Income
The following tables shows a summary of changes in accumulated other comprehensive income from December 31, 2019 to June 30, 2020 and December 31, 2020 to June 30, 2021:
Currency
Translation
Adjustment
Total Accumulated
Other Comprehensive
Income
Balance as of December 31, 2020$481 $481 
Foreign currency translation(87)(87)
Balance as of June 30, 2021$394 $394 

Currency
Translation
Adjustment
Total Accumulated
Other Comprehensive
Income
Balance as of December 31, 2019$98 $98 
Foreign currency translation251 251 
Balance as of June 30, 2020$349 $349 

NOTE 17—STOCK-BASED COMPENSATION
2011 and 2021 Equity Incentive Plans
Old PLAYSTUDIOS' 2011 Omnibus Stock and Incentive Plan (the “2011 Plan”) provides for the grant of incentive and non-statutory options, stock appreciation rights, restricted stock awards and restricted stock units to employees, directors and consultants of the Company, collectively referred to as “Awards.”
Each Old PLAYSTUDIOS stock option from the 2011 Plan that was outstanding immediately prior to the Mergers and held by current employees or service providers, whether vested of unvested, was converted into an option to purchase 0.233 shares of common stock (each such option, an “Exchanged Option”). Except as specifically provided in the Merger Agreement, following the Merger, each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Old PLAYSTUDIOS option immediately prior to the consummation of the Merger. All equity awards activity was retroactively restated to reflect the Exchanged Options.
On June 17, 2021, the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”). The aggregate number of shares of common stock reserved for future issuance under the 2021 Plan is 16.7 million. The number of shares of common stock available under the 2021 Plan will increase annually on the first day of each calendar year, beginning with the calendar year ending December 31, 2022, with such annual increase equal to the lesser of (i) 5% of the number of shares of common stock issued and outstanding on the last business day of the immediately preceding fiscal year and (ii) an amount determined by the Company's Board of Directors. The Company has not issued any awards under the 2021 Plan.
The 2021 Plan provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and other stock awards, and performance awards to employees, officers, non-employee directors and independent service providers of the Company. The 2021 Plan became effective immediately upon the closing of the Merger and replaces the 2011 Plan.
Stock-Based Compensation
In connection with the Domestication and the Closing of the Business Combination, the Founder Group beneficially owned 16.1 million shares of Class B common stock, resulting in 74.7% of voting power of the Company. In addition, on the Closing Date of the Business Combination, the Founder Group was the beneficial owner of 2.2 million fully vested options underlying shares of Class B common stock, which accounted for all of Mr. Pascal's outstanding options on the Closing Date of the Business Combination. As a result of the Business Combination, the Founder Group has a controlling interest in the Company. As the Founder Group did not have control of Old PLAYSTUDIOS immediately prior to the Business Combination, and as Mr. Pascal is an employee of the Company, the incremental value resulting from the super vote premium is accounted for as incremental compensation costs. During the three and six months ended June 30, 2021, the Company incurred $1.1 million of additional compensation expense related to the Founder Group's beneficial ownership interest in Class B common stock and the underlying vested options as of the Closing Date.
26

TABLE OF CONTENTS
The following table summarizes stock-based compensation expense that the Company recorded in income (loss) from operations for the periods shown:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Selling and marketing$14 $24 $32 $47 
General and administrative1,238 263 1,469 525 
Research and development777 444 1,428 783 
Stock-based compensation expense$2,029 $731 $2,929 $1,355 
Capitalized stock-based compensation$111 $141 $320 $302 
Stock Options
All of the options granted under the 2011 Plan have time-based vesting periods vesting over a period of three to four years and a maximum term of 10 years from the grant date.

