NASDAQ: SNAL

Our
roots trace back to the beginnings of the massively multiplayer online role-playing games (“MMORPG”), with early titles including
Age of Wushu. Our long history provides us with substantial experience that we leverage to identify and invest in promising game
development studios and to manage the growth of our games into AAA titles. We collaborate with talented development teams, providing
our expertise, capital, technological resources, customer service, marketing strategy and other services to achieve a successful outcome.

We
optimize our development pipeline and target specific market segments by publishing games under several specialized brands through
our three publishing labels, Snail Games USA, Wandering Wizard and Interactive Films. Our distribution strategy utilizes Steam’s early access
feature (“Early Access”), which allows us to publish a title while it is still in development, to achieve faster
go-to-market times. We utilize proprietary technology, including a versatile game engine and advanced server technology, to heighten
artistic detail and increase player engagement.

We
attribute our continued success to several differentiating elements.

Perseverance:
We are called Snail because we admire a snail’s perseverance in achieving its goals. We maintain a disciplined approach to our
game development, financial management and strategic acquisitions as we seek to deliver long-term value.

Innovation:
We believe innovation is at the core of a highly engaging entertainment experience. Our titles span from indie games to our AAA franchise
ARK: Survival Ascended. We created the Wandering Wizard label to allow us to invest and grow indie titles built by bright, passionate
teams.

Technology:
We utilize advanced and proprietary technologies to drive demand and optimize costs. The Company is strategically integrating artificial
intelligence technology into our game development process. We will transform our art pipeline with an innovative text to 3D model and
pioneer the generation of resources and biomes on a planetary scale. Our proprietary micro-influencer platform, NOIZ, operated
by our subsidiary Eminence Corp, enables us to substantially broaden our influencer base at an advantaged cost, and our game and server
technology provide a highly customizable development infrastructure.

Collaboration:
We partner with talented independent studios for game development. Development teams, some of which are our wholly owned subsidiaries,
are provided capital and other critical resources and are afforded a high degree of autonomy. We believe this model best preserves the
culture and creativity of the development team and encourages the development of successful games.

Developers:
We believe in the importance of maintaining a broad developer network to ensure the simultaneous development of high-quality games. We
have seven internal development studios and we partner with two related-party development studios from AAA to indie located in the United
States and internationally.

Experience:
Our management team has deep knowledge of the gaming landscape based on more than two decades of experience in the gaming industry. Our
Founder, Chief Executive Officer, Chief Strategy Officer, and Chairman Mr. Hai Shi, was a pioneer in sandbox and MMORPG games, and our
Vice President and Director of Business Development and Operations, Peter Kang, has a deep understanding of game development and
publishing. Our industry experience is foundational to our success in development and publishing and helps us to quickly identify attractive
acquisition and partnership opportunities.

Our
dedication to providing audiences with high-quality entertainment experiences utilizing the latest gaming technology has produced strong
user engagement, continued revenue growth, and increased cash flows. Through December 31, 2025, our ARK series games have been
played for 4.3 billion hours with an average playing time per user of 161.4 hours and with the top 21.5% of all players spending over
100 hours in the game, according to data from the Steam platform. For the years ended December 31, 2025 and 2024, our net revenue was
$81.2 million and $84.5 million, respectively. We have maintained a diversified revenue base across platforms. During fiscal year 2025,
approximately 38.4% of our revenue came from consoles, 50.0% from PC and 9.6% from mobile platforms; as compared to 42.4% from consoles,
48.1% from PC and 5.5% from mobile platforms during the year ended December 31, 2024. We had a net loss of $27.2 million for the year
ended December 31, 2025 as compared to a net income of $1.8 million for the year ended December 31, 2024.

1

Recent
Developments

In
2025, we accelerated the expansion and monetization of our core franchises across console, PC, and mobile platforms. We released multiple
high-impact ARK franchise DLC expansions, including ARK: Astraeos, ARK: Aquatica, and launched the highly anticipated
ARK: Lost Colony in December 2025. The pre-sale performance of ARK: Lost Colony from June through November 2025 exceeded
expectations with over 372K units sold. ARK: Survival Ascended, the base game, continued to deliver robust results in 2025. The
inclusion of ARK: Survival Ascended on PlayStation Plus in May 2025 generated over 8 million downloads and expanded the franchise’s
console footprint, with a corresponding uplift in DLC sales. Live-ops execution further strengthened engagement, as Bellwright’s
two major content updates drove increased engagement among our fans. On mobile, ARK: Ultimate Mobile Edition surpassed 10 million
downloads in 2025, reinforcing our multi-platform strategy. We also broadened our gaming portfolio with three game acquisitions, six
indie releases, and new in-house IP announcements, underscoring our commitment to sustained franchise growth and diversified content
development.

