Document

We have audited the accompanying consolidated financial statements of Pixode Games Limited (the Company), which comprise the consolidated balance sheet as of December 31, 2023, and the related consolidated statements of operations, comprehensive loss, shareholder’s deficit, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America (GAAP).

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with GAAP and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the consolidated financial statements are available to be issued.

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are

•Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.


	December 31, 2023
ASSETS
Current assets:
Cash	$	261,016
Accounts receivable	20,159
Income tax receivable	55,592
Other current assets	31,957
Total current assets	368,724
Property and equipment, net	17,819
Deferred income tax asset	22,591
Operating lease right-of-use asset	105,517
Total noncurrent assets	145,927
Total assets	$	514,651

LIABILITIES AND SHAREHOLDER’S DEFICIT
Current liabilities:
Accounts payable	286,139
Accrued and other current liabilities	566,645
Income tax payable	51,126
Operating lease liability	73,796
Long-term debt	7,829,747
Total current liabilities	8,807,453
Operating lease liability, noncurrent	31,719
Long-term debt, less current portion	150,000
Advance subscription agreement	850,000
Total noncurrent liabilities	1,031,719
Total liabilities	$	9,839,172

Commitments and contingencies (Notes 7 and 12)

Shareholder’s deficit:
Ordinary share capital, £1.00 par value (1,000 shares authorized, issued, and outstanding	1,332
Additional paid-in capital	1,179,148
Accumulated other comprehensive loss	(145,372)
Accumulated deficit	(10,359,629)
Total shareholder’s deficit	(9,324,521)
Total liabilities and shareholder’s deficit	$	514,651


	Year ended December 31, 2023
Net revenues	$	107,544
Operating expenses:
Cost of revenues(1)	24,440
Selling and marketing	1,449,454
Research and development	1,830,911
General and administrative	796,219
Depreciation	10,067
Total operating expenses	4,111,091
Loss from operations	(4,003,547)
Other expenses, net:
Interest expense, net	(306,557)
Other income, net	20,286
Total other expenses, net	(286,271)
Loss before income taxes	(4,289,818)
Income tax expense	(30,348)
Net loss	$	(4,320,166)


	Ordinary Shares			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Shareholder’s Deficit
	Shares	Amount
Balance as of January 1, 2023	1,000	$	1,332	$	1,179,148	$	162,404	$	(6,039,463)	$	(4,696,579)
Net loss	—	—		—		—		(4,320,166)		(4,320,166)
Foreign currency translation adjustment	—	—		—		(307,776)		—		(307,776)
Balance as of December 31, 2023	1,000	$	1,332	$	1,179,148	$	(145,372)	$	(10,359,629)	$	(9,324,521)


	December 31, 2023
Cash flows from operating activities:
Net loss	$	(4,320,166)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	10,067
Deferred income tax expense	11,288
Amortization of operating lease right-of-use asset	70,283

Changes in operating assets and liabilities
Accounts receivable	(19,345)
Other current assets	7,317
Income tax receivable, net of payable	226,539
Accounts payable	198,863
Accrued and other current liabilities	195,383
Operating lease liability	(70,116)
Net cash used in operating activities	(3,689,887)

Cash flows from investing activities:
Purchase of property and equipment	(4,045)
Net cash used in investing activities	(4,045)

Cash flows from financing activities:
Proceeds from long-term debt	3,944,128
Payments on long-term debt	(1,075,013)
Proceeds from advance subscription agreement	850,000
Net cash provided by financing activities	3,719,115

Effect of foreign currency translation adjustment on cash	2,116

Net change in cash	27,299
Cash at beginning of period	233,717
Cash at end of period	$	261,016

Supplemental cash flow disclosure:

Income tax refunds, net of payments	$	230,445

Pixode Games Limited (the "Company") was incorporated in the United Kingdom on January 21, 2016 as a private company and commenced its operations on the same day. The principal activity of the Company and its wholly-owned subsidiary, Pixode Israel Limited (incorporated in Israel), is the development and publishing of mobile and social games.

