Flash Sports & Media Holdings (FLZH) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01We have a limited operating history under the Flash Sports & Media platform and may not be able to successfully execute our business plan
2. 02We are substantially dependent on a single contractual relationship with Sri Lanka Cricket for a significant majority of our revenue
3. 03We have a going concern qualification and a history of net losses and accumulated deficits
4. 04Our revenue is concentrated among a limited number of customers and geographies
5. 05Our business is dependent on the continued popularity and growth of cricket, particularly T20 cricket, in our target markets
6. 06We are subject to risks associated with international operations
7. 07We depend on key personnel, including the founder and chairman of IPG
8. 08Force majeure events, including pandemics, natural disasters, terrorism, and political unrest, could disrupt our tournament operations
9. 09Our expansion into new markets and new business verticals involves significant risks and uncertainties
10. 10We face significant competition in the sports media and entertainment industry

Risks Related to the Merger and Integration

1. 11The Merger may not achieve its intended benefits, and integration of the combined businesses involves significant risks
2. 12Following the Merger, former Flash stockholders are expected to own a minimum of 90% of the combined company, resulting in significant dilution to existing stockholders
3. 13The Company changed its independent auditor in connection with the Merger, which may increase the risk of accounting errors or restatements

Risks Related to Nasdaq Listing and Capital Structure

1. 14We have a history of non-compliance with Nasdaq listing standards and may be unable to maintain our Nasdaq listing
2. 15We have limited liquidity and may require additional financing to fund our operations
3. 16We have significant outstanding liabilities and legal proceedings that could adversely affect our financial condition

Risks Related to Regulatory and Legal Matters

1. 17We are subject to anti-corruption, anti-bribery, and sports integrity laws and regulations
2. 18Changes in tax laws or regulations, including the recently enacted UAE Corporate Tax, could increase our tax burden
3. 19The Event Rights Agreement is governed by Sri Lankan law and disputes are subject to international arbitration, which may be costly and time-consuming
4. 20We had negative cash flow from operations for the fiscal years ended December 31, 2025 and December 31, 2024
5. 21We may continue to incur losses in the near future, which may impact our ability to implement our business strategy and adversely affect our financial condition
6. 22We may be forced to litigate to defend our intellectual property rights, or to defend against claims by third parties against urban-gro relating to intellectual property rights
7. 23We may not be able to successfully identify, consummate or integrate acquisitions or to successfully manage the impacts of such transactions on our operations

Risks Related to Ownership of Our Common Stock

1. 24Our failure to meet the continued listing requirements of Nasdaq could result in the delisting of our Common Stock
2. 25Our stock price could be extremely volatile. As a result, shareholders may not be able to re-sell their shares at or above the price they paid for them
3. 26Shareholders may be diluted by future issuances of preferred stock or additional common stock in connection with our incentive plans, acquisitions or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price
4. 27We do not anticipate paying any cash dividends on our common stock in the foreseeable future
5. 28If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, its trading price and volume could decline
6. 29Provisions of our certificate of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our shareholders may be called, and may delay, defer or prevent a takeover attempt
7. 30The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified Board members
8. 31We are subject to ongoing regulatory burdens resulting from our public listing
9. 32Our insurance may not adequately cover our operating risk
10. 33We may be exposed to currency fluctuations
11. 34Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results
12. 35Our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our business and the value of our common stock