Separate from the 2011 Plan, and in connection with the acquisition of our Israeli subsidiary, a limited number of employees have been granted performance-based stock options. The Company awarded 4.2 million performance-based stock options in 2017. These options had vesting that was tied to the achievement of defined performance and profitability metrics. The performance-based stock options have a weighted-average grant-date fair value of $0.56 per share. The performance-based stock options fully vested in 2018. During the year ended December 31, 2020, the majority of performance-based stock options were exercised, resulting in 0.1 million options outstanding as of June 30, 2021.
The following is a summary of stock option activity for time-based and performance-based options for the six months ended June 30, 2021 (in thousands, except weighted-average exercise price and remaining term):
No. of
Options
Weighted-Average
Exercise Price
Weighted-Average
Remaining Term (in Years)
Aggregate
Intrinsic Value
Outstanding - December 31, 202018,090 $0.85 
Granted128 7.85 
Exercised(2,233)0.86 
Forfeited(267)1.81 
Expired(22)1.45 
Outstanding - June 30, 202115,696 0.89 6.7$78,433 
Unvested - June 30, 20215,793 0.98 8.027,885 
Exercisable - June 30, 20219,903 0.84 6.050,548 
The following table presents the weighted-average assumptions used to estimate the fair value of the stock options granted in the Company’s consolidated financial statements:
Six Months Ended
June 30,
20212020
Expected term (in years)5.865.96
Expected volatility51.24%55.41%
Risk-free interest rate range
0.54% – 0.60%
0.41% – 0.51%
Dividend yield0%0%
Grant-date fair value$0.52$0.33
As of June 30, 2021, there was approximately $8.3 million of total unrecognized compensation expense related to stock options to employees. As of June 30, 2021, this cost is expected to be recognized over a remaining average period of 2.1 years. The total intrinsic value of stock options exercised under the provisions of the 2011 Plan during the three months ended June 30, 2021 and 2020, was $16.1 million and $0.2 million, respectively, and during the six months ended June 30, 2021 and 2020 was $21.9 million and $0.2 million, respectively.
27

TABLE OF CONTENTS

NOTE 18—NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is computed by dividing net income (loss) attributable to Class A and Class B common stockholders by the weighted-average number of shares of each respective class of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to Class A and Class B common stockholders by the weighted-average number of each respective class of common stock outstanding, including the potential dilutive securities. For the calculation of diluted net income (loss) per share, net income (loss) attributable to Class A and Class B common stockholders is adjusted to reflect the potential effect of dilutive securities.
As result of the reverse recapitalization, the Company has retroactively adjusted the weighted average shares outstanding prior to the Business Combination to give effect to the Exchange Ratio used to determine the number of shares of common stock into which they were converted.
The following table sets forth the computation of basic and diluted net income (loss) attributable to Class A and Class B common stockholders per share (in thousands except per share data):

Three Months Ended June 30, 2021Three Months Ended June 30, 2020
Class AClass BClass AClass B
Numerator
Net income (loss) attributable to common stockholders – basic$(5,893)$(1,142)$10,317 $2,642 
Potential dilutive effect of stock options— — 55 (55)
Net income (loss) attributable to common stockholders – diluted$(5,893)$(1,142)$10,372 $2,587 
Denominator
Weighted average shares of common stock outstanding - basic83,167 16,130 74,094 18,977 
Potential dilutive effect of stock options— — 7,188 1,301 
Weighted average shares of common stock outstanding - diluted83,167 16,130 81,282 20,278 
Net income (loss) attributable to common stockholders per share
Basic$(0.07)$(0.07)$0.14 $0.14 
Diluted$(0.07)$(0.07)$0.13 $0.13 
28

