PAAI

New in FY2025

• References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
• See the section entitled “Cautionary Statement Regarding Forward-Looking Information.” All dollar figures are presented in thousands unless otherwise stated.
• We believe that recent algorithm changes adversely affected traffic and revenue performance during the year ended December 31, 2025 and similar changes could impact future periods.
• We rely on content created by Expert Contributors to attract users that drive advertising and subscription revenue.
• The tariffs by the U.S. government on product imports from certain countries may result in an outsize impact on certain industries that are key advertising categories for us, including automotive and consumer goods.
• We and our third party service providers experience attempted cyber-attacks of varying degrees on a regular basis.
• As discussed in Item 9A of this Annual Report on Form 10-K, in the course of preparing our financial statements, we identified a material weakness in our internal control over financial reporting: we did not design and maintain effective controls over the completeness and accuracy of information received from a third-party programmatic advertising services provider used in recording certain advertising revenues.
• As a result of the identified material weakness, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025.
• The material weakness identified in Item 9A of this Annual Report on Form 10-K did not result in any misstatement of our financial statements.
• Although our management is currently undertaking remedial actions to address the material weakness identified as of December 31, 2025, we may in the future discover material weaknesses in other areas of our internal control over financial reporting that require remediation.
• We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiency that led to the material weakness in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses.
• In addition, we are required to engage independent auditors to express an opinion on internal control over financial reporting.
• Our future liquidity and capital requirements will depend upon numerous factors, including the success of our business, our offerings, competing technological developments, and general economic and market conditions, which have presented substantial uncertainty in recent months.
• Debt financing, if available, may involve restrictive covenants that may limit our operating flexibility with respect to certain business matters.
• In addition, our previously effective shelf registration statement on Form S-3 expired in December 2025.
• As a result, we currently do not have an effective general purpose shelf registration statement on file with the Securities and Exchange Commission, which may further limit our ability to raise capital through public offerings in a timely manner.
• While we may seek to file a new registration statement, there can be no assurance as to when it will become effective or whether market conditions will be favorable for future offerings.
• Furthermore, any equity financing could be dilutive to existing stockholders.
• Although we achieved income from continuing operations of $28.6 million in 2025, our accumulated deficit as of December 31, 2025 remains substantial at $354.5 million, reflecting our historical losses.
• If we are unable to sustain revenue growth or further reduce costs, we may return to operating losses, which could require us to seek additional capital.
• There is no assurance that such capital will be available on favorable terms, or at all, which could adversely affect our ability to execute our business strategy and maintain operations.
• We may not be able to sustain current growth rates, current revenue levels, or sustain profitability.
• We expect to face challenges, risks, and difficulties frequently experienced by growing companies in rapidly developing industries, including those relating to: • changes in demand and pricing for our products, services and the Platform; • developing, maintaining, and expanding relationships with Expert Contributors, Publisher Partners and advertisers; • innovating and developing new solutions that are adopted by and meet the needs of Publisher Partners and advertisers; • competing against companies with a larger user and customer base or greater financial or technical resources; • changes in the pricing policies of Publisher Partners, advertisers and competitors; • changes in our access to valuable user data; • costs to develop and upgrade the Platform to incorporate new technologies; • costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; • seasonality in our business; • the length and complexity of our sales cycles; • the timing of stock-based compensation expense; • potential costs to attract, onboard, retain and motivate qualified personnel; • responding to evolving industry standards and government regulations that impact our business, particularly in the areas of data protection and consumer privacy; • changes in demand as a result of changes in the macroeconomic environment, as a result of inflation, changes in interest rates or foreign exchange rates, or otherwise; and • further expanding our business in other markets.
• As of December 31, 2025 , we had federal net operating loss carryforwards, or NOLs, due to prior period losses of approximately $193.5 million , and certain NOLs could expire before we generate sufficient taxable income to make use of our NOLs.
• We cannot guarantee that we will repurchase shares of our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value.
• Repurchases of shares of our common stock could also increase the volatility of the price of our common stock and could diminish our cash reserves.
• On July 31, 2025, we announced a share repurchase program under which we may repurchase up to 3 million shares of our common stock over the next 12 months.
• The timing and amount of repurchases of shares of our common stock, if any, will depend upon several factors, such as the market price of the common stock, corporate requirements, general market economic conditions and applicable legal requirements.
• We are not obligated to repurchase any specific number or amount of shares of common stock pursuant to the program, and we may suspend, modify or terminate the program at any time.
• Repurchases of shares of our common stock pursuant to the program could affect the price of shares of our common stock and increase its volatility.
• The existence of the program could cause the price of shares of our common stock to be higher than it would be in the absence of such a program and, if shares are repurchased in the program, it will reduce the market liquidity for our shares of common stock.
• Additionally, the program could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities.
• There can be no assurance that any share repurchases will enhance long-term shareholder value, and the market price of our shares of common stock may decline below the levels at which we repurchased shares of our common stock.

