Risk Factors Update Summary

• Sales of Core Collectible branded category products decreased from 80% to 73% of total sales.
• Trade route disruptions due to geopolitical tensions were added as a risk factor.
• Cybersecurity risks and challenges were emphasized, with potential disruptions and liabilities outlined.
• The number of registered U.S. trademarks increased from 106 to 118.
• Detailed tax implications for partnerships like FAH, LLC were disclosed, impacting income tax assessments.
• Amendments to the Credit Agreement, including changes to the Revolving Credit Facility, were disclosed.
• Gross margins decreased from 32.8% to 30.4% for the years ended December 31, 2022 and 2023.
• New laws, such as the Child Status Protection Act, were highlighted as affecting operations.
• Changes in stockholder derivative actions and settlements were detailed, impacting corporate governance.
• The average royalty rate increased from 16.1% to 16.4% for the years ended December 31, 2022 and 2023.
• Penalties and interest related to underpayments were disclosed, with a contingent liability of $0.8 million.
• The reserve related to prepaid royalties decreased from $0.8 million to $0.4 million for the years ended December 31, 2022 and 2023.
• Sales to international customers increased from 27% to 31% of total sales for the years ended December 31, 2022 and 2023.
• The number of pending international trademark applications decreased from 94 to 68.