TABLE OF CONTENTS
Six Months Ended June 30, 2021Six Months Ended June 30, 2020
Class AClass BClass AClass B
Numerator
Net income (loss) attributable to common stockholders – basic$(932)$(185)$14,687 $3,764 
Potential dilutive effect of stock options— — 57 (57)
Net income (loss) attributable to common stockholders – diluted$(932)$(185)$14,744 $3,707 
Denominator
Weighted average shares of common stock outstanding - basic81,121 16,130 74,046 18,977 
Potential dilutive effect of stock options— — 6,083 1,171 
Weighted average shares of common stock outstanding - dilutive81,121 16,130 80,129 20,148 
Net income (loss) attributable to common stockholders per share
Basic$(0.01)$(0.01)$0.20 $0.20 
Diluted$(0.01)$(0.01)$0.18 $0.18 

For the periods presented above, the net income (loss) per share amounts are the same for Class A and Class B common stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Certificate of Incorporation. The undistributed earnings (losses) for each period are allocated based on the contractual participation rights of the Class A and Class B common stock as if the earnings (losses) for the period had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings (losses) are allocated on a proportionate basis.
The following equity awards outstanding at the end of each period presented have been excluded from the computation of diluted net income (loss) per share of common stock for the periods presented due to their anti-dilutive effect:
Three Months Ended June 30,Six Months Ended June 30, 2021
2021202020212020
Stock options15,696 587 15,696 2,630 
Public Warrants7,175 — 7,175 — 
Private Warrants3,821 — 3,821 — 
Earnout Shares15,000 — 15,000 — 
41,692 587 41,692 2,630 

NOTE 19—EMPLOYEE BENEFIT PLAN
The Company offers a 401(k) retirement savings plan to eligible employees. Employee contributions are voluntary and made on a pretax basis subject to Internal Revenue Service limitations. The Company does not match any of the contributions made by its employees.
29

TABLE OF CONTENTS
Items 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto for the three months ended March 31, 2021 and the year ended December 31, 2020 contained in the Current Report on Form 8-K filed with the SEC on June 25, 2021. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, and “the Company” are intended to mean the business and operations of PLAYSTUDIOS, Inc. and its consolidated subsidiaries.
Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a discrepancy include, but are not limited to, those discussed elsewhere in this report, particularly in the section titled “Risk Factors” set forth in Part II, Item 1A of this report. All forward-looking statements in this report are based on information available to us as of the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.
Overview
We are a developer and publisher of free-to-play casual games for mobile and social platforms that are powered by differentiated playAWARDS and myVIP loyalty platforms. We have developed some of the most innovative and successful free-to-play social casino games in the world, including the award-winning POP! Slots, myVEGAS Slots, my KONAMI Slots, myVEGAS Blackjack and myVEGAS Bingo. Our games are based on original content, real-world slot game content, as well as third-party licensed brands and are downloadable and playable for free on multiple social and mobile-based platforms, including the Apple App Store, Google Play Store, Amazon Appstore and Facebook.
Each of our games is powered by our proprietary playAWARDS program and incorporates loyalty points that are earned by players as they engage with our games. These loyalty points can be exchanged for real-world rewards from over 80 awards partners representing more than 275 hospitality, entertainment, and leisure brands across 17 countries and four continents. The rewards are provided by our collection of awards partners, all of whom provide their rewards from their collection of consumer brands at no cost to us as part of their overall marketing. We have developed a robust suite of tools for our playAWARDS platform that enable our awards partners to manage their rewards in real time, measure the value of our players’ engagement, and gain insight into the effectiveness and return on investment through the playAWARDS program. Through our self-service platform, awards partners can launch new offers, make changes to existing offers, and in real time see how players are engaging with their brands. The platform tools also provide awards partners the ability to measure the retail value of the rewards being redeemed by our players and estimate the additional benefits they are receiving from the patronage of our players at their establishments.
Supplemental to PLAYSTUDIOS' playAWARDS program is its myVIP program. The myVIP program is a player development and hosting program that ranks and assigns tiers to players based on the number of tier points earned by engaging with our games. The tier points earned in the myVIP program are separate from and are not interchangeable with the loyalty points earned in the playAWARDS program. Qualified players are provided access to enhanced customer benefits that increase with each tier. Higher tiers provide access to a VIP player portal whereby players can view and purchase special chip bundles, redeem loyalty points for a curated set of rewards, and communicate directly with a dedicated live host. The VIP player portal and concierge/ host program enhance the in-game and reward redemption experience with both in-game and in-person, invitation-only special events. We believe that the myVIP program drives increased player engagement and retention, and therefore extends each game's life-cycle and monetization opportunity.
We have primarily generated our revenue from the sale of virtual currency, which players can choose to purchase at any time to enhance their playing experience. Once purchased, our virtual currency cannot be withdrawn from the game, transferred from one game to another or from one player to another, or be redeemed for monetary value. Players who install our games receive free virtual currency upon the initial launch of the game, and they may also collect virtual currency free of charge at periodic intervals or through targeted marketing promotions. Players may exhaust the free virtual currency and may choose to purchase additional virtual currency. Additionally, players can send free “gifts” of virtual currency to their friends on Facebook. Our revenue from virtual currency has been generated worldwide, but is largely concentrated in North America.
We also generate revenue from in-game advertising. Advertisements can be in the form of an impression, click-throughs, banner ads or offers, where players are rewarded with virtual currency or loyalty points for watching a short video.
Impact of COVID-19
The ongoing COVID-19 pandemic and resulting social distancing, shelter-in-place, quarantine and similar governmental orders put in place around the world have caused widespread disruption in global economies, productivity and financial markets and have materially altered the way in which we conduct our day-to-day business. We have followed guidance by the U.S., Israel, Hong Kong and other applicable foreign and local governments to protect our employees and operations during the pandemic and have implemented a remote environment for our business. We cannot predict the potential impacts of the COVID-19 pandemic or the
30