Gone since FY2024

• See the section entitled “Cautionary Statement Regarding Forward-Looking Statements.” All dollar figures are presented in thousands unless otherwise stated.
• Our license agreement to operate the Sports Illustrated media business was terminated by the licensor, which may materially harm our business, operating results and financial condition.
• As described in Note 25, Commitments and Contingencies , to our accompanying consolidated financial statements under Item 8 of this Annual Report, ABG-SI, LLC (“ABG”) has alleged that we failed to make a quarterly payment due to ABG pursuant to the Licensing Agreement, dated June 14, 2019, with ABG (“Licensing Agreement”) of approximately $3.8 million, and on January 18, 2024, ABG notified us of the termination of the Licensing Agreement, effective immediately, in accordance with its rights under the Licensing Agreement.
• As stated in the notice of termination, ABG believes that a fee of $45.0 million became immediately due and payable by us to ABG pursuant to the terms and conditions of the Licensing Agreement.
• In addition, upon termination of the Licensing Agreement, all outstanding and unvested warrants to purchase shares of Arena common stock issued to ABG in connection with the Licensing Agreement became immediately vested and exercisable.
• On March 18, 2024, ABG announced it had reached an agreement in principle with a third party to become the new operator of the Sports Illustrated media business.
• On April 1, 2024, ABG Group filed an action against us and Manoj Bhargava, the former interim CEO of the Company and a principal stockholder, alleging, among other things, breach of contract in the United States District Court of the Southern District of New York seeking damages in the amount of $48.8 million ($3.8 million royalty fee liability and $45.0 million termination fee liability as reflected in current liabilities from discontinued operations).
• See Item 3 of this Annual Report and Note 25, Commitments and Contingencies , to our accompanying consolidated financial statements under Item 8 of this Annual Report for additional information.
• The loss of the rights to operate the Sports Illustrated media business, in addition to the alleged and disputed termination payments that are due following termination of the Licensing Agreement, could harm our competitiveness in our industry, damage any goodwill we may have generated, and otherwise have a material adverse effect on our business, operating results and financial condition.
• Any subsequent rebranding efforts we may undertake may require significant resources and expenses and may affect our ability to attract and retain customers, all of which may have a material adverse effect on our business, contracts, financial condition, operating results, liquidity and prospects.
• We rely on content contributed by third party providers to attract users that drive advertising and subscription revenue.
• The recently announced tariffs by the U.S. government on product imports from certain countries may result in an outsize impact on certain industries that are key advertising categories for us, including automotive and consumer goods.
• We and our third party service providers experience attempted cyber-attacks of varying degrees on a regular basis, one of which infiltrated our systems and accessed a limited amount of our non-financial and encrypted data.
• As discussed in Item 9A of this Annual Report on Form 10-K, in the course of preparing our financial statements, we identified the following material weaknesses in our internal control over financial reporting (i) our finance and accounting policies, including those governing revenue recognition, expense recognition, and balance sheet valuation principles and methodologies, have not been fully documented; and (ii) we did not maintain a sufficient system of internal controls to validate data provided by certain third party service providers.
• As a result of the identified material weaknesses, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024.
• The material weaknesses identified in Item 9A of this Annual Report on Form 10-K did not result in any misstatement of our financial statements.
• Our management is currently undertaking remedial actions to address the material weaknesses identified as of December 31, 2024.
• However, we may in the future discover material weaknesses in other areas of our internal control over financial reporting that require remediation.
• We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to the material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses.
• Our future liquidity and capital requirements will depend upon numerous factors, including the success of the Platform, our offerings, competing technological developments, and general economic and market conditions, which have presented substantial uncertainty in recent months.
• Furthermore, any equity financing will be dilutive to existing stockholders, and debt financing, if available, may involve restrictive covenants that may limit our operating flexibility with respect to certain business matters.
