Snail, Inc.
For the period ended Jun 30, 2026. Filed Aug 11, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 11, 2026
SNAL$1.95+7.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001493152-26-022718
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001493152-26-037141
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 152 previous paragraphs and 170 current paragraphs.
97 unchanged; 42 reworded; 26 added; 13 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 8 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
On July 2, 2026, we effected the Reverse Stock Split of our outstanding shares of Class A common stock and Class B common stock at a ratio of 1-for-5. We have retrospectively adjusted all references to Class A common stock, Class B common stock, stock warrants to purchase common stock, stock options to purchase common stock, share data, per share data and related information contained in the following discussion to reflect the effect of the Reverse Stock Split.
Current report
During the second quarter of 2026, we continued to execute on our multi-year expansion strategy for our foundationalARK franchise, celebrating the game’s 11-year anniversary on June 2, 2026. Building upon the momentum of our first-quarter releases, we launched theARK: Fantastic Tames Season 1 expansion pack in May 2026. At IGN Live in June 2026, we unveiled newARK franchise content, laying the necessary groundwork for our third-quarter launches in July 2026, which includedARK: Genesis Part 1 Ascended, ARK: Tides of Fortune, and the ARK: Dragontopia DLC. We anticipate this consistent release cadence will provide significant and ongoing revenue visibility.
Current report
As part of our ongoing initiative to expand our third-party publishing portfolio, our indie publisher label, Wandering Wizard, launchedAbove the Snow in April 2026. In May 2026, we further highlighted the progress of our strategic Polish studio partnerships via our upcoming bioengineering survival adventure,Honeycomb: The World Beyond. To reinforce our long-term global expansion, we attended Gamescom LATAM in May 2026 to explore publishing partnerships in one of gaming’s largest and fastest-growing markets. Furthermore, we continued to broaden our expanded universe portfolio by unveiling the upcomingPixARK: Terracrypt DLC on June 25, 2026, capitalizing on strong player engagement during the 2026 Steam Summer Sale.
Current report
During the second quarter of 2026, we continued to utilize our at-the-market (“ATM”) offering program to support liquidity and strategic initiatives. On May 20, 2026, we filed a prospectus supplement to offer and sell up to $3,660,000 of Class A common stock under the ATM Offering pursuant to our existing shelf registration statement on Form S-3 (No. 333-282030). During the three months ended June 30, 2026, we sold 659,429 shares of Class A common stock under the ATM offering for gross proceeds of $4,367,863. Subsequent to June 30, 2026, we sold an aggregate of 112,341 shares of Class A common stock under the ATM offering for gross proceeds of $582,763.
Current report
In accordance with Nasdaq rules, we submitted a plan to the Staff to regain compliance (the “Compliance Plan”) with the Nasdaq Requirements on May 11, 2026. On May 20, 2026, we received a letter from Nasdaq (the “Extension Letter”) stating that the Compliance Plan was accepted and that we would have until September 22, 2026, to evidence compliance with the Nasdaq Requirements. The Extension Letter further stated that if we fail to evidence compliance with the Nasdaq Requirements upon filing our quarterly report for the quarter ending September 30, 2026, our Class A common stock will be subject to delisting.
Current report
On July 1, 2026, we received written notice from the Nasdaq Staff notifying us that Nasdaq had determined to delist our Class A common stock from The Nasdaq Capital Market as a result of our continued noncompliance with the Minimum Bid Price requirement (the “Staff Determination”). We subsequently requested a hearing before the Nasdaq Hearings Panel (the “Panel”) to appeal the Staff Determination, and a hearing is scheduled for August 13, 2026. The hearing request automatically stayed any suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following the hearing. There can be no assurance that the Company will be successful in any appeal or that it will be able to regain compliance with Nasdaq’s listing requirements within the timeframe that may be provided by the Panel, or at all.
Current report
On July 2, 2026, we effected the Reverse Stock Split of our outstanding shares of Class A common stock and Class B common stock at a ratio of 1-for-5. The Class A common stock began trading on the Nasdaq Capital Market on a split-adjusted basis on July 6, 2026. On July 21, 2026, we received a letter from the Nasdaq Staff confirming that we had then regained compliance with the Minimum Bid Price Requirement. The letter further noted that the hearing on August 13, 2026 will proceed as scheduled due to our continued noncompliance with the Nasdaq Requirements.
Current report
Cost of revenues decreased for the three months ended June 30, 2026 primarily due to a $1.2 million decrease in software license royalties – related parties, resulting from a decrease inARKsales, a decrease in licensing fees – related party of $1.3 million due to a reduction in licensing costs to SDE, a decrease in license and amortization of $0.2 million primarily due to a lower depreciable base, a decrease in merchant fees of $0.2 million related toARK: Ultimate Mobile Editionrevenues, and a decrease in internet, server and data center costs of $0.2 million due to lower server utilization and a decrease in engine fees of $0.1 million.
Current report
General and administrative expenses for the three months ended June 30, 2026 increased by $1.5 million, or 43.2%, compared to the three months ended June 30, 2025. The increase in general and administrative expenses was due to an increase in salaries and wages of $0.6 million, an increase in contractors expense of $0.3 million, an increase in public company costs of $0.2 million, an increase in office expense of $0.2 million, an increase of $0.1 million in legal and professional fees, and an increase in insurance costs of $0.1 million.
Current report
Impairment of film assets for the three months ended June 30, 2026 decreased by $0.3 million, or 76.7%, compared to the three months ended June 30, 2025. The decrease was due to the impairment of two film assets during the three months ended June 30, 2026, as compared to the impairment of four film assets during the three months ended June 30, 2025.
Current report
Other expense
Current report
Comparison of the six months ended June 30, 2026 versus the six months ended June 30, 2025
Current report
Net revenues for the six months ended June 30, 2026 increased by $4.7 million, or 11.1%, compared to the six months ended June 30, 2025. Net revenue increased by $4.7 million primarily attributed to a $3.6 million increase in sales ofBellwright and a $5.3 million change in deferred revenues. The increase in revenue was partially offset by a decrease in revenue fromARK: Survival Evolved of $2.7 million, a decrease of $1.4 million attributable to lower sales ofARK: Survival Ascended, a decrease in revenue ofSaltyTV application of $0.1 million, and a decrease in revenue of $0.1 million from5th Street in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current report
Cost of revenues for the six months ended June 30, 2026 decreased by $1.9 million, or 6.3%, compared to the six months ended June 30, 2025.