TABLE OF CONTENTS
distribution of vaccines on our business or operations, but we will continue to actively monitor the related issues and may take further actions that alter our business operations, including as may be required by federal, state, local or foreign authorities or that we determine are in the best interests of our employees, players, partners and stockholders.
In addition to the potential direct impacts to our business, the global economy has been, and is likely to continue to be, significantly weakened as a result of the actions taken in response to COVID-19, and future government intervention remains uncertain. A weakened global economy may impact our players and their purchasing decisions within our games, in particular as a result of the limitations associated with redeeming real-world rewards due to government-mandated or other restrictions on travel and other activities and limitations on our players’ discretionary spending, consumer activity during the pandemic and its impact on advertising investments, and the ability of our business partners, including our awards partners, to navigate this complex social health and economic environment, any of which could result in disruption to our business and results of our operations.
The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the existence of any additional waves of the COVID-19 pandemic, the extent and effectiveness of containment actions, progress towards widespread rapid testing, effective treatment alternatives and the success and timing of vaccination efforts, and the impact of these and other factors on our employees, players and business partners. If we are not able to respond to and manage the impact of such events effectively, our business may be harmed.
See “Risk Factors” for more information related to COVID-19.
Key Factors Affecting Our Performance
There are a number of factors that affect the performance of our business, and the comparability of our results from period to period, including:
Third-Party Platform Agreements—We derive a significant portion of our revenue from in-game purchases of virtual currency that are processed by platform providers such as the Apple App Store, Google Store and Amazon Appstore and on Facebook. The platform providers charge us a transaction fee to process payments from our players for their purchase of in-game virtual currency. These platform fees are generally set at 30% of the in-game purchase. Each platform provider has broad discretion to set its platform fees and to change and interpret its terms of service and other policies with respect to us and other developers in its sole discretion, and those changes may be unfavorable to us.
Player Acquisition—Establishing and maintaining a loyal network of players and paying players is vital for our success. As such, we spend a significant amount on advertising and other forms of player acquisition, such as traditional marketing and advertising, email and push notifications, and cross promoting between our games in order to grow our player base. These expenditures are generally related to new content launches, game enhancements and ongoing programs to drive new player acquisition and the reactivation of lapsed player engagement. Our player acquisition strategy is centered on a payback period methodology, and we strive to optimize spend between the acquisition of new players and the reactivation of inactive players.
Player Monetization—Our revenue has been primarily driven through the sale of virtual currency. Paying players purchase virtual currency in our games because of the perceived value, which is dependent on the relative ease of obtaining equivalent virtual currency by simply playing our game. The perceived value of our virtual currency can be impacted by various actions that we take in the games including offering discounts for virtual currency or giving away virtual currency in promotions. Managing game economies is difficult and relies on our assumptions and judgment. If we fail to manage our virtual economies properly or fail to promptly and successfully respond to any such disruption, our reputation may suffer and our players may be less likely to play our games and to purchase virtual currency from us in the future, which would cause our business, financial condition and results of operations to suffer.
Investment in Game Development and our playAWARDS platform—In order to maintain interest from existing players and add new players and achieve our desired revenue growth, we must continually improve the content, offers, and features in our existing games, the release of new games, and the features of the playAWARDS platform. As a result, we invest a significant amount of our technological and creative resources to ensure that we support an appropriate cadence of innovative content that our players will find appealing. These expenditures generally occur in advance of the release of new content or the launch of a new game, and the resulting revenue may not exceed the development costs, or the game or feature may be abandoned in its entirety.
Real-World Rewards—We currently offer real-world rewards relating to, among other things, dining, live entertainment shows and hotel rooms, and we plan to continue to expand and diversify our rewards loyalty program in order to maintain and enhance the perceived value offering to our players. Our players’ willingness to make in-game purchases is directly impacted by our ability to provide desirable rewards. The real-world rewards we offer to our players are provided at no cost to us by our awards partners, and there is no obligation for us to pay or otherwise compensate either our awards partners or players for any player redemptions under our awards partner agreements.
31

