RUM Group (RUM) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01Weakened global economic conditions, including the effects of heightened inflation, may affect our business and operating results
2. 02Our limited operating history makes it difficult to evaluate our business and prospects
3. 03We may not continue to grow or maintain our active user base, may not be able to achieve or maintain profitability, and may not be able to scale our systems, technology, or infrastructure effectively or grow our business at the same or similar rate as other comparable companies
4. 04If we fail to maintain adequate operational and financial resources, particularly if we continue to grow rapidly, we may be unable to execute our business plan or maintain high levels of service and customer satisfaction
5. 05Our traffic growth, engagement, and monetization depend upon effective operation within and compatibility with operating systems, networks, devices, web browsers and standards, including mobile operating systems, networks, and standards that we do not control
6. 06We rely on data from third parties to calculate certain of our performance metrics. Real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business
7. 07We face significant competition, and if we are unable to compete effectively with our competitors for traffic and advertising spend, our business and operating results could be harmed
8. 08Changes to our existing content and services could fail to attract traffic and advertisers or fail to generate revenue
9. 09We derive the majority of our revenue from advertising. The failure to attract new advertisers, the loss of existing advertisers, or the reduction of or failure by existing advertisers to maintain or increase their advertising budgets may adversely affect our business and operating results
10. 10We may not be able to maintain relationships with existing publishers through RAC and may fail to attract new publishers to our network
11. 11We depend on third-party vendors, including internet service providers and data centers, to provide core services
12. 12Technologies that enable blocking of certain online advertisements, or that otherwise impair our ability to deliver advertising, could harm our operating results
13. 13Our ability to generate revenue depends on the development and availability of tools to accurately measure the effectiveness of advertisements on our platform
14. 14Our cloud services business relies on a small number of key third-party service providers and a small number of customer relationships, the disruption of which could harm our operating results
15. 15The loss of key personnel, or failure to attract and retain other highly qualified personnel in the future, could harm our business
16. 16If our users do not continue to contribute content or their contributions are not perceived as valuable to other users, we may experience a decline in user growth, retention, and engagement on Rumble, Locals or RAC, which could result in the loss of advertisers and revenue
17. 17The loss of a material portion of our existing content creators, or our failure to recruit new content creators, may materially harm our business and results of operations
18. 18We have made, and may in the future make, acquisitions, and such acquisitions could disrupt our operations, and may have an adverse effect on our operating results
19. 19We are subject to cybersecurity risks and interruptions or failures in our information technology systems. Notwithstanding our efforts, a cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss
20. 20Spam activity, including inauthentic and fraudulent user activity, if undetected, may contribute, from time to time, to some amount of overstatement of our performance indicators and may negatively impact our reputation
21. 21Our cloud services business may not achieve success, and, as a result, our business, financial condition and results of operations could be adversely affected
22. 22Risks related to our e-commerce business may result in our broader business, financial condition and results of operations being adversely affected
23. 23Negative media campaigns may adversely impact our financial performance, results of operations, and relationships with our business partners, including content creators and advertisers
24. 24Media campaigns and advertising boycotts against us may be intended to interfere with our relationships with streaming partners and advertisers, and these campaigns and boycotts may intensify if political polarization increases in the United States and Canada
25. 25Our management team has limited experience managing a public company, which exposes us to additional risks, including the risk that we cannot enhance, maintain, and adhere to our internal controls and procedures
26. 26We have identified material weaknesses in our internal control over financial reporting as of December 31, 2024. If we are unable to remediate these material weaknesses, we may not be able to accurately or timely report our financial condition or results of operations
27. 27Our recently implemented Bitcoin treasury strategy exposes us to various risks associated with holding Bitcoin

Risks related to accepting stablecoin as a payment method

1. 28Our planned expansion into accepting certain stablecoins as a medium of exchange will expose us to additional financial, regulatory, operational, and market risks that could adversely affect our business, financial condition, and results of operations
2. 29The development and use of AI may result in reputational harm, liability, or other adverse consequences to our business operations

Risks Related to the Legal and Regulatory Environment in Which We Operate

1. 30We may fail to comply with applicable privacy laws
2. 31Our cloud services business operates in a highly regulated environment, subject to a complex and rapidly evolving array of domestic and international laws, regulations, and industry standards governing data privacy, cybersecurity, data localization, and cross-border data transfers
3. 32We operate across many domestic and international jurisdictions which may subject us to cybersecurity, privacy, data security, data protection, and online content laws with uncertain interpretations
4. 33Noncompliance with anti-corruption, anti-bribery, anti-money laundering, and similar laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations
5. 34Inadequate technical and legal intellectual property protections could prevent us from defending or securing our proprietary technology and intellectual property
6. 35We may be found to have infringed on the intellectual property of others, which could expose us to substantial losses or restrict our operations
7. 36We may face liability for hosting content that allegedly infringes on third-party copyright and trademark rights
8. 37The incentives that we offer to certain content creators may lead to liability based on the actions of those creators
9. 38While we believe that the incentives we offer to certain content creators do not alter our liability protections under Section 230, it is possible that future judicial interpretations of the statute will lead to liability for tortious or unlawful materials uploaded to Rumble by those content creators
10. 39User-generated content could affect the quality of our services and deter current or potential users from using our platforms, and we may face negative publicity for removing, or declining to remove, certain content, regardless of whether such content violated any law
11. 40Changes in tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new U.S. or international tax legislation, or exposure to additional tax liabilities may adversely impact our financial results
12. 41Compliance obligations imposed by new privacy laws, laws regulating online video-sharing and other platforms and online speech in certain jurisdictions in which we operate, or industry practices may adversely affect our business and operating results
13. 42We may become subject to newly enacted laws and regulations that restrict content on the internet
14. 43We are involved in litigation that is unpredictable and may have an adverse impact on our financial condition, results of operations and cash flows
15. 44Paid endorsements by our content creators may expose us to regulatory risk, liability, and compliance costs, and, as a result, may adversely affect our business, financial condition and results of operations

Risks Related to Ownership of Our Securities

1. 45Our Charter authorizes our Board to issue preferred stock, which may delay, defer or prevent a tender offer or a takeover attempt
2. 46Our Charter contains forum limitations for certain disputes between us and our stockholders that could limit the ability of stockholders to bring claims against us or our directors, officers and employees
3. 47Our CEO has control over key decision making as a result of his control of a majority of the voting power of our outstanding capital stock
4. 48Our CEO may be incentivized to focus on the short-term share price as a result of his interest in shares placed in escrow and subject to forfeiture pursuant to the terms of the Business Combination Agreement
5. 49Substantial future sales of our Class A Common Stock by our current stockholders could cause the market price of our Class A Common Stock to decline
6. 50Our stock price may be volatile, and purchasers of our common stock could incur substantial losses
7. 51We have and will continue to incur significant expenses and administrative burdens as a public company, which could have an adverse effect on our business, financial condition and results of operations
8. 52There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq
9. 53If securities or industry analysts cease publishing research or reports about Rumble, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities could decline
10. 54Pursuant to the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act for so long as we are an “emerging growth company”
11. 55We do not expect to declare any cash dividends for the foreseeable future