Beyond
gaming, we advanced our Film and TV, and Digital Asset initiatives to diversify revenue streams and strengthen our ecosystem. Our short-form
mobile app, SaltyTV, released 100+ short film dramas as of December 31, 2025, and continues to scale production under a strategic
Memorandum of Understanding with Mega Matrix Inc. focused on joint development and global distribution. We also
expanded into interactive full-motion video games with The Fame Game: Welcome to Hollywood, deepening user engagement through
narrative-driven experiences. In parallel, we announced a strategic digital asset initiative to evaluate the launch of a proprietary
stablecoin designed to enable secured digital payments across our entertainment ecosystem. At our December 2025 Investor Day event, we
unveiled the stablecoin’s official branding and symbolically minted the first coin, marking a significant milestone in positioning
the Company at the forefront of digital innovation within the interactive entertainment space.

Market
Opportunity

We
serve a large addressable market in a dynamic industry with strong growth tailwinds. Video games are rapidly growing as an entertainment
platform on a global scale given the proliferation of mobile devices and numerous vectors of gaming experience. We are well-positioned
to capitalize on economic trends in our markets as we own and/or maintain exclusive license rights to valuable intellectual property
(“IP”) that can be monetized through various channels across gaming and digital entertainment. We believe that our current
market leadership in video games and growing presence in influencer platform through NOIZ is just our beginning.

We
have developed and invested in various successful sandbox survival titles since 2015. Our video game production quality, our history
of franchise success, and our technological leadership have contributed to a deeply engaged, global player community, many members of
which continue to purchase DLCs for our existing games and related games published under our brand or co-brands. We also offer the advantage
of providing equal accessibility to gamers of all experience levels and demographics for our sandbox survival games, allowing us to maximize
audience reach. Furthermore, depending on players’ experience and intensity, our platform gives players the flexibility to play
on our servers, user-created servers, or private servers, which allows us to target a wider range of gamers and lower operating expenses.

Our
Value Proposition

Value
proposition for gamers: We aim to provide high-quality entertainment experience to end users. We strive to create the best game
play experience for gamers by offering frequent new content and endless game play possibility as key value propositions to our players.

New
Content: We continuously incorporate feedback from players to improve existing games and build expansion packs, which are released
periodically. DLCs offer gamers a familiar game play in a new virtual world with a different fantasy twist from dinosaurs to Sci-Fi.

Endless
Possibility: Our games provide hours of entertainment with features that permit dynamic environmental changes of the virtual
world, user-directed conquests, and cooperative or competitive gameplay with other users. Our sandbox games provide players with freedom,
without the rules found in other genres such as racing games.

Value
proposition for developers: Our business model is dependent on partnerships with developers, and we offer key value propositions
of collaborative partnership, culture of innovation and technology to our developers.

Value
proposition for creators: In the first quarter of 2024, we launched our premium modding program through ARK: Survival
Ascended which will allow publishing of modified content to the PC, Xbox and PlayStation platforms. This is revolutionary as these
platforms were previously locked for modified content. Our proprietary technology will allow capable developers familiar with the cutting-edge
Unreal Engine 5 to publish their creations onto console platforms with the click of a button. The premium mods program for ARK: Survival
Ascended represents a forward-thinking approach to community engagement and rewards creators with an industry leading 50% of the
revenue generated.

Collaborative
Partnership: We provide capital, technological resources, customer service, marketing strategy and other services to our video
game development partners. We strategize with developers to customize marketing campaigns tailored to target markets. Our founder also
provides developers with creative and other advice based on his deep expertise in the industry.

2

Culture
of Innovation: We believe high-quality experiences result from a combination of forward thinking and fearless creativity. We
encourage our development teams to experiment with emerging technologies and unique fantasy twists.

Technology:
Our developers have access to our advanced development infrastructure as well as our proprietary technology including our micro-influencer
technology, NOIZ, which helps brands engage with previously untapped small- to mid-sized influencers.

Our
Platform

Our
strategic flywheel is anchored by our dedication to delivering high-quality, compelling entertainment experiences and is driven by our
capabilities in publishing, developing and creating proprietary technology. Growth in the number of published titles allows us to invest
in new development teams and proprietary technology, which expand the number of titles we publish in a self-reinforcing loop. As the
quality of our games increases, we are well-positioned to attract more users and more influencers. With increased influencers through
our propriety micro-influencer platform, NOIZ, we are able to reach a broader audience and increase user engagement within our
games. This drives additional revenue, which we use to increase our developer network and to build proprietary technology. Our technology,
along with our collaborative, innovative culture attracts talented developers, which in turn result in an increased number of high-quality
games.

Publishing:
We derive the majority of our revenue from titles we offer through licensing and publishing agreements. Our ARK franchise is led
by our strategic partnership with Studio Wildcard. Our typical publishing cycle includes annual DLC releases for our major franchises,
after which we repeat the same publishing cycle to attract new players and continue to entertain our existing players. We seek to bring
new fantasy twists and genres to our players with innovative, creative content cultivated from strong partnerships with independent developers
and published through our Interactive Films and Wandering Wizard labels.