TABLE OF CONTENTS
Key Performance Indicators and Non-GAAP Measures
We manage our business by regularly reviewing several key operating metrics to track historical performance, identify trends in player activity, and set strategic goals for the future. Our key performance metrics are impacted by several factors that could cause them to fluctuate on a quarterly basis, such as platform providers’ policies, seasonality, player connectivity, and the addition of new content to games. We believe these measures are useful to investors for the same reasons. In addition, we also present certain non-GAAP performance measures. These performance measures are presented as supplemental disclosure and should not be considered superior to or as a substitute for the consolidated financial statements prepared under U.S. GAAP. The non-GAAP measures presented in this Quarterly Report should be read together with the unaudited condensed consolidated financial statements and the respective related notes thereto included elsewhere in this Quarterly Report. The key performance indicators and non-GAAP measures presented in this Quarterly Report may differ from similarly titled measures presented by other companies and are not a substitute for financial statements prepared in accordance with U.S. GAAP.
Key Performance Indicators
Daily Active Users (“DAU”)
DAU is defined as the number of individuals who played a game on a particular day. We track DAU by the player ID, which is assigned for each game installed by an individual. As such, an individual who plays two different games on the same day is counted as two DAU while an individual who plays the same game on two different devices is counted as one DAU. Average DAU is calculated as the average of the DAU for each day during the period presented. We use DAU as a measure of audience engagement to help us understand the size of the active player base engaged with our games on a daily basis.
Monthly Active Users (“MAU”)
MAU is defined as the number of individuals who played a game in a particular month. As with DAU, an individual who plays two different games in the same month is counted as two MAU while an individual who plays the same game on two different devices is counted as one MAU. Average MAU is calculated as the average of MAU for each calendar month during the period presented. We use MAU as a measure of audience engagement to help us understand the size of the active player base engaged with our games on a monthly basis.
Daily Paying Users (“DPU”)
DPU is defined as the number of individuals who made a purchase in a mobile game during a particular day. As with DAU and MAU, we track DPU based on account activity. As such, an individual who makes a purchase on two different games in a particular day is counted as two DPU while an individual who makes purchases in the same game on two different devices is counted as one DPU. Average DPU is calculated as the average of the DPU for each day during the period presented. We use DPU to understand the size of our active player base that makes in-game purchases. This focus directs our strategic goals in setting player acquisition and pricing strategy.
Daily Payer Conversion
Daily Payer Conversion is defined as DPU as a percentage of DAU on a particular day. Average Daily Payer Conversion is calculated as the average DPU divided by average DAU for a given period. We use Daily Payer Conversion to understand the monetization of our active players.
Average Daily Revenue Per DAU (“ARPDAU”)
ARPDAU is defined for a given period as the average daily revenue per average DAU, and is calculated as game and advertising revenue for the period, divided by the number of days in the period, divided by the average DAU during the period. We use ARPDAU as a measure of overall monetization of our players.
Non-GAAP Measures
Adjusted EBITDA (“AEBITDA”) and AEBITDA Margin
Adjusted EBITDA, or AEBITDA, as used herein, is a non-GAAP financial performance measure that is presented as a supplemental disclosure and is reconciled to net income as the most directly comparable GAAP measure. We define AEBITDA as net income before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, changes in fair value of warrant liabilities and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items) and adjusting for the impact of costs capitalized for internal-use software projects. We also use AEBITDA Margin, another non-GAAP measure, which we calculate as the percentage of AEBITDA to revenue.
32