Current report
General and administrative expenses
Current report
Research and development expenses
Current report
Advertising and marketing expenses
Current report
Advertising and marketing expenses for the six months ended June 30, 2026 decreased by $1.1 million, or 40.4%, compared to the six months ended June 30, 2025. The decrease was primarily attributable to higher advertising and marketing expenses during the six months ended June 30, 2025, which included higher costs associated with the Company’s presence at the Game Developers Conference (“GDC”) and increased advertising campaigns for ourARK: Aquaticaand Wandering Wizard titles andSaltyTVapplication and related offerings.
Current report
Interest expense
Current report
Other income (expense)
Current report
Other income decreased by $0.1 million for the six months ended June 30, 2026, in comparison to the six months ended June 30, 2025. The decrease is due to the recognition of a $0.1 million expense due to the revaluation of convertible notes and $0.1 million expense due to the revaluation of warrants in the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
Current report
Provision for income taxes
Current report
The Company had provision of income taxes of $0 million and $12.4 million for the six months ended June 30, 2026 and 2025, respectively. This is primarily due to the impact of the valuation allowance recorded against U.S. net deferred tax assets. Our effective income tax rate was 3% and (203%) during the six months ended June 30, 2026 and 2025, respectively.
Current report
For the three months ended June 30, 2026, bookings decreased by $5.3 million or 19.7%, compared to the three months ended June 30, 2025, primarily due to lower sales ofARK: Survival Ascended andARK: Survival Evolved, partially offset by bookings generated fromBellwright.
Current report
For the six months ended June 30, 2026, bookings decreased by $0.7 million, or 1.4%, compared to the six months ended June 30, 2025, primarily due to lower sales ofARK: Survival Evolved as the title continued to mature and consumer demand shifted towardARK: Survival Ascended and its related downloadable content. The decrease was offset by increased sales ofARK: Survival Ascended andBellwright, which benefited from promotional pricing during the period.
Current report
For the three months ended June 30, 2026, EBITDA decreased by $0.6 million, or 23.3%, compared to the three months ended June 30, 2025. The decrease was primarily driven by $14.0 million decline in the provision for income taxes, partially offset by a decrease in net loss of $13.5 million, a decrease in depreciation expense of $0.1 million, and a decrease in interest income and interest income– related parties of $0.1 million.
Removed paragraphs (13)
Previous report
If we do not achieve compliance with the Minimum Bid Price Requirement by June 29, 2026, we will not be eligible for additional time to comply because of the second Nasdaq deficiency described below.
Previous report
In accordance with Nasdaq rules, we had 45 calendar days, or until May 11, 2026, to submit a plan to the Staff to regain compliance (the “Compliance Plan”) with the Nasdaq Requirements. We submitted the Compliance Plan on May 11, 2026, and it is currently under Nasdaq review. If the Compliance Plan is accepted, Nasdaq can grant an extension of up to 180 calendar days from the date of the Letter for us to evidence compliance.
Previous report
Revenues
Previous report
Cost of revenues
Previous report
Impairment of film assets
Previous report
Revenues
Previous report
Cost of revenues
Previous report
Impairment of film assets
Previous report
Other income
Previous report
For the three months ended March 31, 2026, bookings increased by $4.7 million or 21.1%, compared to the three months ended March 31, 2025, driven by improved sales promotions in 2026 compared to 2025, continued benefit from the December 2025ARK: Lost Colony DLCrelease andBellwright’shighly regarded content update in late 2025.
Previous report
Equity Line Purchase Agreement
Previous report
On August 24, 2023, we entered into a common stock purchase agreement (the “Equity Line Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with an investor, pursuant to which the investor has committed to purchase up to $5,000,000 in shares of the Class A common stock, subject to certain limitations and conditions set forth in the Equity Line Purchase Agreement.
Previous report
We have registered shares for potential issuance on exercise of the warrants, or drawing of the equity line, on a Registration Statement on Form S-1 that was declared effective on October 30, 2023. As of March 31, 2026, we have not sold any Class A common stock under the Equity Line Purchase Agreement and the agreement has expired. The investor has exercised 33,333 warrants.
Reworded paragraphs (42)
Previous wording
Our mission is to provide high-quality entertainment experiences to audiences around the world. We are a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world. We have built a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs, and mobile devices.ARK: Survival Evolved,which has consistently ranked among top-grossing titles on Steam. Our expertise in technology, in-game ecosystems and monetization of online multiplayer games has enabled us to assemble a broad portfolio of intellectual property across multiple media formats and technology platforms. Our flagship franchise from which we generate the substantial majority of our revenues,ARK, is a leader within the sandbox survival genre with 110.6 million console and PC installs through March 31, 2026. See below for discussion of key performance metrics and non-GAAP measures. In the three months ended March 31, 2026,ARK: Survival Evolved andARK: Survival Ascendedcombined for an average total of 244,000 daily active users (“DAUs”) on the Steam and Epic platforms, as compared to 243,000 in the three months ended March 31, 2025. We define “daily active users” as the number of unique users who play any given game on any given day. For the three months ended March 31, 2026 and 2025, we generated 85.7% and 91.6%, respectively, of our revenues from theARK franchise.
