Triller Group (ILLR) risk factors, FY2025 10-K

Other

1. 01Risks Factors Relating to the Company’s Hong Kong Operations and Proximity to the PRC
2. 02The Company may also become subject to the laws and regulations of the PRC to the extent that the TAG Business commences business and customer facing operations in mainland China as a result of any future partnership, acquisition, expansion, or organic growth
3. 03The securities of ILLR may be delisted or prohibited from being traded “over-the-counter” under the Holding Foreign Companies Accountable Act (as amended by the Accelerating Holding Foreign Companies Accountable Act) if the PCAOB were unable to fully inspect the company’s auditor
4. 04The Company’s potential expansion of activities in China is subject to various risks
5. 05The Company’s financial services revenues are highly dependent on macroeconomic conditions as well as Hong Kong, China, and global market conditions. Disruptions in the global financial markets and economic conditions could adversely affect the Company and its institutional clients and customers
6. 06Failure to comply with existing or future laws and regulations related to data protection or data security could lead to liabilities, administrative penalties, or other regulatory actions, which could negatively affect the Company’s operating results, business, and prospects
7. 07The PRC may prevent the cash maintained by the Company in Hong Kong from leaving, or the PRC could restrict deployment of such cash for the Company’s business purposes or for the payment of dividends
8. 08The technologies that the Company uses may contain undetected errors, which could result in customer dissatisfaction, damage to the Company’s reputation, or loss of customers
9. 09We rely on our business relationships with product issuers and the success of those product issuers, and the future development depends, in part, on the growth of such product issuers and their continued collaboration
10. 10The property agency segment of the Platform Business has historically operated on thin margins, which expose it to risk of non-profitability and recent trends have caused the segment to be loss-making
11. 11A number of our business partners are commercial banks and other financial institutions that are highly regulated, and the tightening of laws, regulations, or standards in the financial services industry could harm its business
12. 12Significant increases and decreases in the number of transactions by the Company’s clients can have a material negative effect on the Company’s profitability and its ability to efficiently process and settle transactions
13. 13We operate in a variety of heavily regulated industries in Hong Kong and globally, which expose its business activities to risks of noncompliance with an increasing body of complex laws and regulations
14. 14We are subject to evolving regulatory requirements, and failure to comply with these regulations or to adapt to regulatory changes could materially and adversely affect its operations, business, and prospects
15. 15We may be adversely affected by the complexity, uncertainties, and changes in regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses, or permits applicable to our business may have a material adverse effect on its business and results of operations
16. 16Uncertainties in the interpretation and enforcement of Hong Kong laws and regulations could limit the legal protections available to us and our investors
17. 17Triller has a limited operating history and has experienced fluctuations in its results of operations due to the nature of its business and a number of factors, which makes it difficult to forecast its revenue and evaluate its business and future prospects
18. 18Triller has an unproven and evolving business model and the Company cannot provide any assurance that Triller will generate significant revenues or operating profit
19. 19Triller has various financial obligations which have come due in the past six months and are coming due over the next twelve months and it may not be able to meet its cash obligations as those amounts come due
20. 20Triller has material weakness in internal control over financial reporting
21. 21Inability to Adequately Fund Legal Defence
22. 22Non-compliance with the objective and subjective criteria for the Paycheck Protection Program (“PPP”) loan could have a material adverse effect on Triller’s business
23. 23If the Company’s goodwill or intangible assets become impaired, the Company may be required to record an additional significant charge to earnings
24. 24Triller is not in compliance with the payment obligations of a significant number of its significant music licensing agreements and agreements with other vendors and counterparties
25. 25Unfavorable macroeconomic conditions, including those caused by inflation or reductions in customers’ spending, could limit Triller’s ability to grow its business and negatively affect its results of operations
26. 26Triller’s financial performance in certain quarters and years may fluctuate and may not be indicative of, or comparable to, its financial performance in subsequent financial quarters or years due to economic conditions and operational factors
27. 27If the Company acquires, combines with or invests in other businesses, it will face risks inherent in such transactions
28. 28Triller is involved in lawsuits and other litigation matters that are expensive and time consuming, and, if resolved adversely, could harm Triller’s business, financial condition, or results of operations
29. 29Improper or illegal use of Triller’s Technology Platform could seriously harm Triller’s business and reputation
30. 30Triller tracks certain performance metrics with internal tools and do not independently verify such metrics. Certain of Triller’s performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm Triller’s reputation and negatively affect its business