Development:
We also develop titles using a partnership approach in which we acquire ownership stakes in independent development teams. We preserve
a development team’s culture by allowing a high degree of autonomy in its operations, which we believe allows development teams
to retain their creative license, while also extracting synergies by utilizing our shared resources including customer service and backend
functions. Furthermore, we foster a culture of communication where employees at all levels at our partner studios are able to receive
direct feedback from our CEO. We partnered with Donkey Crew to produce Last Oasis, a nomadic survival massively multiplayer online
game (“MMO”) with melee combat conquests, and Bellwright, an open-world survival game set in medieval times and includes
town building, resource management and combat strategy.

3

Technology:
We are early adopters of the latest technology in our games and develop proprietary technology when necessary to address market opportunities.
We maintain a flexible infrastructure to efficiently develop virtual worlds with advanced rendering and atmospheric effects across a
wide array of video game types. We developed a proprietary micro-influencer marketing platform, NOIZ, to help game streamers and
game companies reach a wider audience and diversify marketing spend. We work with our developers to create custom campaigns to optimize
reach.

Our
Key Strengths

Top-ranked
category defining franchise with a track record of growth: Our dedication to our customers and innovative game development has
resulted in our position as a top-ranked, category-defining franchise with a track record of growth. Our flagship franchise, ARK,
is a leader within the sandbox survival genre with over 108.6 million console and PC installs through December 31, 2025. ARK has
consistently ranked among the top-grossing titles on Steam. As of December 31, 2025, ARK has been played for 4.3 billion hours
since its release on the Steam platform.

Proven
expertise in creating successful gaming franchises: We have proven expertise in creating successful gaming franchises. We are
a multi-platform publisher with over 16 years of experience in creating culturally influential game titles, while demonstrating financial
growth. As of December 31, 2025, we had 37 game titles. By recognizing the lucrative potential of the sandbox survival category at its
nascent stages, we became a first mover in the category, and we now license and publish leading IP, including the global franchise ARK:
Survival Evolved, ARK: Survival Ascended, Bellwright, Atlas and Last Oasis. Our approach to the industry is to create
a one-size-fits-all game to draw people into the overall sandbox survival genre. In order to retain players, we invest in game quality
to generate additional interest, in addition to spending on advertising. Our collaborative relationships with video game development
studios, industry leaders, technology providers and distribution platforms allow us to invest in promising video game projects and manage
their growth into AAA video games and entertainment franchises. Our approach creates a continuous cycle of monetization opportunities
across our gaming portfolio.

IP
portfolio spanning across multiple media formats and technology platforms to captivate end user: We license and own an IP portfolio
spanning across multiple media formats and technology platforms to captivate end users. Our primary use of IP is to generate successful
video games within and beyond the sandbox survival genre. Currently, our games are available on Xbox Live and Game Pass, PlayStation
Network, Steam, Epic Games Store, the Apple App Store, the Google Play Store, My Nintendo Store and the Amazon Appstore, as well as through
traditional retail channels. However, our vision for our valuable IP rights extend far beyond just gaming: our vision extends into media
formats such as animation, TV, movies, eSports, and reality TV and interactive media, which we believe has tremendous potential. We have
high aspirations across digital media and we have entered the animation and television industry with ARK, the Animated Series in
2024.

Collaborative
development process between developers and management: We continue to evolve with the industry with our deep pipeline of leading
video game franchises such as ARK: Survival Evolved, ARK: Survival Ascended, Atlas, Survivor Mercs, Last Oasis and
Bellwright. Our success in game development and in keeping up with industry trends is partially attributed to our collaborative
relationships with video game development studios, industry leaders, technology providers and distribution platforms. Our cooperative
development process provides for a proprietary scalable model to publish multiple AAA video games based on current trends. We are proud
of our collaborative relationship with our developers, as we believe it is truly unique in our industry and one of our main differentiators.
We offer developers an ecosystem that aligns incentives and creates an environment for creativity to thrive. In addition to wonderful
ideas for games, we value partners who share our vision and culture. After a partnership is formed, we offer developers a direct line
of communication to Mr. Shi, our Founder, Chief Executive Officer, Chief Strategy Officer and Chairman, who is viewed as a pioneer in
the video game industry and business world. We offer developers freedom by giving them access to the wide breadth of the Snail platform
and resources so they can do what they do best: create.