Current wording
Our mission is to provide high-quality entertainment experiences to audiences around the world. We are a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world. We have built a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs, and mobile devices.ARK: Survival Evolved,which has consistently ranked among top-grossing titles on Steam. Our expertise in technology, in-game ecosystems and monetization of online multiplayer games has enabled us to assemble a broad portfolio of intellectual property across multiple media formats and technology platforms. Our flagship franchise from which we generate the substantial majority of our revenues,ARK, is a leader within the sandbox survival genre with 112.4 million console and PC installs through June 30, 2026. See below for discussion of key performance metrics and non-GAAP measures. In the three and six months ended June 30, 2026,ARK: Survival Evolved andARK: Survival Ascendedcombined for an average total of 225,000 and 238,000 daily active users (“DAUs”) on the Steam and Epic platforms, as compared to 242,000 and 242,000 in the three and six months ended June 30, 2025, respectively. We define “daily active users” as the number of unique users who play any given game on any given day. For the three months ended June 30, 2026 and 2025, we generated 83.0% and 90.1%, respectively, of our revenues from theARK franchise. For the six months ended June 30, 2026 and 2025, we generated 84.6% and 90.8%, respectively, of our revenues from theARKfranchise
Previous wording
Our dedication to providing audiences with high-quality entertainment experiences utilizing the latest gaming technology has produced strong user engagement, continued revenue growth, and increased cash flows. Through March 31, 2026, ourARK franchise game has been played for 4.4 billion hours with an average playing time per user of 160 hours and with the top 21.3% of all players spending over 100 hours in the game, according to data from the Steam platform. For the three months ended March 31, 2026 and 2025, our net revenue was $27.3 million and $20.1 million, respectively. During the three months ended March 31, 2026, approximately 30.3% of our revenue came from consoles, 62.9% from PC and 5.3% from mobile as compared to 41.3% from consoles, 44.8% from PC and 11.7% from mobile during the three months ended March 31, 2025. We had a net income of $2.1 million compared to a net loss of $1.9 million, for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Our dedication to providing audiences with high-quality entertainment experiences utilizing the latest gaming technology has produced strong user engagement, continued revenue growth, and increased cash flows. Through June 30, 2026, ourARK franchise game has been played for 4.5 billion hours with an average playing time per user of 160 hours and with the top 21.3% of all players spending over 100 hours in the game, according to data from the Steam platform. For the three months ended June 30, 2026 and 2025, our net revenue was $19.7 million and $22.2 million, respectively. For the six months ended June 30, 2026 and 2025, our net revenue was $47.0 million and $42.3 million, respectively. During the three months ended June 30, 2026, approximately 36.0% of our revenue came from consoles, 55.1% from PC and 6.9% from mobile as compared to 42.8% from consoles, 45.2% from PC and 9.2% from mobile during the three months ended June 30, 2025. During the six month ended June 30, 2026, approximately 32.7% of our revenue came from consoles, 59.6% came from PC and 6.0% from mobile platforms as compared to 42.1% from consoles, 45.0% from PC and 10.4% from mobile platforms during the six month ended June 30, 2025. We had a net loss of $3.0 million compared to a net loss of $16.6 million, for the three months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, we had a net loss of $0.9 million as compared to net loss of $18.5 million for the six months ended June 30, 2025.
Previous wording
We continuously evaluate and invest in content strategy to improve and innovate our games and features and to develop current technological platforms. We are currently actively investing in expanding our gaming pipeline as well as developing media related to our gaming intellectual property. We also continue to invest to grow our micro-influencer platform,NOIZ, by attracting new influencers and brand customers. We have established a new division internally under the Interactive Films brand. This division will focus on creating content in the vertical short film segment of the digital entertainment market. The mobile application has already launched on iOS and Android platforms. As of March 31, 2026, we have released over 250 short film dramas on theSaltyTVapp. We expect a consistent roll out of new short film dramas. Short film dramas include internally produced and licensed films from external organizations.
Current wording
We continuously evaluate and invest in content strategy to improve and innovate our games and features and to develop current technological platforms. We are currently actively investing in expanding our gaming pipeline as well as developing media related to our gaming intellectual property. We also continue to invest to grow our micro-influencer platform,NOIZ, by attracting new influencers and brand customers. We have established a new division internally under the Interactive Films brand. This division will focus on creating content in the vertical short film segment of the digital entertainment market. The mobile application has already launched on iOS and Android platforms. As of June 30, 2026, we have released over 300 short film dramas on theSaltyTVapp. We expect a consistent roll out of new short film dramas. Short film dramas include internally produced and licensed films from external organizations.
Previous wording
We have experienced significant growth in our number of downloads over the last several years. We have sold 58.4 million units between January 1, 2016 and March 31, 2026. During the three months ended March 31, 2026, we sold 2.2 million units compared to 1.5 million in the three months ended March 31, 2025. Our video games provide highly engaging, differentiated entertainment experiences where the combination of challenge and progress drives player engagement, high average player times, and long-term franchise value. The success of our franchise hinges on our ability to keep our current players engaged while also growing our user base by innovating our platform and monetizing new offerings. The degree to which gamers are willing to engage with our platform is driven by our ability to create interactive and unique content that will enhance the game-play experience. We sell DLCs which are supplementary to our master games and expand the gaming universe to continuously evolve the game and retain players. Our master games are the base versions of a specific title, for example,ARK: Survival Evolved is our master game andARK: Genesis is a DLC.
Current wording
We have experienced significant growth in our number of downloads over the last several years. We have sold 60.4 million units between January 1, 2016 and June 30, 2026. During the three months ended June 30, 2026, we sold 2.0 million units compared to 2.1 million in the three months ended June 30, 2025. Our video games provide highly engaging, differentiated entertainment experiences where the combination of challenge and progress drives player engagement and long-term franchise value. The success of our franchise hinges on our ability to keep our current players engaged while also growing our user base by innovating our platform and monetizing new offerings. The degree to which gamers are willing to engage with our platform is driven by our ability to create interactive and unique content that will enhance the game-play experience. We sell DLCs which are supplementary to our master games and expand the gaming universe to continuously evolve the game and retain players. Our master games are the base versions of a specific title, for example,ARK: Survival Evolved is our master game andARK: Genesis is a DLC.
Previous wording
During the first quarter of 2026, we continued to execute on our multi-year expansion strategy for our foundationalARK franchise. Building upon the successful launch and reception ofARK: Lost Colony late last year, we outlined an ambitious roadmap consisting of four major downloadable content (DLC) expansions forARK: Survival Ascended in 2026 and three subsequent releases planned for 2027. We anticipate this cadence will provide significant revenue visibility. Upcoming scheduled releases in 2026 includeARK: Survival of the Fittest, ARK: Bob’s True Tales – Tides of Fortune, ARK: World Creator, andARK: Dragontopia.
Current wording
During the first quarter of 2026, we continued to execute on our multi-year expansion strategy for our foundationalARK franchise. Building upon the successful launch and reception ofARK: Lost Colony late last year, we outlined an ambitious roadmap consisting of four major downloadable content (DLC) expansions forARK: Survival Ascended in 2026 and three subsequent releases planned for 2027. We anticipate this cadence will provide significant revenue visibility. Upcoming scheduled releases in 2026 includeARK: Survival of the Fittest, ARK: Tides of Fortune, ARK: World Creator, andARK: Dragontopia.
Previous wording
A core component of our long-term growth strategy is diversifying our revenue profile beyond the ARK ecosystem by investing in internally developed.Bellwright, our medieval survival/strategy title, maintained strong momentum through the Steam Spring Sale and has officially surpassed 1 million units sold. We are actively developing console ports to further monetize this IP. As part of our ongoing initiative to expand our third-party publishing portfolio and diversify our revenue profile, on January 27, 2026, the Company, in partnership with developer Loric Games, successfully launchedEchoes of Elysium into Early Access on the Steam platform.