31. 31If Triller’s efforts to attract Creators, users, consumers and Brands are not successful, Triller’s revenues will be adversely affected
32. 32Use of social media by Triller’s Creators, Brands and users may materially and adversely affect Triller’s reputation or subject Triller to fines or other penalties
33. 33Triller may not be successful in its efforts to further monetize its Technology Platform, which may harm Triller’s business
34. 34If Triller is unable to maintain adequate content on its Technology Platform, its business may be harmed
35. 35Triller’s success and revenue growth are dependent on adding new Creators, users, consumers and Brands, effectively educating and training Triller’s existing Creators and Brands on how to make full use of Triller’s Technology Platform and increasing usage of Triller’s Technology Platform by Triller’s consumers
36. 36Triller generates substantially all of its revenue from Brands. If the content and services provided on Triller’s Technology Platform are not relevant to Brands, fail to attract new Brands or result in a loss of Brands using Triller’s Technology Platform, Triller’s growth may be adversely impacted
37. 37Further, Triller may experience media, legislative, or regulatory scrutiny of its actions or decisions regarding user privacy, encryption, content, advertising and other issues, which may materially adversely affect Triller’s reputation and Triller’s relationship with its Brands
38. 38Triller’s user growth, engagement, and monetization on mobile devices depend upon effective operation with mobile operating systems, networks, technologies, products, and standards that Triller does not control
39. 39Unfavorable media coverage has in the past and could in the future materially adversely affect Triller’s business, brand image or reputation
40. 40Triller’s market is competitive and dynamic. Triller faces and will continue to face significant competition for Creators, Brands and consumers, which could result in reduced profit margins and loss of market share
41. 41In operating its Technology Platform, Triller may fail to launch new products or features according to its timetable, and its new products or features may not be commercially successful
42. 42The use of Automatic Content Recognition (“ACR”) technology to collect viewing behavior data is emerging and may not be successful
43. 43Payment methods used on Triller’s Technology Platform subject Triller to third party payment processing-related risks
44. 44Triller may experience losses due to subscriber fraud and theft of service
45. 45If TV streaming develops more slowly than Triller expects, Triller’s operating results and growth prospects could be harmed
46. 46Changes to Triller’s existing products and apps, or the introduction of new products and brand names that Triller develops, could fail to attract or retain Creators users, consumers or Brand partners, or generate revenue and profits
47. 47Triller must increase the scale and efficiency of its technology infrastructure to support its growth
48. 48If Triller is unable to ensure that its Technology Platform interoperates with a variety of software applications that are developed by others, including its partners, Triller may become less competitive and its results of operations may be harmed
49. 49Triller relies on software and services from other parties. Defects in, or the loss of access to, software or services from third parties could increase Triller’s costs and adversely affect the quality of Triller’s business
50. 50Triller incorporates software and services from third parties into its Technology Platform, and its inability to maintain rights to such software and services would harm its business and results of operations
51. 51Certain of Triller’s products contain third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict Triller’s ability to sell its products
52. 52The failure to maintain or renew Triller’s agreements with producers or distributors of free, freemium and pay-per-view content could adversely impact Triller’s business
53. 53Triller is a party to many music license agreements that are complex and impose numerous obligations upon Triller that may make it difficult to operate Triller’s business, and a breach, or perceived breach, of such agreements could adversely affect Triller’s business, operating results, and financial condition
54. 54Triller faces risks, such as unforeseen costs and potential liability, in connection with content Triller produces, licenses, and distributes through Triller’s Technology Platform
55. 55The failure to continue creating and partnering with those who create popular live events and pay-per-view programming could adversely impact Triller’s business
56. 56Triller may pay upfront expenses when planning live Events, entering into exclusive agreements for video series, or licensing rights to distribute and publicly perform music, and if these arrangements do not perform as Triller expects, its business, results of operations and financial condition may be harmed
57. 57A decline in the popularity of Triller’s brand of sports entertainment, including as a result of changes in the social and political climate, could adversely affect Triller’s business
58. 58A determination that independent contractors are employees could expose Triller to various liabilities and additional costs
59. 59The Company’s insurance may not be adequate
60. 60Triller may be prohibited from promoting and conducting Triller’s live Events if it does not comply with applicable regulations
61. 61Labor disputes, whether involving Triller’s own employees or sports leagues, creative talent or broadcast partners may disrupt Triller’s operations and adversely affect Triller’s results of operations
