Three Months ended December 31,

Years ended December 31,

2023

2022

2023

2022

(in millions)

(in millions)

Total net revenue

$                     28.6

$                     15.3

$                60.9

$                74.4

Change in deferred net revenue

24.0

(3.4)

24.8

(10.7)

Bookings

$                     52.6

$                     11.9

$                85.7

$                63.7

Three Months ended December 31,

Years ended December 31,

2023

2022

2023

2022

(in millions)

(in millions)

Net (loss) income

$                       2.4

$                     (2.3)

$                 (9.1)

$                   1.0

Interest income and interest income?–?related parties

-

(0.2)

(0.1)

(0.8)

Interest expense and interest expense?–?related parties

0.5

0.3

1.5

0.9

(Benefit from) provision for income taxes

0.6

(3.2)

(2.4)

(2.4)

Depreciation and amortization expense, property and equipment

0.1

0.2

0.4

0.6

EBITDA

$                       3.6

$                     (5.2)

$                (9.7)

$                (0.7)

蝸牛游戲及其附屬公司

合并資產(chǎn)負(fù)債表

December 31, 2023

December 31, 2022

ASSETS

Current Assets:

Cash and cash equivalents

$            15,198,123

$            12,863,817

Restricted escrow deposit

-

1,003,804

Accounts receivable, net of allowances for credit losses of $523,500 and $19,929, respectively

25,134,808

6,758,024

Accounts receivable - related party

-

11,344,184

Loan and interest receivable - related party

103,753

101,753

Prepaid expenses - related party

6,044,404

-

Prepaid expenses and other current assets

10,169,448

10,565,141

Total current assets

56,650,536

42,636,723

Restricted cash and cash equivalents

1,116,196

6,374,368

Accounts receivable - related party, net of current portion

7,500,592

-

Prepaid expenses - related party

7,784,062

5,582,500

Property, plant and equipment, net

4,682,066

5,114,799

Intangible assets, net - license - related parties

-

1,384,058

Intangible assets, net - other

271,717

272,521

Deferred income taxes

10,247,500

7,602,536

Other noncurrent assets

164,170

198,668

Operating lease right-of-use assets, net

2,440,690

3,606,398

Total assets

$            90,857,529

$            72,772,571

LIABILITIES, NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$            12,102,929

$             9,452,391

Accounts payable - related parties

23,094,436

19,918,259

Accrued expenses and other liabilities

2,887,193

1,474,088

Interest payable - related parties

527,770

527,770

Revolving loan

6,000,000

9,000,000

Notes payable

2,333,333

5,416,666

Convertible notes, net of discount

797,361

-

Current portion of long-term promissory note

2,811,923

86,524

Current portion of deferred revenue

19,252,628

4,335,404

Current portion of operating lease liabilities

1,505,034

1,371,227

Total current liabilities

71,312,607

51,582,329

Accrued expenses

254,731

457,024

Promissory note, net of current portion

-

3,221,963

Deferred revenue, net of current portion

15,064,078

5,216,042

Operating lease liabilities, net of current portion

1,425,494

2,930,529

Total liabilities

88,056,910

63,407,887

Commitments and contingencies

Stockholders' Equity:

Class A common stock, $0.0001 par value, 500,000,000 shares authorized; 9,275,420 shares issued and 7,925,145 shares
outstanding as of December 31, 2023, and 9,251,420 shares issued and 8,053,771 shares outstanding as of December 31,
2022

927

925

Class B common stock, $0.0001 par value, 100,000,000 shares authorized; 28,748,580 shares issued and outstanding as of
December 31, 2023 and 2022

2,875

2,875

Additional paid-in capital

26,171,575

23,436,942

Accumulated other comprehensive loss

(254,383)

(307,200)

Accumulated deficit

(13,949,325)

(4,863,250)

11,971,669

18,270,292

Treasury stock at cost (1,350,275 and 1,197,649 shares as of December 31, 2023 and 2022, respectively)

(3,671,806)

(3,414,713)

Total Snail, Inc. equity

8,299,863

14,855,579

Noncontrolling interests

(5,499,244)

(5,490,895)