4

Innovative
use and creation of next-gen technologies and platforms: We use innovative technology to serve our customers, allowing us to
provide high-quality user experiences and services. Our proprietary video game technology includes a versatile development pipeline tools,
advanced rendering technology and advanced server and network operations, in addition to our use of currently accepted standard industry
technologies. Additionally, our customizable development infrastructure provides a framework for efficiently developing all types of
video game projects using advanced rendering technologies for realistic lighting, weather and atmospheric effects, for creating new types
of virtual assets and for other effects that heighten artistic detail and increase player engagement. Our ARK: Survival Ascended
premium mod program unlocks the power of Unreal Engine 5 for our player base to create limitless content and rewards their creativity
through the most competitive revenue sharing models in the industry. Modders will be able to amplify their reach through this technology
by publishing their mods across multiple platforms. Our micro-influencer business, NOIZ, strives to build an influencer marketing
platform for brands to directly engage with small to-midsized influencers, through which influencers can reach millions of video game
consumers and generate additional revenue at a cost advantage.

Visionary
management team well versed in industry and business: We attribute much of our success to our visionary senior management and
business development teams, which have a deep understanding of games and global video markets and aim to build innovative products for
gamers. Our Founder, Chief Executive Officer, Chief Strategy Officer and Chairman, Mr. Shi, is also the founder and Chief Executive Officer
of Suzhou Snail Digital Technology Co., Ltd. (“Suzhou Snail”), a related party, and is a pioneer in the video game industry
and the sandbox survival genre. Mr. Shi is responsible for our overall vision, which has included adapting our business model for the
global markets, focusing on premium games and investing in video game development and publishing in North America and Europe. Our founder
and other members of our management and business development teams are seasoned gamers, who lead and provide insight into gaming development
from a first-hand user’s perspective. We operate in an ecosystem in which our leaders employ a hands-on approach, as each developer
is able to get direct contact with our founder and receive one-on-one feedback and mentorship.

Our
Growth Strategy

Continue
to grow our successful ARK franchise: As one of the most creative and innovative companies in our industry, our primary
strategy is to capitalize on our franchise and focus on delivering unique games and content, offering services that extend and enhance
the experience, and connecting more players across more platforms. We believe the breadth and depth of our multi-platform, services offerings,
and our use of multiple business models and distribution channels provide us with strategic advantages. We have established ourselves
as a market leader based on our continued ability to release titles which rank in the top 100 of Steam sales and will continue to enhance
our market-leading gaming franchises including ARK: Survival Evolved, ARK: Survival Ascended, ARK: Ultimate Mobile Edition,
Voyage, Bellwright, West Hunt and PixArk. We focus on publishing high-quality content, regularly updating our games
after launch to encourage social interactions, adding new content and features, and improving monetization. For example, we have released
five paid DLCs since the original release of ARK: Survival Evolved to support further growth in our ARK franchise. Furthermore,
we have released ARK: Survival Ascended to revolutionize the ARK experience for our players through leveraging the Unreal
Engine 5 and have implemented thorough quality of life revamps in all aspects of the game. We continue to release new DLCs such as Bob’s
Tall Tales, Fantastic Tames, Astraeos, Lost Colony, etc. to further enhance the player experience and growth of the ARK franchise.
We will also continue to support the modding community through the premium mod program.

Continue
to build a strong pipeline of new content via Snail Games USA and our independent label, Wandering Wizard: Building on our strong
established franchises and creating new franchises through compelling new content is at the core of our business. We are always seeking
ways to expand our portfolio of franchises, launching new intellectual property or rolling out innovative platforms for gamers to remain
engaged and have a unique experience. We endeavor to reach as many consumers as possible by offering our content on multiple platforms
and delivering compelling experiences across multiple business models. Currently, we have seven console and PC games under development
that are expected to be released in the next five years. Our independent label, Wandering Wizard, allows us to publish independent games
of different graphical quality and different genres at a lower acquisition cost while utilizing our proven development and distribution
strategies. Titles published under Wandering Wizard include West Hunt, Expedition Agartha, Survivor Mercs, and Zombie
Within, and more recently, Zombie Rollerz and Rebel Engine. In addition to spending on advertising, we invest in the research
and development of new games as a form of marketing to increase our exposure. We believe that utilizing resources in this manner allows
us to better leverage our areas of developmental expertise before launching a title. Each new game serves as an opportunity to market
ourselves, expose audiences to the sandbox survival genre, engage with existing players, and monetize our platform’s full breadth
of opportunities.

