Company: DKI
Filing Date: 2025-04-25
Form Type: DRS/A
Source: 0001641172-25-006135
Chunk: 32

Company: DarkIris Inc.
Filing Date: 2025-04-25
Form: DRS/A
Chunk 32
---
 regulatory compliance issues, our business could be adversely affected.

In addition, we have benefited from the widely recognized brand names and large user bases of these publishing channels. If any of these publishing channels loses its market position or otherwise falls out of favor among mobile game players or other factors cause its user base to stop growing or shrink, or if any of them fails to perform its contractual obligations to us, we would need to identify alternative channels for marketing, promoting and distributing our mobile games, which would consume substantial resources and may not be effective or available.

We highly rely on licensing games developed by third-parties, which is our substantial revenue source. We may not be able to renew contract with or obtain licenses from third-parties, which may result in revenue decrease.

Our business
model is significantly reliant on licensing games developed by third parties, serving as a substantial revenue source. We currently
operate 12 games licensed from third-parties. As of the fiscal year September 30, 2024 and 2023, we generated approximately $5.68
million and $3.94 million from games licensed from third parties, which represented approximately 73% and 99% of our total revenue.
This highlights the significant role these licensed games play in our financial performance and emphasizes the need of managing the
risks associated with our heavy reliance on them.

Our game licensing
agreements generally have a term of three years after their commercial launch. However,
our licensing partners can terminate our game licensing agreements with us prior to their expiration by providing a 30 days written notice
or refuse to renew the license agreements. The licensing partners can terminate our game licensing agreements if we violated the licensing
agreements or are adjudged bankrupt or insolvent. 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.

Our business is subject to risks related to third-party publishing channels and payment processing channels.

We make available a variety of mobile payment solutions to our gameplayers, enabling them to easily make in-game purchases of virtual item through our third-party publishing channels such as Apple App Store, Google Play Store, My1737 and Let’s Play Art Planet, and our third-party payment processing channels such as Mycard, PayPal, WeChat, and Alipay. Our reliance on publishing and payment channel partners may subject us to payment collection issues beyond our control, or even fraud and other illegal activities in connection with these payment methods. Interruption in the ability of