TABLE OF CONTENTS
We use AEBITDA and AEBITDA Margin to monitor and evaluate the performance of our business operations, facilitate internal comparisons of our operating performance, and to analyze and evaluate decisions regarding future budgets and initiatives. We believe that both measures are useful because they provide investors with information regarding our operating performance that is used by our management in its reporting and planning processes. Adjusted EBITDA and Adjusted EBITDA Margin as calculated herein may not be comparable to similarly titled measures and disclosures reported by other companies.
The following table sets forth the reconciliation of AEBITDA and AEBITDA Margin to net income and net income margin, the most directly comparable GAAP measure (in thousands, except percentages).
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income (loss)$(7,035)$12,959 $(1,117)$18,451 
Depreciation & amortization6,898 5,440 12,932 10,828 
Income tax expense(5,838)3,322 (4,490)3,757 
Stock-based compensation expense1,946 730 2,846 1,355 
Change in fair value of warrant liability(110)— (110)— 
Special infrequent(1)
7,500 27 7,500 1,427 
Restructuring and related(2)
20 50 76 78 
Other(3)
(5)(67)279 67 
AEBITDA3,376 22,461 17,916 35,963 
GAAP Revenue70,822 77,870 144,919 136,172 
Margin as a % of revenue
Net income (loss) margin(9.9)%16.6 %(0.8)%13.5 %
AEBITDA margin4.8 %28.8 %12.4 %26.4 %
(1)Amounts reported during the three and six months ended June 30, 2021 and 2020 represent (i) charitable donations made by us related to the COVID-19 pandemic (ii) the transaction bonus per the terms of the Merger Agreement and (iii) a charitable donation per the terms of the Merger Agreement.

(2)Amounts reported during the three and six months ended June 30, 2021 and 2020 consist of severance-related costs.

(3)Amounts reported in “Other” include interest expense, interest income, foreign currency gains/losses, and non-cash gains/losses on the disposal of assets.
Results of Operations
Summarized Consolidated Results of Operations
The following table summarizes our consolidated results of operations for the three and six months ended June 30, 2021 and 2020 (in thousands, except percentages):
Three Months Ended June 30,Six Months Ended June 30,
20212020$ Change% Change20212020$ Change% Change
Revenue$70,822 $77,870 $(7,048)(9.1)%$144,919 $136,172 $8,747 6.4 %
Operating expenses83,811 61,751 22,060 35.7 %150,358 113,992 36,366 31.9 %
Operating income(12,989)16,119 (29,108)(180.6)%(5,439)22,180 (27,619)(124.5)%
Net income (loss)(7,035)12,959 (19,994)(154.3)%(1,117)18,451 (19,568)(106.1)%
AEBITDA3,376 22,461 (19,085)(85.0)%17,916 35,963 (18,047)(50.2)%
Net income (loss) margin(9.9)%16.6 %(26.5)(159.6)%(0.8)%13.5 %(14.3)(105.9)%
AEBITDA margin4.8 %28.8 %(24.0)(83.3)%12.4 %26.4 %(14.0)(53.0)%
33