5

Continue
to expand NOIZ, our micro-influencer marketing business, and use the platform to bolster our marketing initiatives and eCommerce
revenue: We are focused on reaching more players whenever and wherever they want to play. We believe that we can add value to
our network by utilizing content creators and micro-influencers to connect to a world of play by offering an interactive platform for
players to engage in. We created our proprietary, full-service marketing platform, NOIZ, where we have direct relationships with
influencers and save on third-party costs. NOIZ helps aspiring game streamers and game companies reach a wider audience, diversify
marketing spend and income streams, and build their own brands easily and professionally at a large scale. NOIZ provides speed
and payment to influencers, in addition to speed in the execution of marketing campaigns since no large scale agencies are involved.
NOIZ benefits all of our marketing and promotional initiatives and serves as a source of eCommerce revenue. NOIZ is designed
so that clients can choose to work on campaigns on their own or directly with our creative campaign managers in an end-to-end managed
campaign process, with 24/7 support, by paying a fee. The management team at NOIZ is comprised of eSports and gaming industry
veterans and has worked with clients such as Square Enix, Sega, Stunlock Studios, Facebook, Sansar, TikTok, Bose, Softgiving, and Omaze.
NOIZ directly contributes to our video game growth because each influencer’s stream of our games to their followers is a
sales opportunity. Micro- and macro-influencers have taken advantage of NOIZ’s unique program, through which they receive
a portion of the revenue from the video games they help sell. Through NOIZ, we can also collect data used to analyze new trends
and self-market our products.

Continue
investing in new technologies and platforms to efficiently capitalize on emerging trends: We provide a variety of digitally delivered
products and games that are played online and on mobile platforms, such as tablets and smartphones; as such, there are various opportunities
for us to grow and enhance profitability. We will continue investing in new distribution channels such as streaming media, animation,
television and eSports as opportunities in platform distribution as well as DLCs arise to expand our reach and grow our business. We
invest in the development of interactive entertainment products for new distribution channels, which incorporate a new technology or
business model that enables us to compete more effectively against our peers. For our future games, we ultimately aim to build a metaverse
in which users can create their own gameplay content and interact in a virtual world with other players over a secured network. We intend
to hold competitions where players can submit created content and receive rewards, with the potential of incorporation into a new map
as DLC with the assistance of our development team. We continuously evaluate and integrate AI advancements into our development pipeline,
leveraging emerging technologies to enhance efficiency, creativity, and overall productivity. As AI evolves, we are strategically adopting
tools that optimize workflows and expand creative possibilities, including AI-driven image and video generation, AI-assisted photogrammetry
for 3D models, AI-enhanced textures for realistic lighting, and AI-powered coding with large language models. These innovations are already
driving significant productivity gains across all aspects of game development, allowing us to invest in the future while maintaining
the handcrafted quality that defines our products.

Scale
our operations through international market expansion and strategic acquisitions: In line with our growth strategy, we plan to
complete acquisitions to expand our gaming offerings, obtain talent, and expand into new markets. We continue to evaluate strategic acquisition
opportunities in areas such as studios, publishers, and agencies. We may also pursue joint ventures or establish subsidiaries with strategic
partners as well as make investments in interactive gaming and entertainment business as part of our long-term business strategy. The
global market for interactive entertainment continues to grow, and we seek to increase our presence internationally, particularly in
South America, where video game demand is expected to increase as the region advances in technology. We have existing relationships and
customers in South America which we hope will continue to grow. We retain licensing rights to our intellectual properties in certain
regions and intend to build on our existing licensing relationships and also continue to expand on license distribution strategies to
grow our international business. As a result, we are actively exploring international strategic opportunities that fit our needs and
culture. We are currently iterating on an updated interface and product model for NOIZ which we will be terming NOIZ 3.0. This will update
our interface with our current base and provide our clients with a more versatile way to issue campaigns to NOIZ’s userbase. We
also seek to expand our licensing opportunities to new platforms and other geographies. We are continuing to execute on our growth initiatives,
where our strategy is to broaden the distribution of our licensing opportunities. We intend to continue to build on our licensing relationships
and also continue to expand on distribution strategies to grow our business. Furthermore, the growth and development of electronic commerce
will enable us to explore more licensing opportunities across various geographic regions.

6

Our
Games

ARK:
Survival Evolved: is an action-adventure survival sandbox game set in an open-world environment with a dynamic day-night cycle. Players
must survive being stranded on an island filled with roaming dinosaurs and other prehistoric animals, natural hazards, and potentially
hostile human players. The game released to Early Access in June 2015 and to retail in August 2017. The game was ranked #1 by market
share within the sandbox survival genre, based on Steam sales, within one year of its release to Early Access. The game supports consoles
(PS4, PS5, Xbox One, Xbox Series X/S, and Nintendo Switch), PCs and mobile (Android, iOS). We developed ARK in partnership with
Studio Wildcard, and have released five expansion packs, or DLCs.

●
Scorched
Earth. A desert map with minimum water and extreme weathers. The DLC was released on September 2016.

●
Aberration.
A radiation style expansion pack to explore the mysterious underground world. The DLC was released on December 2017.

●
Extinction.
A mechanical style expansion pack themed to fight against giant titans and save the post-apocalyptic earth. The DLC was released
on November 2018.

●
Genesis
1 & 2. A mission-based gameplay DLC with the ability to explore new worlds and mysterious stories. The DLCs were released
in February 2020 and in June 2021, respectively.