Total stockholders' equity

2,800,619

9,364,684

Total liabilities, noncontrolling interests and stockholders' equity

$            90,857,529

$            72,772,571

蝸牛游戲及其附屬公司

合并綜合損益表

Three months ended December 31,

For the Years Ended December 31,

2023

2022

2023

2022

(Unaudited)

Revenues, net

$            28,570,222

$            15,311,857

$            60,902,098

$            74,444,141

Cost of revenues

18,646,615

12,724,280

48,306,403

53,121,676

Gross profit

9,923,607

2,587,577

12,595,695

21,322,465

Operating expenses:

General and administrative

3,900,962

6,369,288

15,816,088

18,713,958

Research and development

1,165,381

1,295,631

5,057,421

2,955,592

Advertising and marketing

1,094,146

145,365

1,582,464

714,492

Depreciation and amortization

86,222

130,262

432,306

565,906

Loss (gain) on disposal of fixed assets

427

(17,067)

427

(17,067)

Total operating expenses

6,247,138

7,923,479

22,888,706

22,932,881

(Loss) income from operations

3,676,469

(5,335,902)

(10,293,011)

(1,610,416)

Other income (expense):

Interest income

31,443

155,124

129,854

200,913

Interest income - related parties

504

504

2,000

582,632

Interest expense

(570,523)

(308,955)

(1,531,719)

(922,293)

Interest expense - related parties

-

-

-

(3,222)

Other income

(55,351)

(17,068)

265,980

302,086

Foreign currency transaction (loss) gain

(42,574)

(23,623)

(68,180)

(1,945)

Total other income (expense), net

(636,501)

(194,018)

(1,202,065)

158,171

Income (loss) before (benefit from) provision for income taxes

3,039,968

(5,529,920)

(11,495,076)

(1,452,245)

Provision for (benefit from) income taxes

643,728

(3,249,728)

(2,400,652)

(2,446,423)

Net income (loss)

2,396,240

(2,280,192)

(9,094,424)

994,178

Net (loss) income attributable to non-controlling interests

(1,128)

(9,977)

(8,349)

46,371

Net income (loss) attributable to Snail, Inc. and Snail Games USA Inc.

$             2,397,368

$            (2,270,215)

$            (9,086,075)

$                947,807

Comprehensive income statement:

Net (loss) income

$             2,396,240

$            (2,280,192)

$            (9,094,424)

$                994,178

Other comprehensive income (loss) related to currency translation adjustments, net of tax

33,302

36,077

52,817

(40,643)

Total comprehensive income (loss)

$             2,429,542

$            (2,244,115)

$            (9,041,607)

$                953,535

Net income (loss) attributable to Class A common stockholders:

Basic

$                516,955

$               (530,686)

$            (1,960,813)

$                228,482

Diluted

$                516,955

$               (530,686)

$            (1,960,813)

$                228,482

Net income (loss) attributable to Class B common stockholders:

Basic

$             1,880,413

$            (1,739,529)

$            (7,125,262)

$                719,325

Diluted

$             1,880,413

$            (1,739,529)

$            (7,125,262)

$                719,325

Income (loss) per share attributable to Class A common stockholders:

Basic

$                     0.07

$                    (0.06)

$                    (0.25)

$                      0.03

Diluted

$                     0.07

$                    (0.06)

$                    (0.25)

$                      0.03

Income (loss) per share attributable to Class B common stockholders:

Basic

$                     0.07

$                    (0.06)

$                    (0.25)

$                      0.03

Diluted

$                     0.07

$                    (0.06)

$                    (0.25)

$                      0.03

Weighted-average shares used to compute income per share attributable to Class A
common stockholders:

Basic

7,914,564

8,770,468

7,911,369

9,131,512

Diluted

7,914,564

8,770,468

7,911,369

9,131,512

Weighted-average shares used to compute income per share attributable to Class B
common stockholders:

Basic

28,748,580

28,748,580

28,748,580

28,748,580

Diluted

28,748,580

28,748,580

28,748,580

28,748,580

蝸牛游戲及其附屬公司

合并現(xiàn)金流量表

For the years ended December 31,

2023

2022

Cash flows from operating activities:

Net (loss) income

$            (9,094,424)

$                994,178

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Amortization - intangible assets - license