TABLE OF CONTENTS
Revenue and Key Performance Indicators (in thousands, except percentages and ARPDAU)
Three Months Ended June 30,Six Months Ended June 30,
20212020Change% Change20212020Change% Change
Virtual currency$69,746 $77,453 $(7,707)(10.0)%$142,972 $135,621 $7,351 5.4 %
Advertising1,076 417 659 158.0 %1,947 551 1,396 253.4 %
Net revenue$70,822 $77,870 $(7,048)(9.1)%$144,919 $136,172 $8,747 6.4 %
Average DAU1,253 1,548 (295)(19.1)%1,256 1,580 (324)(20.5)%
Average MAU4,297 4,466 (169)(3.8)%4,017 4,521 (504)(11.1)%
Average DPU34 36 (2)(5.6)%35 34 2.9 %
Average Daily Payer Conversion2.7 %2.3 %0.4pp17.4 %2.8 %2.2 %0.6pp27.3 %
ARPDAU (in dollars)$0.62 $0.55 $0.07 12.7 %$0.64 $0.47 $0.17 36.2 %
pp = percentage points
Revenue information by geography is summarized as follows (in thousands, except percentages):
Three Months Ended June 30,Six Months Ended June 30,
20212020Change% Change20212020Change% Change
United States$61,670 $66,317 $(4,647)(7.0)%$125,743 $115,469 $10,274 8.9 %
North America (excluding United States)3,867 5,020 (1,153)(23.0)%8,012 8,483 (471)(5.6)%
Other5,285 6,533 (1,248)(19.1)%11,164 12,220 (1,056)(8.6)%
Net revenue$70,822 $77,870 $(7,048)(9.1)%$144,919 $136,172 $8,747 6.4 %
Net revenue decreased $7.0 million, or 9.1%, from $70,822 during the three months ended June 30, 2021 compared to $77,870 during the three months ended June 30, 2020. The decrease was primarily driven by a reduction in DAU. While DAU and MAU indicate the overall size of our player base, our primary focus is on expanding the population of DPU. During the three months ended June 30, 2020, we experienced extraordinary engagement and monetization as a resulting impact of the COVID-19 related lockdowns and stay-at-home orders in many worldwide jurisdictions. Our daily conversion rate increased 0.4 percentage points to 2.7% during the three months ended June 30, 2021 from 2.3% in the three months ended June 30, 2020.
Net revenue increased $8.7 million, or 6.4%, from $144.9 million during the six months ended June 30, 2021 compared to $136.2 million during the six months ended June 30, 2020. The increase was primarily driven by the increase in average DPU, as well as the increase in spending per player, despite an overall decrease in DAU. Our daily conversion rate increased 0.6 percentage points to 2.8% during the six months ended June 30, 2021 from 2.2% in the six months ended June 30, 2020.
Operating Expenses
The following table summarizes our consolidated operating expenses for each applicable period (in thousands, except percentages):
Three Months Ended June 30,% of Revenue
20212020$ Change% Change20212020
Operating expenses:
Cost of revenue$23,032 $26,625 $(3,593)(13.5)%32.5 %34.2 %
Selling and marketing24,187 14,228 9,959 70.0 %34.2 %18.3 %
Research and development17,296 11,647 5,649 48.5 %24.4 %15.0 %