ARK:
Survival Ascended: Uses the latest in videogame technology, Unreal Engine 5 (“UE5”), to deliver the next evolution of
the ARK franchise. ARK: Survival Ascended is reimagined from the ground up with updated artwork, high end graphics, new
physics systems and quality of life revamps in every area of the game. ARK: Survival Ascended also includes cross-platform multiplayer
and modding capabilities. Players who purchase the game can currently access the island, Scorched Earth, Aberration, and Extinction,
and will have access to ARK Genesis Parts 1 and 2 and more. The game currently supports consoles and PCs and was developed
in partnership with Studio Wildcard and Grove Street Games.

●
Lost
Colony. A map that sets in a brutal, post-Cataclysmic era where the Earth’s southern pole has been plunged into eternal
night. The DLC was released in December 2025.

ARK
Ultimate Mobile Edition: A complete dinosaur survival experience tailored for iOS and Android mobile devices. This new free adaptation
includes the massive content from PC and console versions of ARK: Survival Evolved and its acclaimed Expansion Packs—Scorched Earth,
Aberration, Extinction, Genesis Parts 1 & 2, and fan-favorite maps like Ragnarok. With its debut, players can explore massive worlds,
tame and train over 150 dinosaurs, and build and craft in an expansive multiplayer environment.

Bellwright:
Developed in connection with our wholly owned subsidiary, Donkey Crew, Bellwright is an open-world strategy survival game based in the
medieval period. The game offers a compelling blend of survival, strategy, combat, and town building in a richly imagined world. Players
are challenged to build, sustain, and defend their town against the elements and adversaries all while building a rebellion force to
take on the crown. Bellwright to launched in Early Access in the second quarter of 2024. Two large content updates have been added since
Early Access release in April 2025 (Anniversary Update) and December 2025 (Maiden Voyage Update).

PixARK:
An open-world, voxel type, survival sandbox game. To survive in the PixARK world players must tame creatures, craft high tech
and magical tools and build their bases using cubes. The game has a robust character creator, an infinite number of voxel-based maps
and procedurally generated quests making every PixARK adventure unique to the player. Players can play on their own or band together
to form tribes. The game was released by Early Access on Microsoft Windows and Xbox One, then in 2019 the full version was launched on
Steam, PlayStation 4 and Nintendo Switch.

Voyage
Century Online: A free-to-play MMORPG set in the Age of Sail. Launched in 2007, the game focuses on maritime exploration, trading,
naval battles, and empire-building. Players can choose different professions such as merchants, explorers, or naval warriors, and engage
in real-time ship combat, city sieges, and treasure hunting. The game features an open world based on real historical locations, with
a strong emphasis on upgrading ships, crafting, and economic systems.

West
Hunt: Launched in Early Access in June 2022 and v1.0 in March 2023, West Hunt is a multiplayer social deduction game set in the Wild
West. Developed by NewGen, it features 1v1 or team-based gameplay where one player takes on the role of an outlaw blending in with NPCs,
while the other plays as a sheriff trying to identify and eliminate the criminal before time runs out. The outlaw must complete secret
objectives without raising suspicion, while the sheriff uses clues and deduction to track them down.

Our
Technology

We
employ industry standard game engines for the majority of our games, which allows flexibility and accelerated game development. Our proprietary
code modifies the game engines to fit the needs and features of our games as necessary, and for franchises like ARK, we are able
to leverage that proprietary code in the development of new DLCs for existing games and development of entirely new games. We retain
ownership of all code developed for our proprietary engine, Flexi, which is currently being used to develop certain games in our pipeline
with the expectation of launching to external developers in the near future.

We
offer an industry-leading micro-influencer platform, NOIZ, through which influencers can connect with brands in need. We continue
to make technological enhancements to NOIZ, with a focus on streamlining the process to connect brands with influencers, and facilitating
and simplifying the agreements that need to be executed between the two parties.

7

Our
Competition

The
interactive entertainment market is highly competitive and evolves rapidly as new games, content and features are introduced. We compete
with other interactive entertainment companies such as Activision Blizzard, Inc., Electronic Arts Inc., Take-Two Interactive, Zynga,
Ubisoft, Epic Games, Tencent, Netmarble, Sony, Microsoft and Nintendo primarily for game development on consoles, PCs and mobile devices.
Across the sandbox survival game genre, we primarily compete with Embracer Group, Saber Group, Enand Global 7, FunCom, Axolot Games,
and Facepunch Studios. We also face competition from other independent developer studios. Important factors in the video game development
and publishing industries include innovation, creative and technical talent, game quality, brand recognition, platform compatibility,
pricing, accessibility to distribution channels and customer service.

Our
broader competitors include other providers of digital entertainment, such as film, television, social networking, streaming and music.