-

250,000

Amortization - intangible assets - license, related parties

1,384,058

7,403,918

Amortization - intangible assets - other

804

3,751

Amortization - loan origination fees and debt discounts

124,595

26,514

Accretion - convertible notes

306,664

-

Depreciation and amortization - property and equipment

432,306

565,906

Stock-based compensation expense

848,035

223,250

Gain on lease termination

-

(122,533)

Gain on paycheck protection program and economic injury disaster loan forgiveness

-

(174,436)

Loss (gain) on disposal of fixed assets

427

(17,067)

Interest income from shareholder loan

-

(580,878)

Interest income from restricted escrow deposit

-

(3,804)

Credit losses

581,498

-

Deferred taxes, net

(2,644,964)

588,478

Changes in assets and liabilities:

Accounts receivable

(18,939,465)

5,486,716

Accounts receivable - related party

3,824,775

(2,908,361)

Prepaid expenses - related party

(8,245,966)

(2,437,500)

Prepaid expenses and other current assets

501,104

(1,875,919)

Other noncurrent assets

-

(26,052)

Accounts payable

2,992,856

4,976,192

Accounts payable - related parties

3,176,177

(3,815,313)

Accrued expenses and other liabilities

659,647

(1,039,927)

Interest receivable - related party

(2,000)

-

Interest payable - related parties

-

986

Lease liabilities

(205,520)

(145,949)

Deferred revenue

24,765,261

(10,729,488)

Net cash provided by (used in) operating activities

465,868

(3,357,338)

Cash flows from investing activities:

Repayment on loan provided by related party

-

(300,000)

Purchases of property and equipment

-

(5,256)

Proceeds from sale of property and equipment

-

19,500

Repayment on Pound Sand note

-

1,496,063

Net cash provided by investing activities

-

1,210,307

Cash flows from financing activities:

Repayments on promissory note

(79,897)

(70,961)

Repayments on notes payable

(6,500,000)

(4,166,667)

Repayments on revolving loan

(3,000,000)

-

Borrowings on notes payable

3,000,000

-

Borrowings on short-term note

-

10,000,000

Proceeds from issuance of convertible notes

847,500

-

Refund of dividend withholding tax overpayment

1,886,600

-

Payments on paycheck protection program and economic injury disaster loan

-

(90,198)

Refund of payments on paycheck protection program and economic injury disaster loan

-

48,305

Cash dividend declared and paid

-

(8,200,000)

Purchase of treasury stock

(257,093)

(3,414,713)

Proceeds from initial public offering, net of offering costs

-

11,791,705

Warrants issued to underwriters

-

193,927

Payments of capitalized offering costs

-

(1,247,567)

Payments of offering costs in accounts payable

(342,318)

-

Release of restricted escrow deposit

1,003,804

-

Net cash (used in) provided by financing activities

Effect of currency translation on cash and cash equivalents

51,670

(12,730)

Net (decrease) increase in cash and cash equivalents, and restricted cash and cash equivalents

(2,923,866)

2,684,070

Cash and cash equivalents, and restricted cash and cash equivalents - beginning of period

19,238,185

16,554,115

Cash and cash equivalents, and restricted cash and cash equivalents – end of period

$           16,314,319

$           19,238,185

Supplemental disclosures of cash flow information

Cash paid during the period for:

Interest

$                934,523

$                788,063

Income taxes

$                248,388

$                888,303

Noncash transactions during the period for:

Loan and interest payable - related parties

$                           -

$                103,890

Loan and interest receivable - related parties

$                           -

$               (103,890)

Loan and interest from shareholder

$                           -

$            94,934,400

Dividend distribution

$                           -

$          (94,934,400)

Noncash finance activity during the period for:

Issuance of warrants in connection with equity line of credit

$               (105,411)

$                           -

Gain on paycheck protection program and economic injury disaster loan forgiveness

$                           -

$               (174,436)

Snail Games USA Common Stock transferred due to reorganization

$                           -

$                  (5,000)

Snail, Inc. Common Stock and additional paid-in capital transferred due to reorganization

$                           -

$                    5,000

Offering costs included in accounts payable

$                           -

$                605,295

Funding of the escrow deposit

$                           -

$            (1,000,000)