62. 62The sales cycle for live events programming varies and may negatively affect Triller’s ability to prepare accurate financial forecasts
63. 63A significant slowdown in the growth of AI and AI-related markets could affect Triller’s business and earnings. Even if the market does grow, there is a possibility that Triller may not be able to grow at a similar pace
64. 64AI services and products developed by Triller may become obsolete due to fast growing technological innovations or the entry of competitors with more financial and brand power
65. 65Failure to attract and retain additional qualified personnel could prevent the Company from executing the Company’s business strategy and growth plans
66. 66The information that Triller’s AI learns may include highly confidential information. In the unlikely event of a leakage of such confidential information, Triller’s credibility may be negatively impacted, which may affect Triller’s business, operating results, and financial condition
67. 67Use of new and emerging AI applications, such as genAI content creation, may require additional investment and costs, and pose risks to Triller’s business and could subject Triller to legal liability
68. 68Issues relating to the responsible use of our technologies may result in reputational or financial harm and liability
69. 69Triller may be unable to protect its patents, trademarks and other intellectual property rights, and others may allege that Triller infringes upon their intellectual property rights
70. 70Triller has been, and in the future may be, sued by third parties for alleged infringement of their proprietary rights
71. 71Triller may incur significant expenses to protect its intellectual property rights, and if Triller is unable to adequately protect its intellectual property rights, its competitive position could be harmed
72. 72Triller may be subject to disputes or liabilities associated with content made available on its products and services
73. 73If Triller fails to retain existing users or add new users, or if Triller’s users decrease their level of engagement with Triller’s products, Triller’s revenue, financial results, and business may be significantly harmed
74. 74Existing federal, state, and foreign laws regulate the senders of commercial emails and text messages and changes in privacy laws could adversely affect Triller’s ability to provide its services and could impact its results from operations or result in costs and fines
75. 75Triller faces uncertainties associated with international markets
76. 76As a result of Triller’s operations in international markets, Triller is subject to risks associated with the legislative, judicial, accounting, taxation, regulatory, political and economic risks and conditions specific to such markets
77. 77Triller is subject to extensive U.S. and foreign government regulations, and Triller’s failure to comply with these regulations could adversely affect its business
78. 78Triller is subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject Triller to criminal penalties or significant fines and harm Triller’s business and reputation
79. 79The Company may be unsuccessful in its strategic acquisitions and investments, and the Company may pursue acquisitions and investments for its strategic value in spite of the risk of lack of profitability
80. 80Triller’s international sales and operations, including Triller’s planned business development activities outside of the United States, subject Triller to additional risks and challenges that can adversely affect Triller’s business, results of operations and financial condition
81. 81Existing and future laws and evolving attitudes about data privacy and security may impair Triller’s ability to collect, use, and maintain data points of sufficient type or quantity to develop and train Triller’s artificial intelligence algorithms
82. 82Unfavorable outcomes in legal proceedings may adversely affect Triller’s business and operating results
83. 83Triller may be subject to liability claims if it breaches its contracts
84. 84The market and sectors in which Triller participates are competitive and rapidly evolving, and if it does not compete effectively with established companies as well as new market entrants Triller’s business, results of operations, and financial condition could be harmed
85. 85In addition, some of Triller’s larger competitors have substantially broader product offerings and leverage their relationships based on other products or incorporate functionality into existing products to gain business in a manner that discourages users from using the Company
86. 86Certain metrics and estimates of market opportunity included in this registration statement may prove to be inaccurate
87. 87Triller’s Technology Platform and products are dependent on APIs built and owned by third parties, including social media networks, and if Triller loses access to data provided by such APIs or the terms and conditions on which it obtains such access become less favorable, Triller’s business could suffer
88. 88Our shares were delisted from Nasdaq, and while we are seeking to resume trading on Nasdaq, there can be no assurance that our shares will be reinstated or that trading will resume on a timely basis, or at all
89. 89Our consolidated financial statements have been prepared assuming we will continue as a going concern. However, as disclosed in Note 3 to the consolidated financial statements, there is substantial doubt about our ability to continue as a going concern
90. 90Our share price has been, and could continue to be volatile
91. 91Because we do not intend to pay cash dividends, our stockholders will benefit from an investment in our common stock only if it appreciates in value
92. 92If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline