Business Description

Organization and Description of Business System1, Inc. and subsidiaries (the "Company", "we", "our" or "us") operates several flagship brands across multiple consumer verticals, including shopping, travel and search, and a best-in-class customer acquisition and marketing platform powered by Artificial Intelligence ("AI") and machine learning. Our platform is omnichannel and omnivertical, delivering high-intent customers to our advertising partners to maximize their reach and effectiveness. Our platform operates across our network of owned and operated websites, allowing us to monetize user traffic that we source from various acquisition marketing channels. Our marketing platform allows us to operate seamlessly across major advertising networks and advertising category verticals to acquire end-users, and monetize acquired users through our relationships with third party advertisers and advertising networks ("Advertising Partners"). The platform also allows third party advertising platforms and publishers ("Network Partners") to send user traffic to, and monetize user traffic on, our Products websites or through our monetization agreements. We monetize user traffic we acquire directly from various marketing channels, across multiple advertising platforms, and have acquired several leading websites, enabling us to control user acquisition and experience and monetize user traffic on our behalf via our network of products. Today, we own and operate approximately 40 websites, including leading search engines like Startpage.com and info.com , and digital media publishing websites and internet utilities, such as CouponFollow, MapQuest , HowStuffWorks and ActiveBeat . Our primary operations are in the United States, and we also have operations in Canada and the Netherlands. We have two reportable segments: Marketing and Products, see Note 11, Segment Reporting . On August 1, 2024, we undertook a corporate reorganization, the result of which was that all of the assets and business operations of the Company are now held by System1 Holdings, LLC ("System1 Holdings"), a newly formed intermediate holding company of which we maintain the controlling interest and in which the non-controlling interest is owned by the holders of our Class C common stock. Following the corporate reorganization, (a) System1 Holdings now owns 100% of S1 Holdco, LLC ("S1 Holdco"), the previous intermediate holding company with the non-controlling interests, and 100% of S1 Media, LLC (“S1 Media”), another new subsidiary formed in connection with the corporate reorganization, (b) S1 Media holds the assets and business operations associated with our Products businesses, which include CouponFollow, Startpage and MapQuest, and our acquisition marketing platform and (c) S1 Holdco holds our assets related to our Marketing businesses. System1 Holdings holds our remaining assets and business operations. S1 Holdco and its subsidiaries remain obligors and guarantors under our Term Loan and Revolving Facility, and System1 Holdings and S1 Media are not parties thereto. Liquidity and Going Concern We have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. We have experienced declining cash flows and financial performance primarily as a result of reductions in Advertising Partners and overall consumer demand for our marketing services. As of December 31, 2025, we had cash and cash equivalents of $86.9 million and total net working capital, which we define as current assets less current liabilities, of $3.0 million. We had an aggregate principal amount outstanding of $50.0 million under our revolving facility (as defined in Note 9, Debt, Net ) with a maturity date of January 27, 2027, and $260.1 million of term debt outstanding on our term loan which matures in July 2027. Management determined, as a result of this evaluation, that our current cash and cash equivalents, net working capital position, and the upcoming maturity date of our revolving facility raise substantial doubt about our ability to continue as a going concern for the twelve-month period following the date of this filing. Our plan is to continue exploring options of refinancing all of our debt obligations.…