Current wording
A core component of our long-term growth strategy is diversifying our revenue profile beyond theARK ecosystem by investing in internally developed.Bellwright, our medieval survival/strategy title, maintained strong momentum through the Steam Spring Sale and has officially surpassed 1 million units sold. We are actively developing console ports to further monetize this IP. As part of our ongoing initiative to expand our third-party publishing portfolio and diversify our revenue profile, on January 27, 2026, the Company, in partnership with developer Loric Games, successfully launchedEchoes of Elysium into Early Access on the Steam platform.
Previous wording
At GDC 2026, we provided key updates regarding our product pipeline and unveiled new intellectual property. We provided an exclusive look at For the Stars, our upcoming open-universe AAA space survival RPG. The title continues to progress, with demonstrations of its open-ended exploration and player-driven research systems presented at the GDC Tech Demo Stage. We introduced PixARK Worlds, a new title in development by Studio Sirens and Snail Games, created with guidance from Studio Wildcard, featuring revolutionary user-generated content designed. In broadening our indie portfolio, we officially announced Gobby Gang, a new cooperative multiplayer party game on the Steam platform.
Current wording
At Game Developers Conference (“GDC”) 2026, we provided key updates regarding our product pipeline and unveiled new intellectual property. We provided an exclusive look atFor the Stars, our upcoming open-universe AAA space survival RPG. The title continues to progress, with demonstrations of its open-ended exploration and player-driven research systems presented at the GDC Tech Demo Stage. We introducedPixARK Worlds, a new title in development by Studio Sirens and Snail Games, created with guidance from Studio Wildcard, featuring revolutionary user-generated content designed. In broadening our indie portfolio, we officially announcedGobby Gang, a new cooperative multiplayer party game on the Steam platform.
Previous wording
We continue to build on our short film mobile application,SaltyTV, to bring more exclusive, original stories from heart-racing thrillers to jaw-dropping romances to our viewers. We have released over 250 short film dramas through March 31, 2026, on theSaltyTVapp. We expect a consistent roll out of new short film dramas throughout 2026 and beyond.
Current wording
We continue to build on our short film mobile application,SaltyTV, to bring more exclusive, original stories from heart-racing thrillers to jaw-dropping romances to our viewers. As of June 30, 2026, we have released over 300 short film dramas, on theSaltyTVapp. We expect a consistent roll out of new short film dramas throughout 2026 and beyond.
Previous wording
On April 6, 2026, we entered into Amendment No. 3 to the Amended and Restated Exclusive Software License Agreement (the “Amendment”) with SDE Inc., a California corporation (“SDE”) through our wholly-owned subsidiary, Snail Games USA, Inc. SDE is controlled by Ying Zhou, our director and the spouse of Hai Shi, our Chief Executive Officer, Chief Strategy Officer, Chairman of the Board and Founder. The Amendment amends that certain Amended and Restated Exclusive Software License Agreement, dated January 1, 2022, which was previously amended on December 13, 2022, March 10, 2023, and October 1, 2023 (as amended, the “ARK1 License Agreement”) pursuant to which we hold an exclusive worldwide license from SDE to publish and sell ARK: Survival Evolved (“ASE Game”) and ARK: Survival Ascended (“ASA Game”). The Amendment is effective as of April 1, 2026. Prior to the Amendment, the ARK1 License Agreement provided for us to pay to SDE (i) licensing fees of $2 million per month, provided that such obligation shall cease upon the public release of the sequel ARK 2; (ii) following the ASA Launch Date (as defined in the ARK1 License Agreement), royalties of 25% of our total revenue related to ASA Game and 40% of our total revenue related to ASE Game; and (iii) a one-time payment of $5 million upon the release of any DLC after October 1, 2023. The Amendment reduces the licensing fees to $1.5 million per month, provided that such obligation shall cease upon the public release of the sequel ARK 2, and replaces the one-time payment set forth above for each DLC with a one-time payment of $5 million upon the release of certain DLCs after October 1, 2023, excluding, among others, DLCs that were originally included in ASA Game.
Current wording
On April 6, 2026, we entered into Amendment No. 3 to the Amended and Restated Exclusive Software License Agreement (the “Amendment”) with SDE Inc., a California corporation (“SDE”) through our wholly-owned subsidiary, Snail Games USA, Inc. SDE is controlled by Ying Zhou, our director and the spouse of Hai Shi, our Chief Executive Officer, Chief Strategy Officer, Chairman of the Board and Founder. The Amendment amends that certain Amended and Restated Exclusive Software License Agreement, dated January 1, 2022, which was previously amended on December 13, 2022, March 10, 2023, and October 1, 2023 (as amended, the “ARK1 License Agreement”) pursuant to which we hold an exclusive worldwide license from SDE to publish and sellARK: Survival Evolved (“ASE Game”) andARK: Survival Ascended (“ASA Game”). The Amendment is effective as of April 1, 2026. Prior to the Amendment, the ARK1 License Agreement provided for us to pay to SDE (i) licensing fees of $2 million per month, provided that such obligation shall cease upon the public release of the sequel ARK 2; (ii) following the ASA Launch Date (as defined in the ARK1 License Agreement), royalties of 25% of our total revenue related to ASA Game and 40% of our total revenue related to ASE Game; and (iii) a one-time payment of $5 million upon the release of any DLC after October 1, 2023. The Amendment reduces the licensing fees to $1.5 million per month, provided that such obligation shall cease upon the public release of the sequelARK 2, and replaces the one-time payment set forth above for each DLC with a one-time payment of $5 million upon the release of certain DLCs after October 1, 2023, excluding, among others, DLCs that were originally included in ASA Game.
Previous wording
On April 6, 2026, we entered into a Software Development Outsourcing Agreement (the “Development Agreement”) with Suzhou Snail Digital Technology Co., Ltd. (“Suzhou Snail”) through our subsidiary Snail Games USA, Inc. Mr. Shi is the founder and a director of Suzhou Snail, and Ms. Zhou is a vice president and director of Suzhou Snail. The Development Agreement provides for Suzhou Snail to carry out technical development for our Project Aether game. We agreed to pay to Suzhou Snail an aggregate of $1.966 million in four quarterly installments of $491,500, beginning in the second quarter of 2026.
Current wording
On April 6, 2026, we entered into a Software Development Outsourcing Agreement (the “Development Agreement”) with Suzhou Snail Digital Technology Co., Ltd. (“Suzhou Snail”) through our subsidiary Snail Games USA, Inc. Mr. Shi is the founder and a director of Suzhou Snail, and Ms. Zhou is a vice president and director of Suzhou Snail. The Development Agreement provides for Suzhou Snail to carry out technical development for ourProject Aether game. We agreed to pay to Suzhou Snail an aggregate of $1.966 million in four quarterly installments of $491,500, beginning in the second quarter of 2026.