Regulatory
Matters

We
are subject to various federal, state and international laws and regulations that affect companies conducting business on the
Internet and mobile platforms, including those relating to privacy, use and protection of player and employee personal information
and data (including the collection of data from minors), the Internet, behavioral tracking, mobile application, content, advertising
and marketing activities (including sweepstakes, contests and giveaways) and anti-corruption. These laws, including the General Data
Protection Regulation and the California Consumer Privacy Act, which may restrict our ability to gather and use data about our
users, or could harm our business by limiting the products and services we can offer consumers or the manner in which we advertise
or offer them. Data privacy, data protection, localization, security and consumer-protection laws are evolving, and the
interpretation and application of these laws in the United States (including compliance with the California Consumer Privacy Act),
Europe (including compliance with the General Data Protection Regulation), and elsewhere often are uncertain, contradictory and
changing. It is possible that these laws may be interpreted or applied in a manner that is adverse to us or otherwise inconsistent
with our practices, which could result in litigation, regulatory investigations and potential legal liability or require us to
change our practices in a manner adverse to our business. As a result, our reputation and brand may be harmed, we could incur
substantial costs, and we could lose both gamers and revenue. Additionally, emerging regulations addressing artificial intelligence
that may be incorporated into our games could impose new compliance obligations and restrict certain product features. Additional
laws in all of these areas are likely to be passed in the future, which could result in significant limitations on or changes to the
ways in which we can collect, use, host, store or transmit the personal information and data of our customers or employees,
communicate with our players and deliver products and services, which significantly increase our compliance costs. As our business
expands to include new uses or collection of data that are subject to privacy or security regulations and our operations continue to
expand across the globe, our compliance requirements and costs will increase and we may be subject to increased regulatory
scrutiny.

For
more information regarding risks relating to data privacy and security, see Item 1A of Part I, “Risk Factors — Risks
Related to Legal or Regulatory Compliance — Changing data privacy and security laws and regulations in the jurisdictions
in which we or our consumers do business could increase the cost of our operations and subject us to possible sanctions, civil lawsuits
(including class action or similar representative lawsuits) and other penalties; such laws and regulations are continually evolving.
Our platform and service providers’ actual or perceived failure to comply with these laws and regulations could harm our business,
financial condition and results of operations.”

Intellectual
Property

Similar
to other interactive entertainment companies, our business is significantly dependent on the creation, acquisition, use and protection
of intellectual property. Some of this intellectual property is in the form of software code, other technology, and trade secrets that
we use to run our games. Other intellectual property includes copyrighted audio-visual elements that consumers can see, hear, and interact
with when they are playing our games. Most of the intellectual property we use is licensed to us by third-party game developers. We obtain
such intellectual property rights through licenses and service agreements, and such licenses may limit our use of such intellectual property
to specific uses and for specific time periods. We seek to advance and maintain our business through both a combination of licensed and
owned intellectual property.

As
of December 31, 2025, we owned the following trademarks related to the business: 15 registered trademarks in the United States, 2 registered
trademarks in non-U.S. jurisdictions, 11 registered United States copyrights and 1 pending U.S. design patent application through one
of our subsidiaries, which is scheduled to expire in 2033, assuming payment of all appropriate maintenance, renewal, annuity or other
governmental fees. As of December 31, 2024, we did not have any pending trademark registration applications and we did not have any issued
U.S. design patents. Additionally, we have registered domain names for websites that we use in our business, such as snailgamesusa.com
and playark.com.

8

A
majority of our revenue is derived from licensed intellectual property, such as our ARK franchise. We license the
intellectual property underlying our ARK franchise from SDE Inc. (“SDE”), the parent company of Studio Wildcard.
SDE is controlled by the spouse of Mr. Shi, our Founder, Chief Executive Officer, Chief Strategy Officer and Chairman. We entered
into an original exclusive software license agreement with SDE in November 2015, for the rights to ARK: Survival Evolved,
which was amended and restated on January 1, 2022, and subsequently, amended in December 2022, March 2023, and October 2023 (as
amended and restated, and as further amended to date, the “ARK1 License Agreement). The license fee has been restructured so that we
will pay 40% of total revenue of ARK I as a royalty instead of the $1.5 million monthly fee plus 25% of the total ARK
I revenue once the sequel, ARK II, is publicly released. The ARK1 License Agreement expires in 2035, with provisions for automatic renewal for three-year terms unless either
party elects not to renew. The ARK1 License Agreement may also be terminated early for material breach or insolvency by either party.

