Company: DKI
Filing Date: 2025-05-23
Form Type: DRS/A
Source: 0001641172-25-012167
Chunk: 28

Company: DarkIris Inc.
Filing Date: 2025-05-23
Form: DRS/A
Chunk 28
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 will be adversely affected as a result.

We may not be successful in licensing intellectual property and games, and may not be successful in generating significant revenue in the future.

We engage in publication and operation of licensed games from third parties, and licensed games have continued to be a crucial part of our portfolio. For example, our major games are licensed from unrelated third parties. In addition, we have co-developed games with third parties.

As of September 30, 2024, we held 12 games licensed from third-party game developers. Our game licensing agreements generally have a term of three years after their commercial launch. Generally, our licensing partners can terminate our game licensing agreements by providing a 30 days written notice prior to the expiration of the contract term. In addition, the licensing partners can terminate our game licensing agreements if we violated the licensing agreements or are adjudged bankrupt or insolvent.

For the fiscal years ended September 30, 2024 and 2023, we generated approximately $5.68 million and $3.94 million from publishing games licensed from third parties, which represented approximately 73% and 99% of our total revenue for the fiscal years ended September 30, 2024 and 2023, respectively. Two of the third parties accounted for more than 20% revenues from the third parties for the fiscal years ended September 30, 2024 and 2023.

Our licensing partners may terminate their licensing agreements with us prior to their expiration or refuse to renew the licensing agreements. Even if these partners are willing to renew the licensing agreements, they may demand commercial terms, such as revenue-sharing ratios, that are less favorable to us than under the existing licensing agreements. The partners may also choose to partner with our competitors, allowing them to enhance their game portfolios and better compete against us. Although terminations of license agreements are expected in our industry, any loss or deterioration of our relationship with any of our licensing partners may result in a loss of revenues and materially and adversely affect our business and results of operations.

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We cannot assure you that we will be able to successfully license games developed by third-party developers. Our failure to license games without generating revenue from our other service offerings could negatively impact our game portfolio and pipeline, and consequently our results of operations and financial condition.

The laws and regulations regulating mobile games in Hong Kong and the Mainland China continue to evolve and change, which may make it difficult for us to obtain or maintain all applicable permits and approvals.

Our operating entities in Hong Kong,