• In the year ended December 31, 2024 , we had net loss of approximately $100.7 million compared to approximately $55.6 million for the year ended December 31, 2023.
• Our accumulated deficit as of December 31, 2024 was approximately $479.4 million compared to approximately $378.7 million as of December 31, 2023.
• We may continue to incur losses in the future if we do not achieve sufficient revenue or adequately reduce costs to achieve and maintain profitability.
• There is no assurance that our operations will generate sufficient cash flows to support our continued operations in the future without needing to seek additional capital funding or borrowings.
• We can provide no assurance that if we need to seek such additional outside capital that it will be available on favorable terms or at all.
• Any failure to achieve and maintain profitability could have a materially adverse effect on our ability to implement our business plan, our results and operations, and our financial condition.
• Our financial condition raises substantial doubt about our ability to continue as a “going concern” through one year from the date of the issuance of the financial statements contained herein due to the recurrence of net losses.
• For the year ended December 31, 2024, we incurred a net loss from continuing operations of approximately $7.7 million, and as of December 31, 2024, had cash on hand of approximately $4.4 million.
• Management has evaluated our current and historical net losses from continuing operations to determine if the significance of those conditions or events would limit our ability to meet our obligations when due, including under the Loan Documents and Simplify Loan.
• In its evaluation, management determined that substantial doubt exists about our ability to continue as a going concern for a one-year period following the financial statement issuance date due to the net loss from continued operations and working capital deficit.
• There can be no assurance that we will be able to execute plans to rectify the recurrence of net losses.
• If we are unable to execute these plans, it could lead to selling assets and further reducing costs and cash requirements.
• We may not be able to sustain current growth rates, current revenue levels, or achieve profitability.
• We expect to face challenges, risks, and difficulties frequently experienced by growing companies in rapidly developing industries, including those relating to: ● changes in demand and pricing for our products, services and the Platform; ● developing, maintaining, and expanding relationships with Publisher Partners and advertisers; ● innovating and developing new solutions that are adopted by and meet the needs of Publisher Partners and advertisers; ● competing against companies with a larger user and customer base or greater financial or technical resources; ● changes in the pricing policies of Publisher Partners, advertisers and competitors; ● changes in our access to valuable user data; ● costs to develop and upgrade the Platform to incorporate new technologies; ● costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; ● seasonality in our business; ● the length and complexity of our sales cycles; ● the timing of stock-based compensation expense; ● potential costs to attract, onboard, retain and motivate qualified personnel; ● responding to evolving industry standards and government regulations that impact our business, particularly in the areas of data protection and consumer privacy; ● changes in demand as a result of changes in the macroeconomic environment, as a result of inflation, changes in interest rates or foreign exchange rates, or otherwise; and ● further expanding our business in other markets.
• As of December 31, 2024, we had federal net operating loss carryforwards, or NOLs, due to prior period losses of approximately $210.6 million, and certain NOLs could expire before we generate sufficient taxable income to make use of our NOLs.
• We are currently out of compliance with the continued listing standards of the NYSE American.
• Our failure to regain compliance with the continued listing standards may result in the delisting of our common stock.
• Our common stock is listed on the NYSE American and such listing is contingent on our compliance with the NYSE American’s standards for continued listing, including requirements relating to maintaining minimum stockholders’ equity.
• On October 2, 2024, we received a notification (“Letter”) from the NYSE American stating that we are not in compliance with the minimum stockholders’ equity requirements of Sections 1003(a)(i), 1003(a)(ii) and 1003(a)(iii) of the NYSE American Company Guide (the “Company Guide”) requiring stockholders’ equity of (i) $2.0 million or more if we have reported losses from continuing operations and/or net losses in two of its three most recent fiscal years, (ii) $4.0 million or more if we have reported losses from continuing operations and/or net losses in three of the four most recent fiscal years and (iii) $6.0 million or more if we have reported losses from continuing operations and/or net losses in its five most recent fiscal years, respectively.

and 10 more.