In
March 2023, we amended the ARK1 License Agreement with SDE to include DLC prepayments. The Company will prepay a maximum of $5.0 million
for each DLC, in whole or in part, in advance of a DLC release. No payment with respect to any DLC will exceed $5.0 million. The October
2023 amendment to the ARK1 License Agreement clarified the delineation of the ARK I, ARK II, and
ARK: Survival Ascended monthly license fees, royalty percentages for each, and applicability of the $5.0 million DLC payments.
Following the launch date of ARK: Survival Ascended we will pay a monthly license fee of $2.0 million, which will be terminated
upon the public release of ARK II. The $2.0 million monthly license fee replaces the $1.5 million monthly license fee we were
previously paying for ARK: Survival Evolved. Additionally, following the launch of ARK: Survival Ascended, we will pay
25% of the total ARK: Survival Ascended revenues as a monthly royalty and 40% of the total ARK: Survival Evolved revenue
as a monthly royalty. The previously released 5 DLCs, mini-packs or add-ons to the 5 DLCs and any non-canonical maps on ARK: Survival
Ascended are not subject to DLC payments required under the existing agreement. In 2025 and 2024, we incurred $24.0 million and $24.0
million, respectively, in license costs and $18.6 million and $19.7 million, respectively, in royalty costs pursuant to the ARK License
Agreements.

In
addition to our primary licenses for the ARK franchise, we are also party to other licensing agreements with Suzhou Snail, relating
to the intellectual property for our current mobile and upcoming PC games. Under these license agreements, we receive an exclusive, sublicensable
license to use, publish, distribute, market, operate and service games from third parties. The license agreements call for the developers
to develop a certain number of titles for us, while we are responsible for the operation and launch of such games including the marketing,
strategy, billing, and server maintenance for such games. In these agreements, payment terms will frequently include royalty payments
to developers in the low to mid double-digit percentages range and will occasionally include up-front licensing payments and development
payments based on scheduled deliverable milestones. Under these agreements, the developer will often own all of the intellectual property,
and the agreements can be terminated for breach with a period to cure, for insolvency, or for our nonpayment. In 2025 and 2024, we accrued
$0.7 million and $0.7 million, respectively, in license, royalty and development costs, which we record under accounts payable - related
parties.

Further,
our products that play on consoles and mobile platforms include technology that is owned by the platform provider and is licensed non-exclusively
to us for use in the relevant product. We also license technology from providers other than console manufacturers in developing our content
and services. While we may have renewal rights for some licenses, our business is dependent on our ability to continue to obtain the
intellectual property rights from the owners of these rights on reasonable terms and at reasonable rates.

We
are actively engaged in enforcement of our copyright, trademark, and trade secret rights against potential infringers of those
rights along with other protective activities, including monitoring online channels for distribution of pirated copies and participating
in various enforcement initiatives, education programs, and legislative activity around the world. For our PC products, we use technological
protection measures to prevent piracy and the use of unauthorized copies of our products. For other platforms, the platform providers
typically incorporate technological protections and other security measures in their platforms to prevent the use of unlicensed products
on those platforms.

For
more information regarding risks relating to intellectual property, see Item 1A of Part I, “Risk Factors — Risks
Related to Intellectual Property.”

9

Facilities

Our
principal executive office, which we own, is located at 12049 Jefferson Boulevard, Culver City, California 90230. Certain debt agreements
are secured by our principal executive offices. We also lease additional facilities to support our operations. We believe our existing
facilities are sufficient for our current needs. We may add new facilities and expand our existing facilities as we add employees and
expand into new locations. We believe suitable additional space will be available as needed to accommodate our needs.

Human
Capital Resources

As
of December 31, 2025, we had 166 full-time employees worldwide, of whom approximately 74% are based in North America and approximately
26% are based in Europe, the Middle East and Africa (“EMEA”) region. We have approximately 72% of our employees dedicated
to technology and content development, 7% to marketing and 21% to general administration. As of December 31, 2025, we do not have any
part-time employees, nor do we have any unions or collective bargaining agreements with any of our employees. We work to identify, attract
and retain employees who are aligned with and will help us progress towards our mission, and we seek to provide competitive cash and
equity compensation.

Corporate
Information

Snail
Games USA, Inc. (“Snail Games USA”) was incorporated in the State of California on September 22, 2009. Snail, Inc. (“Snail”)
was incorporated in the State of Delaware on January 11, 2022. Concurrently with our initial public offering in November 2022, Snail
and Snail Games USA consummated transactions, as a result of which, (i) Snail became a holding company, with its principal asset consisting
of all of the shares of common stock of Snail Games USA and (ii) Snail controls the business and affairs of Snail Games USA and its subsidiaries.

Our
principal executive office is located at 12049 Jefferson Boulevard, Culver City, California 90230. Our telephone number at this address
is (310) 988-0643. Our main website is https://investor.snail.com/. The information contained in, or accessible through, our website
is not incorporated by reference in, and should not be considered part of, this Annual Report.

We
have proprietary rights to trademarks, trade names and service marks appearing in this Annual Report that are important to our business.
Solely for convenience, the trademarks, trade names and service marks may appear in this Annual Report without the ® and
™ symbols, but any such references are not intended to indicate, in any way, that we forgo or will not assert, to the
fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, trade names and service
marks. All trademarks, trade names and service marks appearing in this Annual Report are the property of their respective owners.

We
make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports, available
free of charge at our website as soon as reasonably practicable after they have been filed with the SEC.