Previous wording
On December 30, 2025, we received written notice from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that for thirty (30) consecutive business days from November 11, 2025 through December 29, 2025, our Class A common stock did not maintain a minimum closing bid price of $1.00 per share (the “Minimum Bid Price Requirement”) as required by Nasdaq Listing Rule 5550(a)(2). The notice had no immediate effect on the listing or trading of our Class A common stock, and the Class A common stock continues to trade on The Nasdaq Capital Market under the symbol “SNAL.”
Current wording
On December 30, 2025, we received written notice from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that for thirty (30) consecutive business days from November 11, 2025 through December 29, 2025, our Class A common stock did not maintain a minimum closing bid price of $1.00 per share (the “Minimum Bid Price Requirement”) as required by Nasdaq Listing Rule 5550(a)(2). At that time, we were afforded 180 calendar days, or until June 29, 2026, to regain compliance with the Minimum Bid Price Requirement.
Previous wording
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a compliance period of 180 calendar days, or until June 29, 2026, to regain compliance with Nasdaq Listing Rule 5550(a)(2). Compliance may be achieved without further action if the closing bid price of our Class A common stock is at or above $1.00 for a minimum of ten (10) consecutive business days at any time during the 180-day compliance period, in which case Nasdaq will notify us if it determines it is in compliance and the matter will be closed; however, Nasdaq may require the closing bid price to equal or to exceed the $1.00 minimum bid price requirement for more than ten (10) consecutive business days before determining that a company complies.
Current wording
Compliance could have been achieved if the closing bid price of our Class A common stock were at or above $1.00 for a minimum of ten (10) consecutive business days at any time during the 180-day compliance period, although Nasdaq may require the closing bid price to equal or to exceed the $1.00 minimum bid price requirement for more than ten (10) consecutive business days before determining that a company complies.
Previous wording
On March 26, 2026, we received another deficiency letter (the “Letter”) from the Nasdaq Staff notifying us that we were not in compliance with the requirement to maintain a minimum of $500,000 in net income from continuing operations in the most recently completed fiscal year, or two of the last three fiscal years (the “Net Income Requirement”). In our Annual Reports on Form 10-K for the year ended December 31, 2023, 2024, and 2025, we reported net income from continuing operations in 2024 and net loss from continuing operations in 2025 and 2023. Additionally, we did not meet either of the alternative Nasdaq continued listing standards under the Nasdaq Listing Rules, which include (i) a market value of listed securities of at least $35 million or (ii) a minimum stockholders’ equity requirement of at least $2,500,000 (collectively with the Net Income Requirement, the “Nasdaq Requirements”).
Current wording
On March 26, 2026, we received another deficiency letter (the “Letter”) from the Nasdaq Staff notifying us that we were not in compliance with the requirement to maintain a minimum of $500,000 in net income from continuing operations in the most recently completed fiscal year, or two of the last three fiscal years (the “Net Income Requirement”). Although we reported net income from continuing operations in our Condensed Consolidated Statement of Operations for the year ended December 31, 2024, we reported net losses from continuing operations in our Condensed Consolidated Statements of Operations for the years ended December 31, 2023 and 2025. Additionally, we did not meet either of the alternative Nasdaq continued listing standards under the Nasdaq Listing Rules, which include (i) a market value of listed securities of at least $35 million or (ii) a minimum stockholders’ equity requirement of at least $2,500,000 (collectively with the Net Income Requirement, the “Nasdaq Requirements”).
Previous wording
The provision for income taxes consists of current income taxes in the various jurisdictions where we are subject to taxation, primarily the United States, as well as deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities in each of these jurisdictions for financial reporting purposes and the amounts used for income tax purposes. Under current U.S. tax law, the federal statutory tax rate applicable to corporations is 21%. Our effective tax rate of 5% differed from the federal statutory tax rate of 21% primarily due to state income taxes, permanent differences, and change in valuation allowance.
Current wording
The provision for income taxes consists of current income taxes in the various jurisdictions where we are subject to taxation, primarily the United States, as well as deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities in each of these jurisdictions for financial reporting purposes and the amounts used for income tax purposes. Under current U.S. tax law, the federal statutory tax rate applicable to corporations is 21%. Our effective tax rate of 3.7% differed from the federal statutory tax rate of 21% primarily due to state income taxes, permanent differences, and change in valuation allowance.
Previous wording
Net revenues for the three months ended March 31, 2026 increased by $7.2 million, or 35.7%, compared to the three months ended March 31, 2025. Total revenue increased by $7.2 million primarily attributed to a $4.2 million increase fromARK: Survival Ascended,an increase in revenues related toBellwrightof $2.1 million, and an increase in deferred revenues recognized of $2.5 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase in revenue was partially offset by a decrease in revenue fromARK: Ultimate Mobile Editionof $0.8 million and a decrease in revenue fromARK: Survival Evolved of $0.8 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
Net revenues for the three months ended June 30, 2026 decreased by $2.5 million, or 11.3%, compared to the three months ended June 30, 2025. Net revenue decreased by $2.5 million primarily attributed to a $4.2 million decrease in sales fromARK: Survival Ascended,a decrease of $1.8 million in sales fromARK: Survival Evolved, a decrease of $0.4 million inARK: Ultimate Mobile Edition,a decrease of $0.2 million fromSaltyTV and a decrease of $0.2 million of other various titles. The decrease in revenue was partially offset by an increase in revenues related toBellwrightof $1.5 million, and $2.8 million change in deferred revenues for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.
Previous wording
Cost of revenues for the three months ended March 31, 2026 increased by $1.4 million, or 9.6% when compared to the three months ended March 31, 2025, primarily due to higher licensed royalties costs driven by a growth in revenue during the period.
Current wording
Cost of revenues for the three months ended June 30, 2026 decreased by $3.2 million, or 21.3% when compared to the three months ended June 30, 2025, primarily due to lower license royalties costs driven by a decrease in revenue during the period and a reduction in monthly licensing cost to SDE.
Previous wording
Research and development expenses for the three months ended March 31, 2026 increased by $0.4 million, or 11.2%, compared to the three months ended March 31, 2025. The increase in research and development expenses was due to an increase in internal research and development salaries as the Company continues to expand its internal development team*.*
Current wording
Research and development expenses for the three months ended June 30, 2026 increased by $1.2 million, or 35.2%, compared to the three months ended June 30, 2025. The increase in research and development expenses was due to an increase in internal research and development salaries as the Company continues to expand its internal development team*.*
Previous wording
Advertising and marketing expenses for the three months ended March 31, 2026 decreased by $0.4 million, or 33.5%, compared to the three months ended March 31, 2025. The decrease in advertising and marketing expenses was primarily attributable to lower costs associated with the Company’s presence at Game Developers Conference (“GDC”).
