Today's News

Vancouver, BC, February 23, 2023--(T-Net)--Dapper Labs announced today that it is restructuring the company to improve their focus and efficiency, and is letting go approximately 20% of its full time employees.

The company has grown rapidly over the past three years, from $5 million in top line sales in 2020, to $135 million in 2022, and Dapper Labs remains in a strong cash position with no outstanding debt, according to the company.

The company says it has a huge year coming up launching two new major global IPs (unannounced) as well as relaunching NBA Top Shot and NFL ALL DAY as mobile-first platforms with balanced economies and improved gamification.

The company also announced in a blog post and a related series of tweets on Twitter that the company is facing a class action lawsuit claiming that its NBA Top Shot Moments NFTs (non-fungible tokens) are "unregistered securities".

The company and its legal counsel argued in court to dismiss this class action suit on the basis that Courts have repeatedly held that consumer goods - including art and collectibles like basketball cards - are not "securities" under federal law, and that it believes the same holds true for Moments and other collectibles (digital or otherwise).

But the judge in the case U.S. District Judge Victor Marrero denied Dapper's motion to dismiss the Friel class action, and allowed it to proceed in a reported "close call" decision.

"The judge denied the company's motion to dismiss the complaint at the case's pleading stage but did not conclude the plaintiffs were right, and it's not a final ruling on the case's merits".

"We look forward to vigorously defending our position in Court as the case continues" said the company in a tweet.

Here is a link to the Twitter thread the company posted on this topic.

Please see the full message to the company posted by Dapper Labs Founder and CEO Roham Gharegozlou on their company website below:

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A Message from Our Founder and CEO Roham Gharegozlou

Founder, @AxiomZenTeam, CryptoKitties, and Dapper Labs

Dapper team,

As shared earlier today, we are restructuring the Dapper Labs organization to improve our focus and efficiency, strengthening our position in the market and better serving our communities. As part of this restructure, we made the difficult decision to part ways with 20% of full time employees. We have already spoken to everyone affected and our team is engaging to support in every way. If you have not already received a notification, you are not impacted.

We are deeply grateful to our departing colleagues and wish them well in future endeavors. The team worked hard to create a package of benefits to help support every individual, including generous compensation, health continuation benefits, extended exercise windows for equity stock options and mental health benefits as well as job search support, including:

• Compensation: this includes three months severance for full-time employees and C1 contractors
  
  
• Health continuation benefits: six months of COBRA for US team members and comparable benefits for Canadian full-time employees
  
  
• Stock options: extended stock option exercise window of 2 years
  
  
• Mental health benefits: This will vary by health provider, but at minimum every outgoing employee will have access to four months of digital mental health support
  
  
• Resume and career coaching: We have engaged an external professional services provider (GetFive) that has already been ramped up and is ready to support outgoing team members at every step of their search and candidate journey
  
  
• Talent directory : We will be creating an updated public website (opt-in) to help support departing employees in finding new roles
  
  
• Alumni support: We will engage as a team to help and utilize our networks and executives' networks to connect dots wherever possible

Today is a difficult day -- please be there for each other, and take time for yourselves. Reach out to your team leaders, and the P&C team is here to support you however they can through this next phase. Please message me directly if you have any questions or if you'd just like to talk.

Tomorrow at our regularly scheduled All Hands at 11am PT, your leadership team and I will walk through the future in detail: long-term strategy, short-term tactics, financials, as well as leadership team updates. I will also host Q&A, so you can submit questions live or in advance.

Dapper Labs remains in a strong cash position with no outstanding debt. We are committed to our flagship products, tremendously excited about several major launches coming up this year, and more confident than ever that Web3 will remake digital life for the better for billions of people, over time.

For transparency, our top-line sales (packs + 5% of marketplace + wallet fees) over the past three years:

• 2020: $5 million
• 2021: $167 million
• 2022: $135 million

With the right cost structure, we can think long term. Our goal is to grow our communities sustainably, prioritizing the health and authenticity of each product. We have a huge year coming up launching two new major global IPs (unannounced) as well as relaunching NBA Top Shot and NFL ALL DAY as mobile-first platforms with balanced economies and improved gamification. With each of these launches, our focus will be on maximizing product quality and achieving the right balance between scarcity, collectibility, and utility -- growing Web3 one superfan at a time.

Our mantras for 2023 are simple: mobile-first, community-driven, and Web3-native. We're also going to be uncompromising about our culture -- the curiosity, pace, and impact that helped Dapper Labs catch lightning in a bottle multiple times is again the bar and will remain so going forward. The shift we've undergone over the past several months has not been easy, but it was necessary to get us in fighting shape for the path ahead. Our recent sprint has shown what we're capable of when we prioritize and remain disciplined about both data and execution quality.

I also wanted to address what you may have seen in the news. We received notice that U.S. District Judge Victor Marrero denied Dapper's motion to dismiss the Friel class action alleging that NBA Top Shots are securities. There is a lot of misinformation circulating about the nature of this ruling. All the ruling means is that the case goes to discovery with absolutely no substantive decision on whether NBA Top Shots are securities. Here is a Twitter thread we posted on this topic and we'll discuss more at our All Hands.

To everyone here: thank you. I'm grateful to have the opportunity to help shape the impact of one of the most transformative technologies of our lifetimes. My commitment is that I'll be here with you every step of the way, that we'll keep improving how we do things, learning from the past, and growing our products and communities into multigenerational success stories we'll all be proud to have helped build.

With gratitude,

Roham