ClickStream (CLIS) Risk Factors

There are many companies that provide Web sites and online destinations targeted to audiences seeking various forms of entertainment, education, and social interaction content. All of these companies will compete with us for visitor traffic, advertising dollars and sponsorships. This competition is intense and is expected to increase significantly in the future as the number of entertainment- education and social interaction oriented Web sites continue to grow. Our success will be largely dependent upon the perceived value of our content relative to other available entertainment alternatives, both online and elsewhere. Increased competition could result in: - lower profit margins;         - lower advertising or sponsorship rates;         - loss of visitors or visitors spending less time on our sites;         - reduced page views or advertising impressions; and         - loss of market share. Many of our potential competitors, in comparison to us, have: - longer operating histories;         - greater name recognition in some markets;         - larger customer bases; and         - significantly greater financial, technical, and marketing resources. These competitors may also be able to: - undertake more extensive marketing campaigns for their brands and services;         - adopt more aggressive advertising pricing policies;         - use superior technology platforms to deliver their products and services; and         - make more attractive offers to potential employees, distribution partners, sponsors, advertisers, and third-party content providers.

The development of our brand is critical to our ability to establish our user base and build our revenues. In order to attract users and advertisers, we intend to expend funds for creating and maintaining brand loyalty. We plan to use a combination of social media, print and Web-based advertising to promote our brand. If we fail to advertise and market our brand effectively, we will lose users and our revenues will decline. Our success in promoting and enhancing our brand will also depend on our success in providing high quality content, features and functions that are attractive and entertaining to users of online game shows and multi-player games as well as educational and social interaction. If visitors to our Web sites, users, advertisers, or sponsors do not perceive our services to be of high quality, the value of the brand could be diminished, we will lose users and our revenues will decline.

We do not currently maintain patents on our technology and others may be able to develop similar technologies in the future. We regard our copyrights, service marks, trademarks, trade secrets and other intellectual property that we will develop as critical to our success. We will rely on trademark and copyright law, trade secret protection and confidentiality and license agreements with our employees, customers, partners, and others to protect our intellectual property rights. Unauthorized use of our intellectual property by third parties may adversely affect our business and our reputation. It may be possible for third parties to obtain and use our intellectual property without authorization. Furthermore, the validity, enforceability, and scope of protection of intellectual property in Internet-related industries is uncertain and still evolving. Our multi-user games will run on proprietary software systems developed by us at significant expense. Nonetheless, we do not plan to maintain patents on our technology and others may be able to develop similar technologies in the future. We cannot be certain that our products will not infringe valid patents, copyrights, trademarks, or other intellectual property rights held by third parties. We may be subject to legal proceedings and claims from time to time relating to the intellectual property of others in the ordinary course of our business. Disputes concerning the ownership of rights to use intellectual property could be costly and time consuming to litigate, may distract management from other tasks of operating our business, and may result in our loss of significant rights and the loss of our ability to effectively operate our business.

The computer systems that will support our Web sites will be acquired and maintained by us at significant expense. We may not be able to successfully design and maintain our systems in the future. We also will license communications infrastructure software. Any system failure, including network, software, or hardware failure, that causes an interruption in our service or a decrease in responsiveness of our Web sites, could result in reduced user traffic and reduced revenue. We may experience slower response times and interruptions in service because of equipment or software down time related to the high volume of traffic on our Web sites and our need to deliver frequently updated information to our users. We cannot assure you that we will be able to expand our systems to adequately accommodate our growing user base. We could also be affected by computer viruses, electronic break-ins from unauthorized users, or other similar disruptions or attempts to penetrate our online security systems. Any secure provider system disruption or failure, security breach or other damage that interrupts or delays our operations could harm our reputation and cause us to lose users, advertisers and sponsors and adversely affect our business and operations. Our users will depend on Internet service providers, online service providers and other Web site operators for access to our Web sites. These providers have had interruptions in their services for hours and, in some cases, days, due to system failures unrelated to our systems. Any future interruptions would be beyond our control to prevent and could harm our reputation and adversely affect our business.

We plan to make content available on our Web sites and on the Web sites of our advertisers and distribution partners. The availability of this content could result in claims against us based on a variety of theories, including defamation, obscenity, negligence, copyright, or trademark infringement. We could also be exposed to liability for third-party content accessed through the links from our sites to other Web sites. We may incur costs to defend ourselves against even baseless claims and our financial condition could be materially adversely affected if we are found liable for information that we make available. Implementing measures to reduce our exposure to this liability may require us to spend substantial resources and limit the attractiveness of our service to users.

Web sites sometimes place identifying data, or cookies, on a user's hard drive without the user's knowledge or consent. Our company and many other Internet companies use cookies for a variety of different reasons, including the collection of data derived from the user's Internet activity. Any reduction or limitation in the use of cookies could limit the effectiveness of our sales and marketing efforts. Most currently available Web browsers allow users to remove cookies at any time or to prevent cookies from being stored on their hard drive. In addition, some privacy advocates and governmental bodies have suggested limiting or eliminating the use of cookies. For example, the European Union and the State of California recently adopted privacy regulations that would limit the collection and use of information regarding Internet users. These efforts will limit our ability to target advertising or collect and use information regarding the use of our Web sites, which would reduce our revenues. Fears relating to a lack of privacy could also result in a reduction in the number of our users.

We currently plan to operate outside the United States. Our business internationally will be subject to a number of risks. These include: - linguistic and cultural differences;         - inconsistent regulations and unexpected changes in regulatory requirements;         - differing technology standards that would affect the quality of the presentation of our games to our users;         - potentially adverse tax consequences;         - wage and price controls;         - political instability and social unrest;         - uncertain demand for electronic commerce;         - uncertain protection of our intellectual property rights; and         - imposition of trade barriers. We have no control over many of these matters and any of them may adversely affect our ability to conduct our business internationally.

In March 2020, the World Health Organization declared that the rapidly spreading COVID-19 outbreak (the Pandemic") was a global pandemic. In response, many governments around the world have implemented, and continue to implement a variety of measures to reduce the spread of the Pandemic, including travel restrictions and bans, instructions, or orders to practice social distancing, quarantine advisories, shelter-in-place restrictions and bans and closures of businesses. These measures have materially adversely affected and will further adversely affect consumer sentiment and discretionary spending patterns, economies, and financial markets. Our financial results and prospects are dependent on the sale of services to consumers, and our results subsequent to March 31, 2020 may be significantly and negatively impacted. Due to the uncertain and rapidly evolving nature of conditions around the world, we are unable to predict the impact of the Pandemic on our business going forward.

Our reporting currency is the United States dollar. Our customers outside the United States, however, will be generally billed in local currencies. Our accounts receivable from these customers and overhead assets will decline in value if the local currencies depreciate relative to the United States dollar. Although we may enter into hedging transactions, we may not be able to do so effectively. In addition, any currency exchange losses that we suffer may be magnified if we become subject to exchange control regulations restricting our ability to convert local currencies into United States dollars.