On July 1, 2024, the Company sold substantially all its tangible and intangible assets to companies affiliated with PLAYSTUDIOS, Inc. (the “Asset Sale”). The Company’s assets were sold for $3.5 million cash paid at closing, and the Company may receive additional consideration, contingent upon the satisfaction of certain product and financial milestones as defined in the sales agreement, up to a maximum amount of $113.5 million.

As a result of the sale, the Company's operations will be significantly reduced. The Company does not expect to incur further research and development or selling and marketing expenses. Moving forward, the Company will focus on its remaining operations, primarily based in the United Kingdom, which will primarily consist of general corporate matters. The Israel entity is expected to become dormant. Proceeds from the sale will support the Company's operations and other general corporate purposes.

The Company prepares its consolidated financial statements in accordance with Financial Accounting Standards Board (“FASB) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements – Going Concern, which requires management to assess the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued.

The Company has incurred recurring net losses and negative cash flows from operating activities since inception and has an accumulated deficit of $10,359,629 as of December 31, 2023. Management believes with the existing financial resources as of December 31, 2023, the proceeds from the Asset Sale, and proper management of expenditures, the Company will have sufficient resources to sustain operations through September 2025. However, there can be no assurance that management will be successful in these efforts and, if the Company requires additional debt or equity financing, there is no assurance financing will be available at terms acceptable to the Company, if at all.

The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated upon consolidation.

The functional currency of the Company and its subsidiary is the applicable local currency. The translation of foreign currencies into U.S. dollars is performed for the subsidiary assets and liabilities using current foreign currency exchange rates in effect at the consolidated balance sheet date and for revenue and expense accounts using average foreign currency exchange rates during the year. Capital accounts are translated at historical foreign currency exchange rates. Translation gains and losses are included in shareholder’s deficit as a component of accumulated other comprehensive income. Adjustments that arise from foreign currency exchange rate changes on transactions, primarily driven by intercompany transactions, denominated in a currency other than the functional currency are included in “Other income (expense), net” in the Consolidated Statement of Operations.

The Company reports comprehensive loss, which includes the Company’s net loss as well as changes in equity from non-shareholder sources, as a separate component of shareholders’ deficit. In the Company’s case, the change in shareholder’s deficit from non-shareholder sources included in comprehensive loss is the cumulative foreign exchange translation adjustment.

The preparation of 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 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, the expensing or capitalization of research and development costs for internal-use software, and assumptions used in accounting for income taxes. 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.

The Company is subject to a number of risks associated with companies at a similar stage, including dependence on key individuals, competition from substitute services and larger companies, volatility of the industry, ability to obtain adequate financing to support growth, the ability to attract and retain additional qualified personnel to manage the anticipated growth of the Company, and general economic and political conditions.

The Company’s accounts receivable consist primarily of amounts due from social and mobile game platform operators, including Apple Inc. and Alphabet Inc., as well as advertising agencies. Accounts receivable are typically non-interest bearing and are initially recorded at invoiced amounts. The Company regularly reviews accounts receivable by considering current and expected economic conditions and the financial positions its customers. Accounts are written off when the Company deems them to be uncollectible. Recoveries of accounts previously written off are recorded when received. The Company reserves an estimated amount for receivables that may not be collected to reduce receivables to their net carrying amount, which approximates fair value. Methodologies for estimating the allowance for uncollectible amounts range from specific reserves to various percentages applied to aged receivables.

financial instruments recorded at amortized cost, including accounts receivable. The standard introduces the “expected credit loss methodology” and creates the current expected loss model (“CECL”), which replaces the “incurred credit loss” model for the measurement of credit losses. Credit losses continue to be measured and recognized based on historical experience and an evaluation of customer creditworthiness, but CECL also requires the use of reasonably supportable forecasted conditions to determine collectability.

The Company adopted ASC 326 using the modified retrospective method. Results of operations for 2023 are presented in accordance with the new standard. The adoption did not have a material impact on the Company’s consolidated financial position based on the change in methodology.

Items of property and equipment are measured at cost with the addition of direct acquisition costs, less accumulated depreciation. Cost includes amounts paid to acquire or construct the asset as well as any expenditure that substantially adds to the value of or significantly extends the useful life of an existing asset.