Current wording
Advertising and marketing expenses for the three months ended June 30, 2026 decreased by $0.7 million, or 46.4%, compared to the three months ended June 30, 2025. The decrease in advertising and marketing expenses was primarily attributable to large promotional costs related to the launch ofARK: Aquatica and higher marketing costs forSaltyTV application in 2025.
Previous wording
Other income was $0.4 million and $0.8 million for the three months ended March 31, 2026 and 2025, respectively. There was a decrease in the revaluation of convertible notes of $0.2 million and a decrease in the revaluation of warrant liabilities of $0.2 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
Other expense was $0.4 million and $0.7 million for the three months ended June 30, 2026 and 2025, respectively. There was a decrease in the revaluation of convertible notes of $0.1 million and a decrease in the revaluation of warrant liabilities of $0.2 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous wording
The Company had an income tax provision of $0.1 million and an income tax benefit of $1.5 million for the three months ended March 31, 2026 and 2025, respectively. This is primarily due to the utilization of net operating loss carryforwards during three months ended March 31, 2026, compared to being in a net loss position during the three months ended March 31, 2025. Our effective income tax rate was 5% and 43% during the three months ended March 31, 2026 and 2025, respectively.
Current wording
The Company had an income tax benefit of $0.1 million and an income tax provision of $13.9 million for the three months ended June 30, 2026 and 2025, respectively. This is primarily due to the impact of the valuation allowance recorded against U.S. net deferred tax assets in 2025. Our effective income tax rate was 4% and (515%) during the three months ended June 30, 2026 and 2025, respectively.
Previous wording
Cost of revenues for the three months ended March 31, 2026 was due to an increase of $1.1 million in software license royalties – related parties, resulting from increasedARKsales, an increase in license and amortization– related party of $0.3 million due to the release of DLCLost Colony, an increase in license and amortization of $0.1 million primarily due to a larger depreciable base, and an increase in engine fees of $0.2 million, partially offset by a decrease in merchant fees of $0.2 million related toARK: Ultimate Mobile Editionrevenues.
Current wording
The decrease in cost of revenues for the six months ended June 30, 2026 is due to a decrease of $0.2 million in software license royalties – related parties, a result of decreasedARKrevenues, a decrease of $1.0 million in licensing fees – related party due to decreased licensing costs to SDE, a decrease in license and amortization of $0.1 million primarily due to a lower depreciable base, a decrease in merchant fees of $0.4 million related to a reduction inARK: Ultimate Mobile Editionrevenues, a decrease of $0.2 million in internet, server and data center, partially offset by an increase in engine fees of $0.1 million.
Previous wording
General and administrative expenses for the three months ended March 31, 2026 decreased by $0.3 million, or 6.3%, compared to the three months ended March 31, 2025. The decrease in general and administrative expenses was due to a decrease in salaries and wages of $0.6 million and a decrease in rent expense of $0.1 million, partially offset by an increase in contractors expense of $0.4 million.
Current wording
General and administrative expenses for the six months ended June 30, 2026 increased by $1.2 million, or 14.1%, compared to the six months ended June 30, 2025. The increase in general and administrative expenses was due to larger contractors expense of $0.7 million, an increase in office expense of $0.2 million, an increase in legal and professional fees of $0.2 million, an increase in public company expenses of $0.2 million, partially offset by a decrease in rent expense of $0.3 million.
Previous wording
Impairment of film assets for the three months ended March 31, 2026 increased by $0.1 million, or 100.0%, compared to the three months ended March 31, 2025. The increase in impairment of film assets was due to the underperformance of specific film assets and changes in the market conditions affecting expected future cash flow during the three months ended March 31, 2026.
Current wording
Impairment of film assets for the six months ended June 30, 2026 decreased by $0.2 million, or 60.1%, compared to the six months ended June 30, 2025. The decrease in impairment of film assets was due to the Company’s underperformance of two films during the six months ended June 30, 2026 compared to the underperformance of four films and changes in the market conditions affecting expected future cash flow during the six months ended June 30, 2025.
Previous wording
Interest expense primarily related to our outstanding indebtedness with third-party lenders. Interest expense increased slightly for the three months ended March 31, 2026 due to the increased average debt during the three months ended March 31, 2026.
Current wording
Interest expense primarily related to our outstanding indebtedness with third-party lenders. Interest expense increased by $0.1 million for the six months ended June 30, 2026 because of higher average debt during the six months ended June 30, 2026.
Previous wording
Units sold increased during the three months ended March 31, 2026, by 0.7 million units or 42.6%, as compared to the three months ended March 31, 2025. The Company’s units sold increased due to sales ofARK franchise IPs by 0.5 million units and an increase in sales ofBellwrightof 0.2 million units.
Current wording
Units sold decreased during the three months ended June 30, 2026, by 0.1 million units or 7.1%, as compared to the three months ended June 30, 2025. The Company’s units sold decreased due to decreased sales ofARK franchise IPs by 0.2 million units, partially offset by an increase in sales ofBellwrightof 0.1 million units. Units sold increased during the six months ended June 30, 2026, by 0.5 million units or 13.8% as compared to the six months ended June 30, 2025. The Company’s units sold increased due to the sale ofARK: Survival Ascended of 1.0 million units and an increase in sales ofBellwrightof 0.2 million units, partially offset by a decrease in sales ofARK: Survival Evolved of 0.7 million units.
Previous wording
We define EBITDA as net income (loss) before (i) interest expense, (ii) provision for (benefit from) income taxes, and (iii) depreciation expense, property and equipment.
Current wording
We define EBITDA as net loss before (i) interest expense, (ii) provision for (benefit from) income taxes, and (iii) depreciation expense, property and equipment.
Previous wording
Below is a reconciliation of net income (loss) to EBITDA, the closest GAAP financial measure.
Current wording
Below is a reconciliation of net loss to EBITDA, the closest GAAP financial measure.
Previous wording
For the three months ended March 31, 2026, EBITDA increased by $5.7 million, or 173.3%, compared to the three months ended March 31, 2025, primarily because of an increase in net income of $4.1 million and a decrease in the benefit from income taxes of $1.6 million.
Current wording
For the six months ended June 30, 2026, EBITDA increased by $5.2 million, or 88.8%, compared to the six months ended June 30, 2025, primarily due to a decrease in net loss of $17.6 million, partially offset by a decrease in provision for income taxes of $12.4 million.
