System1 Inc

The following is a summary of the principal risks described below in “Item 1A. Risk Factors” included in this Annual Report on Form 10-K. We believe that the risks described in the “Risk Factors” section are material to investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and the other information contained in this Annual Report on Form 10-K.

•We have a limited operating history, which makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment.

•Our revenue is tied to the effectiveness and performance of our responsive acquisition marketing platform (RAMP).

•A meaningful portion of our revenue is attributable to our agreements with Google, and therefore is subject to its practices, policies and requirements, which evolve over time as the industry changes.

•We rely on large-scale acquisition marketing channels, such as Google, Facebook, Zemanta, Taboola, and TikTok, as well as our network partners, for a significant portion of our consumer Internet traffic.

•We identified material weaknesses in our internal control over financial reporting. If we are unable to remediate the material weaknesses, or if other material weaknesses are identified, we may not be able to report our financial results accurately, prevent or detect material misstatements due to fraud or error, or file our periodic reports as a public company in a timely manner.

•If we fail to maintain effective internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations. If our internal control over financial reporting is not effective, it may adversely affect investor confidence in us and the price of our common stock.

•A significant portion of our assets consists of other intangible assets, the value of which may be reduced if we determine that those assets are impaired.

•Operational and performance issues with our RAMP platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems, may adversely affect our business, financial condition and operating results.

•We operate in a highly competitive environment. If we fail to innovate and make the right investment decisions in our offerings and RAMP platform, we may not attract and retain advertisers or network partners, and our competitors may gain market share in the markets for our solutions that could adversely affect our business and cause our revenue and results of operations to decline.

•We compete for advertising spend from our advertisers, and if we are unable to maintain or increase our share of the advertising spend of our advertisers, our business could be harmed.

•Our advertising business is dependent on advertisers buying mobile, display and video advertising. A decrease in the use of these advertising channels would harm our business, growth prospects, financial condition and results of operations.

•Unfavorable global economic conditions, including as a result of health and safety concerns related to a public health crisis, could adversely affect our business, financial condition or results of operations.

•We may experience outages and disruptions on RAMP, our websites and other software products if we fail to maintain adequate security and supporting infrastructure as we scale our businesses and service offerings, which may harm our reputation and negatively impact our business, financial condition and operating results.

•We depend on search engines, display advertising, social media, email, content-based online advertising and other online sources to attract consumers to our owned & operated websites and have them successfully convert into sales for our advertisers. If we are unable to drive consumer traffic cost-effectively, or if there is a decline in the supply of media available through these websites, our business and financial results may be harmed.

•We depend on third-party website publishers for a significant portion of our visitors, and any decline in the supply of media available through these websites or increase in the price of this media could cause our revenue to decline or our cost to reach visitors to increase.

•Our failure to meet content and referral source standards and provide services that our advertisers and inventory suppliers trust could harm our brand and reputation and negatively impact our business, financial condition and operating results.

•If the non-proprietary technology, software, products and services that we use are unavailable, have future terms we cannot agree to, or do not perform as we expect, our business, financial condition and operating results could be harmed.

•Privacy and data protection laws to which we are subject may cause us to incur additional or unexpected costs, subject us to enforcement actions for compliance failures, or cause us to change our business model or how our RAMP platform functions, which may have a material adverse effect on our business and service offerings.

•In certain circumstances, we typically collect and store IP addresses, other device identifiers (such as unique mobile application identifiers) and email addresses, which are or may be considered personal data or personal information in some jurisdictions or otherwise may be the subject of regulation.

•Our success depends, in part, on our ability to collect, process and use first-party data about our end users. If that access is restricted or otherwise subject to unfavorable regulation, blocked or limited by technical changes on end users’ devices and/or web browsers, or our ability to use this type of data to continue to optimize RAMP is otherwise restricted, our performance may decline and we may lose advertisers and revenue.

•Our proprietary rights may be difficult to enforce, which could enable others to copy or use aspects of our technology without compensating us, thereby eroding our competitive advantages and harming our business.

•We face potential liability and harm to our business based on the nature of our business and the content on RAMP.

•You may only be able to exercise the Public Warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of common stock from such exercise than if you were to exercise such Warrants for cash.

•We may amend the terms of the Warrants in a manner that may have an adverse effect on holders of Public Warrants with the approval by the holders of at least 50% of the then outstanding Public Warrants. As a result, the exercise price of your Warrants could be increased, the exercise period could be shortened and the number of shares of common stock purchasable upon exercise of a Warrant could be decreased, all without your approval.

•Our Warrant Agreement designates the courts of the State of New York or the U.S. District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of the Warrants, which could limit the ability of Warrant holders to obtain a favorable judicial forum for disputes with us.

•We may redeem your unexpired Warrants prior to when holders seek to exercise them,which may be at a time that is disadvantageous to you, thereby making your Warrants worth less than what you paid for them.

Part I