Long-lived assets consist of property and equipment and the ROU asset. Long-lived assets are reviewed for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds their fair value. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance would be depreciated or amortized over the revised estimated useful life.

targeted marketing promotions. Additionally, players can send free “gifts” of virtual currency to their friends through interactions with certain social platforms. Players may also purchase additional virtual currency through accepted payment methods offered by the platform. Once a purchase is completed, the virtual currency is deposited into the player’s account and is not separately identifiable from previously purchased virtual currency or virtual currency obtained by the player for free. Once obtained, virtual currency (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than gameplay. When virtual currency is consumed in the games, the player could “win” and would be awarded additional virtual currency or could “lose” and lose the future use of that virtual currency. As the player does not receive any additional benefit from the games, nor is the player entitled to any additional rights once the player’s virtual currency is substantially consumed, the Company has concluded that the virtual currency represents consumable goods.

Players can earn loyalty points through a variety of activities, including but not limited to playing the Company’s games, engaging with in-game advertising, engaging with marketing emails, and logging into the game. The loyalty points can be redeemed for rewards offered by the Company’s rewards partners. There is no obligation for the Company to pay or otherwise compensate the Company’s rewards partners for any player redemptions under the Company’s rewards partner agreements. In addition, both paying and non-paying players can earn loyalty points. Therefore, the loyalty points earned by players are marketing offers and do not provide players with material rights. Accordingly, the loyalty points do not require any allocation to the transaction price of virtual currency.

Additionally, certain of the Company’s games participate in an additional program that ranks players into different tiers based on tier points earned during a given time frame. Tier points can be earned through a variety of player engagement activities including, but not limited to logging into the games, achieving multi-day log-in streaks, collecting hourly bonuses, and purchasing virtual currency bundles. Depending on the tier, players are granted access to special benefits at the Company’s discretion. Similar to loyalty points that are redeemable for real-world rewards, the tier points are not awarded as a result of a contract with a customer since both paying and non-paying players can earn these tier points. As a result, the tier points earned by players do not provide players with material rights and do not require any allocation to the transaction price of virtual currency.

The Company has the performance obligation to display and provide access to the virtual currency purchased by the Company’s player within the game whenever the player accesses the game until the virtual currency is consumed. Payment is required at the time of purchase and the transaction price is fixed. The transaction price, which is the amount paid for the virtual currency by the player, is allocated entirely to this single performance obligation.

As virtual currency represents consumable goods, the Company recognizes revenues as the virtual currency is consumed over the estimated consumption period. Since the Company is unable to distinguish between the consumption of purchased or free virtual currency, the Company must estimate the amount of outstanding purchased virtual currency at each reporting date based on player behavior. The Company recognizes revenues from in-game purchases of virtual currency over this estimated average period between when the virtual currency is purchased and consumed. If applicable, the Company records the unconsumed virtual currency in “Deferred revenue” and records the prepaid payment processing fees associated with the deferred revenue in “Other current assets”.

The Company continues to gather detailed player behavior and assess this data in relation to its revenue recognition policy. To the extent the player behavior changes, the Company may reassess its estimates and assumptions used for revenue recognition prospectively on the basis that the changes are caused by new factors indicating a change in player behavior patterns.

The Company has contractual relationships with advertising service providers for advertisements within the Company’s games. Advertisements can be in the form of an impression, click-throughs, banner ads, or offers. Offers are advertisements where the players are rewarded with virtual currency for watching a short video. The Company has determined the advertising service provider to be its customer and displaying the advertisements within its games is identified as the single performance obligation. Revenues from advertisements and offers are recognized at a point in time when the advertisements are displayed, or when the player has completed the offer as the advertising service provider simultaneously receives and consumes the benefits provided from these services. The price can be determined by the applicable evidence of the arrangement, which may include a master contract or a third-party statement of activity.

The transaction price is generally the product of the advertising units delivered (e.g. impressions, videos viewed) and the contractually agreed upon price per advertising unit. Further, the price per advertising unit can also be based on revenue share percentages stated in the contract. The number of advertising units delivered is determined at the end of each month, so there is no uncertainty about the transaction price. Payment terms are stipulated as a specific number of days subsequent to end of the month, ranging from 45 to 60 days.

The Company’s games are played on social and mobile third-party platforms for which the third parties collect monies from players and remit net proceeds after deducting payment processing fees. The Company is primarily responsible for providing access to the virtual currency, has control over the content and functionality of games before they are accessed by players, and has the discretion to establish the pricing for the virtual currency. Therefore, the Company concluded that it is the principal in these transactions and, as a result, revenues are reported gross of payment processing fees. Payment processing fees are recorded as a component of “Cost of revenues” in the Consolidated Statement of Operations.

The advertising networks act on the Company’s behalf when negotiating the advertising placements in the Company’s games and the Company receives a commission from the advertising network for the transaction with the third party. The advertising networks have control of the transaction price with its customers. Therefore, the Company concluded that it is the agent in these transactions and, as a result, reports its advertising revenues net of amounts retained by advertising service providers.

Cost of revenues relates to direct expenses incurred to generate revenue from online and mobile games and is recorded as incurred. The Company’s cost of revenue consists primarily of payment processing fees, and hosting and data center costs related to operating its games. Payment processing fees consist of fees paid to third-party social and mobile platform operators. If applicable, other than the deferral of payment processing fees associated with deferred revenue, payment processing fees are expensed as incurred.

The Company accounts for its leases under FASB ASC Topic 842, Leases, which requires all entities that lease assets to capitalize the assets with terms of greater than twelve months and related liabilities on the consolidated balance sheet. . Leases are classified as either an operating or finance lease under ASC 842, with classification affecting the pattern of expense recognition in operations.

An operating lease right-of-use asset ("ROU asset") and operating lease liability are recognized at the lease commencement date and initially measured based on the present value of lease payments and lease incentives received over the defined lease term. The Company’s lease terms may include options to extend or terminate the lease. The Company assesses these options using a threshold of whether the Company is reasonably certain to exercise the option to extend or terminate the lease. For leases the Company is reasonably

certain to renew, the option periods are included within the lease term and, therefore, the measurement of the ROU asset and lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s facility lease agreement does not contain any restrictions or covenants.

The implicit interest rate is used to determine the present value of future lease payments when readily determinable. As most operating leases do not provide an implicit interest rate, the Company uses its estimated incremental borrowing rate based upon the capital structure of the Company and other information available at the lease commencement date in determining the present value of lease payments. The operating lease ROU assets also include any prepaid lease payments made and are net of any lease incentives. The Company does not record an ROU asset or lease liability for operating leases with a term of twelve months or less unless the lease provides an option to purchase the asset at the end of the lease term or an option to extend the lease longer than twelve months that management is reasonably certain to exercise.

According to FASB ASC Topic 820, Fair Value Measurement, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants as of the measurement date. The fair value hierarchy establishes three tiers, which prioritize the inputs used in measuring fair value as follows:

Entities are permitted to choose to measure certain financial instruments and other items at fair value. The Company has not elected the fair value measurement option for any of the Company’s assets or liabilities that meet the criteria for this election.

Selling and marketing expenses consist of compensation, employee benefits, and Internet advertising costs. Fees paid to third parties and merchants for new customer referrals are also included in selling and marketing expenses. Costs associated with the Company’s advertising are expensed as incurred and are included in selling and marketing expenses.

The Company incurs various direct costs in relation to the development of future social and mobile games along with costs to improve current social and mobile games. Research and development costs consist primarily of consulting fees. The Company evaluates research and development costs incurred to determine whether the costs relate to the development of software and are, therefore, qualified to be capitalized under FASB ASC Topic 350-40, Intangible - Goodwill and Other, Internal-Use Software. The Company expenses all research and development costs as incurred.

of events that have been included in its consolidated financial statements or income tax returns. Under ASC 740, the Company determines deferred income tax assets and liabilities based on the temporary difference between the consolidated financial statements and tax bases of assets and liabilities using the enacted income tax rates in effect for the year in which it expects the differences to be recovered or settled. The Company establishes a valuation allowance based on the weight of the available positive and negative evidence to reduce deferred income tax assets to the amount that is more likely than not to be realized.

The Company accounts for uncertain tax positions in accordance with ASC 740, which requires companies to adjust their consolidated financial statements to reflect only those tax positions that are more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the issue. ASC 740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain income tax positions taken or expected to be taken in income tax returns. The Company recognizes interest and penalties related to unrecognized income tax benefits in the provision for income taxes. As of December 31, 2023, there were no uncertain tax positions.

Related party

Nature of Relationship

Description

Financial statement caption

December 31, 2023

Consolidated Balance Sheet

Apliko Ltd.

Shareholder

Working capital

Long-term debt

7,829,747

Adept Marketing Ltd.

Entity affiliated with key management

Leased asset

Operating lease right-of-use asset

105,517

Operating lease liability

105,515

Sandler-Backner Group Ltd.

Entity affiliated with key management

Working capital

Long-term debt, less current portion

150,000

Consolidated Statement of Operations

Adept Marketing Ltd.

Entity affiliated with key management

Rent and other facilities expenses

Selling & marketing expenses

General & administrative expenses

220,066

Or Reznitsky

Key Management

Contractor services

Selling & marketing expenses

69,853

Kinoa Labs Ltd.

Entity affiliated with shareholder

Software development services

Research & development expenses

59,900

The Company leases its office facility under a non-cancelable operating lease agreement expiring on May 31, 2025. Under the terms of the agreement, the Company is responsible for certain insurance, property tax, and maintenance expenses.

The facility lease has been classified as an operating lease under ASC 842. The ROU asset is being amortized ratably over the term of the lease. Lease expense under the operating lease, including interest on the operating lease liability, was $76,355 for the year ended December 31, 2023. The lease liability is collateralized by the leased facility.


	December 31, 2023
Operating lease right-of-use asset, net	$	105,517

Operating lease liability, current	73,796
Operating lease liability, noncurrent	31,719
Operating lease liability, total	$	105,515

Remaining lease term, years	1.4
Discount rate	4.5		%

In 2021, the Company’s subsidiary entered in loan agreements with Sandler - Backner Group Ltd. (collectively, the “SB Loan Agreements”) to provide for funding of working capital of $150,000. The maturity dates of the SB Loan Agreements are January 1, 2025 for $100,000 and September 14, 2025 for $50,000.

The interest rate on the borrowings are the minimum interest required under the Israeli law. As of December 31, 2023, the interest rate was 2.9%. For the year ended December 31, 2023, the Company recorded $5,477 of interest expense related to the SB Loan Agreement.

The interest rate on the borrowings under the Facility Agreement are 4.5% per annum. For the year ended December 31, 2023, the Company recorded $301,112 of interest expense related to the Facility Agreement. As of December 31, 2023, the Company recorded $428,794 of accrued interest under the Facility Agreement.

Commencing on October 2, 2023, the Company initiated an equity financing round of up to $3,000,000, as amended, through the Advance Subscription Agreement (“ASA”) program. The funds raised under the ASA were to be used for general working capital or for raising additional capital. The funds raised under the ASA were to be automatically converted into ordinary shares of the Company under certain circumstances, such as a next round financing, sale or initial public offering, or dissolution event, at a predetermined conversion rate.

As of December 31, 2023, unremitted earnings in foreign subsidiaries are indefinitely reinvested. Should these earnings be distributed in the future in the form of dividends or otherwise, the Company would be subject to withholding taxes payable in the tax jurisdictions.


	December 31, 2023
Deferred income tax assets:
Net operating loss carryforwards	$	2,615,928
Other assets	2,087
Other liabilities	20,504
Total gross deferred income tax assets	2,638,519
Less: valuation allowance	(2,615,928)
Net deferred income tax assets	$	22,591

Operations under the United Kingdom had a tax effected net operating loss carryforward of $2,615,928 as of December 31, 2023. which is fully offset by a valuation allowance due to lack of realizability. The net operating losses will be carried forward indefinitely. During the year ended December 31, 2023, the Company also claimed a refundable research and development income tax credit of $27,796, however, the refundable credit is not within the scope of ASC 740 due to its ability to be monetized outside of the income tax framework in accordance with the United Kingdom income tax laws.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of its deferred income tax assets. A significant piece of objective negative evidence evaluated was the historical cumulative loss of the Company. The amount of the deferred income tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as future projections for growth.

The Company has analyzed filing positions in all of the jurisdictions where it is required to file income tax returns and for all open tax years. The Company’s policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record the items as a component of income tax expense. The Company is subject to examination by the Israel Tax Authority for the years 2021 to present. The Company is subject to examination by His Majesty’s Revenue and Customs for the years 2021 to present.

From time to time, the Company may become a party to a variety of claims, lawsuits, and proceedings which arise in the ordinary course of business, including claims of alleged infringement of intellectual property rights. The Company records a liability when it believes it is probable that a loss will be incurred, and the amount of loss or range of loss can be reasonably estimated. Given the unpredictable nature of legal proceedings, the Company bases its estimate on the information available at the time of the assessment. As additional information becomes available, the Company may reassess the potential liability and may revise the estimate. Management believes the Company is not presently a party to any litigation the outcome of which, it believes, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on its business, operating results, or financial condition. As a result, no liability for potential future claims has been recorded as of December 31, 2023.

From time to time, in the normal course of business, the Company may indemnify other parties, with which it enters into contractual relationships, including customers, lessors and parties to other transactions with the Company. The Company may agree to hold other parties harmless against specific losses, such as those that could arise from a breach of representation, covenant or third-party infringement claims. It may not be possible to determine the maximum potential amount of liability under the indemnification agreements due to the unique facts and circumstances that are likely to be involved in each particular claim and indemnification provision. However, there have been no indemnification claims through December 31, 2023. Management believes potential future liabilities related to indemnification claims, if any, would not be material to the financial statements. As a result, no liability for potential claims has been recorded as of December 31, 2023.

The holders of ordinary shares 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 ordinary shares is entitled to one vote for each share of ordinary share held. In the event of a liquidation event and after all creditors debts have been fully satisfied, the remaining assets of the Company available for distribution to its shareholders, if any, will be distributed to the holders of ordinary shares ratably in proportion to the number of ordinary shares then held by each holder. None of the Company’s ordinary shares are entitled to preemptive rights and neither are subject to redemption.


			Estimated Useful Life
Computer and peripheral equipment			3 years
Office furniture and equipment			6.67 years
Leasehold improvements			Lesser of estimated useful life or remaining lease term


	December 31, 2023
Computer equipment and peripherals	29,062
Office furniture and equipment	5,717
Leasehold improvements	4,882
	39,661
Less: accumulated depreciation	(21,842)
Total property and equipment, net	$	17,819


	December 31, 2023
Accrued interest	440,121
Accrued payroll and vacation	90,618
Other current liabilities	35,906
Total other current liabilities	$	566,645


Year ending December 31,	Operating Lease
2024	$	78,148
2025	32,562



Thereafter	—
Total undiscounted cash flows	$	110,710
Less: imputed interest	$	5,195
Total lease liability	$	105,515


	December 31, 2023
Long-term debt, current	7,829,747
Long-term debt, noncurrent	150,000
Total borrowings	$	7,979,747


	Year Ended December 31, 2023
Virtual currency (over time)	$	64,702
Advertising (point in time)	42,842
Total net revenues	$	107,544



	Year Ended December 31, 2023
United States	$	70,565
United Kingdom	9,976
All other countries	27,003
Total net revenues	$	107,544


	Year Ended December 31, 2023
United Kingdom	$	(4,420,577)
Israel	130,759
Total income (loss)	$	(4,289,818)


	Year Ended December 31, 2023
Current tax expense	$	19,006
Deferred tax expense	11,342
Income tax expense	$	30,348


	Year Ended December 31, 2023
Expected expense at statutory rate	$	(902,363)
Earnings taxed at different foreign rate	(370,042)
Change in valuation allowance	1,302,753
Total income tax expense	$	30,348