Previous wording
Our primary sources of liquidity are the cash flows generated from our operations, that are currently available as unrestricted cash. Our unrestricted cash was $14.3 million and $8.6 million as of March 31, 2026 and December 31, 2025, respectively.
Current wording
Our primary sources of liquidity are the cash flows generated from our operations, that are currently available as unrestricted cash. Our unrestricted cash was $13.3 million and $8.6 million as of June 30, 2026 and December 31, 2025, respectively.
Previous wording
Our restricted cash and cash equivalents were $1.9 and $1.9 million as of March 31, 2026 and December 31, 2025, respectively. Our restricted cash primarily consists of time deposits and is used to secure standby letters of credit with certain of our landlords and hold collateral in reserve related to our revolving line of credit.
Current wording
Our restricted cash and cash equivalents were $2.3 million and $1.9 million as of June 30, 2026 and December 31, 2025, respectively. Our restricted cash primarily consists of time deposits and is used to secure standby letters of credit with certain of our landlords and insurance providers, and to hold collateral in reserve related to our revolving line of credit.
Previous wording
The Company has raised capital through the issuance of the convertible notes and the distribution agreement entered into with our retail partner which provided advanced royalties. We may need to raise additional capital and issue registered shares to draw on an equity line of credit if needed. The need for additional capital depends on many factors, including, among other things, whether we can successfully renegotiate the terms of our debt arrangements, the rate at which our business grows, demands for working capital, revenue generated from existing DLCs and game titles and launches of new DLCs and new game titles, and any acquisitions that we may pursue. From time to time, we could be required, or may otherwise attempt, to seek additional sources of capital, including, but not limited to, equity and/or debt financings. We cannot provide assurance that we will be able to successfully access any such equity or debt financings, that the required equity or debt financings would be available on terms acceptable to us, if at all, or that any such financings would not be dilutive to our stockholders.
Current wording
The Company has raised capital through the issuance of the convertible notes and shares of Class A common stock and through the distribution agreement entered into with our retail partner which provided advanced royalties. The need for additional capital depends on many factors, including, among other things, whether we can successfully renegotiate the terms of our debt arrangements, the rate at which our business grows, demands for working capital, revenue generated from existing DLCs and game titles and launches of new DLCs and new game titles, and any acquisitions that we may pursue. From time to time, we could be required, or may otherwise attempt, to seek additional sources of capital, including, but not limited to, equity and/or debt financings. We cannot provide assurance that we will be able to successfully access any such equity or debt financings, that the required equity or debt financings would be available on terms acceptable to us, if at all, or that any such financings would not be dilutive to our stockholders.
Previous wording
Our current unrestricted cash position of approximately $14.3 million, and our expected revenue receipts will allow the Company to continue operations beyond the next 12 months and service its current debts.
Current wording
Our current unrestricted cash position of approximately $13.3 million, and our expected revenue receipts will allow the Company to continue operations beyond the next 12 months and service its current debts.
Previous wording
Net cash flows provided by operating activities for the three months ended March 31, 2026 increased by $9.4 million as compared to the three months ended March 31, 2025, which resulted primarily from an increase in net income of $4.2 million, an increase in prepaid taxes of $3.6 million, an increase in deferred taxes of $2.0 million, an increase in accrued expenses and other liabilities of $1.1 million and an increase in prepaid expenses related party and prepaid expenses and other current assets of $1.0 million, partially offset by a decrease in deferred revenue of $2.5 million.
Current wording
Net cash flows provided by operating activities for the six months ended June 30, 2026 increased by $9.3 million as compared to the six months ended June 30, 2025, which resulted primarily from an increase in net income of $17.6 million, an increase in accounts receivable and accounts receivable– related party of $7.2 million, an increase in prepaid taxes of $2.5 million, an increase in prepaid expenses related party and prepaid expenses and other current assets of $1.4 million, and an increase in other noncurrent assets of $0.4 million. This was partially offset by a decrease in deferred taxes of $10.8 million, a decrease in deferred revenue of $5.3 million, and a decrease in accounts payable and accounts payable – related parties of $4.2 million.
Previous wording
The Company had a net income of $2.1 million and net loss of $1.9 million, for the three months ended March 31, 2026 and 2025, respectively, representing an increase of $4.0 million. The increase was primarily due to an increase in revenue of $7.2 million and a decrease in total operating expense of $0.3 million, partially offset by an increase in provision for income taxes of $1.6 million, an increase in cost of revenues of $1.4 million and a decrease in total other income of $0.5 million
Current wording
The Company had a net loss of $0.9 million and $18.5 million, for the six months ended June 30, 2026 and 2025, respectively, representing an increase of $17.6 million. The increase was primarily due to a decrease in the provision of income taxes of $12.4 million, an increase in revenue of $4.7 million, a decrease in cost of revenue of $2.0 million, partially offset by an increase in general and administrative expense of $1.2 million.
Previous wording
Non-cash reconciling items were $0.3 million and ($1.6) million for the three months ended March 31, 2026 and 2025, respectively, representing an increase of $1.9 million. The increase in the non-cash reconciling items was due to an increase in deferred taxes of $2.0 million, an increase in amortization expense of $0.3 million, a decrease in the gain of change in fair value of warrant liabilities of $0.2 million and an increase in the loss on change in fair value of convertible notes of $0.2 million, partially offset by a decrease in stock compensation expense of $0.8 million.
Current wording
Non-cash reconciling items were $0.1 million and $12.3 million for the six months ended June 30, 2026 and 2025, respectively, representing a decrease of $12.2 million. The decrease in the non-cash reconciling items was due to a decrease in deferred taxes of $10.8 million, a decrease in impairment expenses of $0.2 million, a decrease in depreciation expense of $0.1 million, and a decrease in stock based compensation expense of $0.2 million; partially offset by an increase in amortization expense of $0.3 million.
Previous wording
Net cash flows used in investing activities for the three months ended March 31, 2026 were $0.2 million compared to $1.9 million in the three months ended March 31, 2025. Investing activities for the three months ended March 31, 2026 included $0.2 million for the acquisition of license rights to certain titles that are capitalized as research and development expenditures to be sold or marketed. Investing activities for the three months ended March 31, 2025 included $0.3 million for the acquisition of software applications, $1.4 million for the acquisition of license rights to certain titles, and $0.2 million in capitalized research and development expenditures for the development of software to be sold or marketed.
