Inspired Entertainment (INSE) risk factors, FY2025 10-K

Risks Relating to Our Business and Industry

1. 01Particularly in our Virtuals business, we rely on a relatively small number of customers for a significant portion of our sales, and the loss of, or material reduction in, sales to any of our top customers could have an adverse effect on our business, results of operations, financial condition and prospects
2. 02We are dependent on our relationships with key suppliers to obtain equipment and other supplies for our business on acceptable terms
3. 03Disruption of our supply chain or distribution capabilities have an adverse effect on our business, financial condition, and results of operations36% rewritten
4. 04Our results of operations could be adversely affected by labor shortages, turnover, and labor cost increases99% rewritten
5. 05We operate in a highly competitive industry and our success depends upon our ability to effectively compete with numerous worldwide businesses
6. 06We are heavily dependent on our ability to renew our long-term contracts with our customers and we could lose substantial revenue if we are unable to renew certain of these contracts, or to renew them on substantially similar terms
7. 07We could lose substantial revenue or experience reduced profitability due to the introduction of, or increases in, gaming taxes, statutory levies, withholding taxes, digital services taxes and other local or cross-border fiscal measuresNew
8. 08Our ability to bid on new contracts may be dependent upon our ability to fund any required up-front capital expenditures through our cash from operations, the incurrence of indebtedness or the raising of additional equity capital
9. 09Our business depends on our ability to prevent or mitigate the effects of a cybersecurity attack61% rewritten
10. 10Our business depends upon the protection of our intellectual property and proprietary information96% rewritten
11. 11We also license certain technologies, content and intellectual property from third parties. If such licenses are terminated, not renewed or become unavailable on commercially reasonable terms, we may be required to modify or discontinue affected products or incur additional development costsNew
12. 12Data privacy, cybersecurity and artificial intelligence regulations could increase our costs and expose us to liabilityNew
13. 13Our results of operations fluctuate due to seasonality and other factors and, therefore, our periodic operating results are not guarantees of future performance98% rewritten
14. 14Our industry is subject to strict government regulations that could limit our existing operations and have a negative impact on our ability to grow
15. 15(iv) fail to pursue all lawful efforts to require such unsuitable person to relinquish voting securities including, if necessary, the immediate purchase of said voting securities for cash at fair market value32% rewritten
16. 16Our industry is subject to regulations that set parameters for levels of gaming or wagering duty, tax, stakes, prize, technology certifications and return to player percentages
17. 17Our business is subject to evolving technology, product certification and operational performance risksNew
18. 18Our business competes on the basis of the stability, security and integrity of our software, networks, systems, games and products
19. 19We may be adversely affected by disruptions to our transaction gaming and lottery systems, as well as disruptions to our internal enterprise and information technology systems
20. 20Because tax laws and regulations are subject to interpretation and uncertainty, tax payments may ultimately differ from amounts currently recorded by the Company
21. 21Environmental, social and governance, responsible gambling and market perception risks could adversely affect our businessNew
22. 22Our directors and key personnel are subject to the approval of certain regulatory authorities, which, if withheld, would require us to sever our relationship with non-approved individuals, which could adversely impact our operations
23. 23Licensing and gaming authorities have significant control over our operations and ownership, and could cause us to redeem certain stockholders on potentially disadvantageous terms
24. 24Changes in laws or regulations, or a failure to comply with, or liabilities under, any laws and regulations, may adversely affect our business, investments and results of operations
25. 25We are a holding company and conduct all of our operations through our subsidiaries
26. 26Our inability to identify, complete or successfully integrate future acquisitions could limit our growth and adversely affect our resultsNew
27. 27Our business may be affected by changes in general and local economic and political conditions
28. 28Our revenue can vary substantially from period to period and you should not rely upon our periodic operating results as indications of future performance
29. 29We have operations in a variety of countries, which subjects us to additional risks
30. 30Our business could be negatively affected by ownership changes and consolidation in the gaming industry
31. 31We may not be able to capitalize on the expansion of interactive gaming or other trends and changes in the gaming and lottery industries, including due to laws and regulations governing these industries, and other factors
32. 32Our business is capital intensive and our ability to retain customers may be influenced by our ability to deploy additional capital
33. 33Our success depends on our ability to attract, retain and develop key personnelNew
34. 34The provisions of our existing borrowings may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions65% rewritten
35. 35We may have future capital needs and may not be able to obtain additional financing on acceptable terms
36. 36We may be unable to identify and develop sufficient new products and product lines and integrate them into our existing business, which may adversely affect our ability to compete; our expansion into new sectors may present competitive and regulatory challenges that differ from current ones
37. 37Changes in customer and player preferences could adversely affect our results of operations
38. 38Our financial success is dependent on our customers’ ability to attract and maintain players

Risks Relating to Our Status as a Public Company and Ownership of Our Common Stock

1. 39The liquidity of the trading markets for our securities and other factors may adversely affect the price of our securities
2. 40We do not currently intend to pay dividends on our common stock
3. 41Our business and stock price may suffer if securities or industry analysts do not publish or cease publishing research or reports about the Company, our business, or our sector, or if they change their recommendations regarding our common stock adversely, the price and trading volume of our common stock could decline
4. 42We may issue a significant number of shares of our common stock or other securities from time to time which could result in substantial dilution and adversely affect the market price of our common stock64% rewritten
5. 43Anti-takeover provisions contained in our second amended and restated certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt
6. 44These provisions, alone or together, could delay or dissuade hostile takeovers and changes in control of the Company or changes in our Board of Directors and management

Risks Relating to Economic and Political Conditions

1. 45Volatility or disruption in the financial markets could materially adversely affect our business and the trading price of our common stock
2. 46Currency exchange rate fluctuations could result in lower revenue, higher costs and decreased margins and earnings
3. 47Global economic conditions could have an adverse effect on our business, operating results and financial condition
4. 48International hostilities, terrorist or cyber-terrorist activities, natural disasters, pandemics, and infrastructure disruptions could prevent us from effectively serving our customers and thus adversely affect our results of operations67% rewritten