Current wording
Net cash flows used in investing activities for the six months ended June 30, 2026 were $0.3 million compared to $3.0 million in the six months ended June 30, 2025. Investing activities for the six months ended June 30, 2026 included $0.3 million for the acquisition of license rights to certain titles that are capitalized as research and development expenditures to be sold or marketed. Investing activities for the six months ended June 30, 2025 included $0.3 million for the acquisition of software applications, $2.0 million for the acquisition of license rights to certain titles, and $0.7 million in capitalized research and development expenditures for the development of software to be sold or marketed.
Previous wording
Net cash flows (used in) provided by financing activities for the three months ended March 31, 2026 were ($4.3) million compared to $3.1 million for the three months ended March 31, 2025. Financing activities for the three months ended March 31, 2026 included a $2.5 million repayment on the 2021 Revolving Loan, $1.5 million repayment on the February 2025, October 2025 and November 2025 Convertible Notes and a $0.3 million repayment on the 2021 Promissory Note and 2025 Term Loan. Financing activities for the three months ended March 31, 2025 included $3.0 million from the issuance of convertible notes and $0.2 million received upon the exercise of warrants during the period.
Current wording
Net cash flows (used in) provided by financing activities for the six months ended June 30, 2026 were $1.4 million compared to $6.0 million for the six months ended June 30, 2025. Financing activities for the six months ended June 30, 2026 included a $2.5 million repayment on the 2021 Revolving Loan, $2.5 million repayment on the February 2025, October 2025 and November 2025 Convertible Notes and a $0.6 million repayment on the 2021 Promissory Note and 2025 Term Loan, partially offset by the At-The-Market common stock offering of $4.2 million. Financing activities for the six months ended June 30, 2025 included $3.0 million from the issuance of convertible notes, $3.5 million obtained from the new term loan, and $0.2 million received upon the exercise of warrants during the period. This was partially offset by the repayments of the convertible notes of $0.6 million.
Previous wording
In September 2024, we filed a universal shelf Registration Statement on Form S-3 that registered $50,000,000 of any combination of our Class A common stock, preferred stock, debt securities, warrants or units described therein, either individually or in combination with other securities. The “shelf” Registration Statement was declared effective on September 20, 2024 and was used to register pursuant to a prospectus supplement, dated August 7, 2025, to the “shelf” Registration Statement for the potential sale of up to $4.5 million of shares of our Class A common stock in the “at the market offering” program with Wainwright.
Current wording
In September 2024, we filed a universal shelf Registration Statement on Form S-3 that registered $50,000,000 of any combination of our Class A common stock, preferred stock, debt securities, warrants or units described therein, either individually or in combination with other securities. The “shelf” Registration Statement was declared effective on September 20, 2024 and was used to register pursuant to a prospectus supplement, dated August 7, 2025, to the “shelf” Registration Statement for the potential sale of shares of our Class A common stock in the “at the market offering” program with Wainwright.
Previous wording
On December 15, 2025, we filed a Registration Statement on Form S-1 with the SEC registering shares of our Class A common stock underlying two convertible notes issued in the aggregate principal amount of $3.3 million. The first note, issued October 24, 2025, has a principal amount of $2.2 million for proceeds of $2.0 million, bears a 5% interest rate, repayable in 10 monthly installments starting January 24, 2026 and maturing October 24, 2026. The second note, issued November 26, 2025, has a principal amount of $1.1 million for proceeds of $1.0 million, bears a 5% interest rate, repayable in 10 monthly installments starting February 26, 2026 and maturing November 26, 2026. These notes are convertible into Class A common stock at $5.00 per share, subject to certain exceptions as discussed below.
Current wording
On December 15, 2025, we filed a Registration Statement on Form S-1 with the SEC registering shares of our Class A common stock underlying two convertible notes issued in the aggregate principal amount of $3.3 million. The first note, issued October 24, 2025, has a principal amount of $2.2 million for proceeds of $2.0 million, bears a 5% interest rate, repayable in 10 monthly installments starting January 24, 2026 and maturing October 24, 2026. The second note, issued November 26, 2025, has a principal amount of $1.1 million for proceeds of $1.0 million, bears a 5% interest rate, repayable in 10 monthly installments starting February 26, 2026 and maturing November 26, 2026. These notes are convertible into Class A common stock at $25.00 per share, subject to certain exceptions as discussed below.
Previous wording
In February 2025, we issued convertible notes (the “February 2025 Convertible Notes”) with an aggregate principal amount of $3,300,000 for gross proceeds of $3,000,000. The February 2025 Convertible Notes, which matured on February 21, 2026, carried an original issue discount of 10%, and were subject to a guaranteed interest equal to 5% of the principal amount. The principal and interest charges were payable in 10 equal monthly payments starting May 21, 2025. We have accounted for the convertible notes at fair value. As of February 28, 2026, the February 2025 Convertible Notes have been fully repaid and no amounts remain outstanding.
Current wording
In February 2025, we issued convertible notes (the “February 2025 Convertible Notes”) with an aggregate principal amount of $3,300,000 for gross proceeds of $3,000,000. The February 2025 Convertible Notes, which matured on February 21, 2026, carried an original issue discount of 10%, and were subject to a guaranteed interest equal to 5% of the principal amount. The principal and interest charges were payable in 10 equal monthly payments starting May 21, 2025. We have accounted for the convertible notes at fair value. As of February 28, 2026, the February 2025 Convertible Notes have been fully repaid and no amounts remain outstanding thereafter.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
A core component of our long-term growth strategy is diversifying our revenue profile beyond theARK ecosystem by investing in internally developed and third-party titles.Bellwright, our medieval survival strategy title, maintained its strong PC momentum and officially expanded its market reach with a launch on PlayStation and Xbox consoles on June 9, 2026.
Current report — wording carried from elsewhere
Interest expense primarily related to our outstanding indebtedness with third-party lenders. Interest expense remained relatively consistent for the three months ended June 30, 2026, due to the lower outstanding debt following the conversion of the October 2025 Convertible Note and November 2025 Convertible Notes during the second quarter of 2026.
Current report — wording carried from elsewhere
Cost of revenues for the six months ended June 30, 2026 and 2025 comprised the following:
Current report — wording carried from elsewhere
Research and development expenses for the six months ended June 30, 2026 increased by $1.6 million, or 22.7%, compared to the six months ended June 30, 2025. The increase in research and development expenses was due to the outsourced development ofFor the StarsandNine Yin Sutra: Immortalpaid through Suzhou Snail and an increase in internal research and development salaries as the Company continues to expand its internal development team*.*
Current report — wording carried from elsewhere
Other Factors Affecting Net Income (Loss)