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92 paragraphs in Risk Factors of the 10-K filed Nov 10, 2026 with nothing like them in the 10-K filed Nov 21, 2025. Quoted exactly. Paragraphs that were only edited are under 10-K change.
Compared with the Risk Factors in the latest 10-K of the other 31 Crypto companies: a paragraph with at least half its words the same at another company is called similar, and the companies are listed under it. A paragraph most of them have is marked boilerplate. No line means no other company has one like it. This counts text; it does not say how serious a risk is.
•advances in quantum computing could render the cryptography securing Ethereum, Bitcoin and other blockchain networks vulnerable to attack. If these networks do not timely adopt post-quantum cryptographic standards, malicious actors could derive private keys, steal digital assets or compromise validator operations, and even the perception of such a threat could adversely affect the price, liquidity and adoption of digital assets, including the ETH we hold and stake;
Read in the 10-K ↗
Our shift towards an ETH-focused strategy requires substantial changes in our day-to-day operations and exposes us to new operational risks.
Our shift towards an ETH-focused strategy, including staking, restaking, liquid staking, and other decentralized finance activities, exposes us to new operational risks.
Staking ETH involves holding a certain amount of ETH in a smart contract and running software known as a “validator node.” Validators are randomly selected to propose blocks of transactions to be added to the Ethereum blockchain. Validators earn newly issued ETH as consensus-layer rewards for performing duties such as attesting to and successfully proposing blocks. A validator that successfully proposes a block may also receive execution-layer rewards from transaction priority fees. The Ethereum network also imposes penalties on validators that experience downtime or propose incorrect blocks; these penalties, known as “slashing,” reduce the ETH staked to the validator node. Errors in key management, inadequate slashing protection, or failure to maintain required uptime could reduce rewards or result in the loss of staked ETH.
We may choose to operate our own validator services or delegate our ETH to third-party validation service providers. If we use a third-party validation service, we would share staking rewards with that provider, although it may have more sophisticated technology that could generate greater rewards. In either case, staking increases the risk of loss of ETH, including through slashing penalties, hacking of staking smart contracts, validator failures, and operational or cybersecurity incidents.
The ETH ecosystem rapidly evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup, including software, hardware, key-management and compliance procedures. These changes may require unanticipated costs and cause temporary service disruptions. Technical failures or operational errors could affect our ability to obtain ETH rewards or gas fees and cause us to fail to meet our financial projections.
Staked ETH is subject to lock-up and unbonding periods during which it cannot be withdrawn or sold. We may seek to mitigate this risk through liquid staking arrangements, but liquid staking tokens may not track ETH and could diverge in value, particularly if validators are slashed or the relevant smart contract is compromised. Any of these operational risks could materially and adversely affect our ability to execute our ETH strategy, prevent us from realizing positive returns, and severely harm our financial condition.
Read in the 10-K ↗
•Share Repurchase Program Risk: We have authorized up to $4.0 billion in share repurchases. Repurchases reduce our cash reserves and may limit our ability to fund operations, service preferred stock dividends, or respond to market opportunities.
Read in the 10-K ↗
Our staking and validator operations conducted through MAVAN are subject to significant risks, including slashing, lock-up periods, smart contract vulnerabilities, liquidity constraints, counterparty exposure, and operational failures, any of which could result in a partial or total loss of staked ETH or a material reduction in staking revenue.
Similar paragraph at 1 of 31 other Crypto companies: BTBTRead in the 10-K ↗
native ETH staking, including through MAVAN, and any failure in our validator operations or at a third-party staking provider could result in losses, reputational harm, and reduced revenue.
Similar paragraph at 1 of 31 other Crypto companies: BTBTThrough our MAVAN platform, we operate validator nodes and provide staking infrastructure services. The performance, security, and reliability of MAVAN are critical to our staking operations and revenue. A failure or disruption at MAVAN, including a software or hardware failure, loss of connectivity, cybersecurity incident, power outage, validator downtime, or failure to implement protocol upgrades, could result in loss of staked assets, slashing penalties, reduced rewards, and loss of institutional staking clients.
Similar paragraph at 1 of 31 other Crypto companies: BTBTRead in the 10-K ↗
The Ethereum protocol may be modified in ways that reduce or eliminate staking rewards, and regulatory developments in the United States and abroad may affect our ability to stake ETH or the economic terms on which staking is conducted. Any such changes could materially reduce our staking revenues and the value of our ETH holdings. There can be no assurance that staking yields will remain at levels sufficient to support our current business model or dividend policy, and investors should not place undue reliance on historical staking yields as indicative of future performance.
The Ethereum network is subject to rapidly evolving technology, competitive dynamics, and changing regulatory and market-structure frameworks.
Read in the 10-K ↗
Although we do not currently intend to mine ETH, digital asset validating operations can consume significant amounts of electricity, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for validating operations. Additionally, validators may be forced to cease operations during an electricity shortage or power outage.
Similar paragraph at 1 of 31 other Crypto companies: BTBTAdvances in quantum computing or artificial intelligence could compromise the cryptography securing the Ethereum network, our ETH holdings and our validator operations, which could materially adversely affect our business, financial condition, results of operations and the market price of our securities.
Similar paragraph at 1 of 31 other Crypto companies: BTBTThe Ethereum network relies on cryptographic algorithms to secure transactions, protect digital assets and validate network activity. Advances in quantum computing or artificial intelligence (AI) could eventually make certain of these algorithms vulnerable to attack. The future point at which this is projected to occur is sometimes called "Q-Day." No quantum computer is currently known to be able to compromise Ethereum's cryptographic systems, but such capabilities could emerge sooner than anticipated and with little warning. Advances in artificial intelligence could speed up progress in quantum computing and the development of methods to exploit cryptographic weaknesses. AI could also be combined with quantum capabilities to identify vulnerable targets, automate attacks and exploit vulnerabilities faster than the Ethereum ecosystem, our custodians or our service providers can respond. AI could also lead to new methods of breaking Ethereum's cryptography using conventional computers, without the need for a quantum computer. Such methods could emerge before Q-Day and with little or no warning.
Similar paragraph at 1 of 31 other Crypto companies: BTBTEthereum currently relies on elliptic-curve cryptography to authenticate transactions and secure validator signatures. Sufficiently advanced quantum computers could potentially derive private keys from exposed public keys, allowing unauthorized parties to misappropriate ETH. Such losses would likely be irreversible. The custodial and multisignature arrangements used to protect an owner’s ability to access its ETH generally rely on the same types of cryptography. Diversifying across custodians therefore may not mitigate this risk, and insurance providers may not cover all or any losses resulting from such an event. Quantum-related vulnerabilities could also disrupt transaction processing, impair network security, interrupt our staking operations or prevent us from accessing or withdrawing staked ETH. Our signing infrastructure is designed not to be directly accessible from the internet, and the compromise of one validator key would not by itself expose our other keys. However, if multiple validator keys were compromised, or our signing infrastructure were breached, we could suffer slashing or losses across many validators at once.. A compromise affecting validators we operate for third parties could also lead to customer claims and reputational harm.
Similar paragraph at 1 of 31 other Crypto companies: BTBTThe Ethereum Foundation and the broader Ethereum community are developing new cryptographic protections to help prevent attackers using quantum computers from forging transaction approvals or posing as legitimate validators. Supporting technologies are targeted for production readiness in 2027, with continuing upgrades anticipated thereafter. Through MAVAN, we are contributing to these efforts through the development of Lantern and participating in post-quantum interoperability testing. However, there can be no assurance that effective protections will be adopted in time. Implementing them could require significant protocol changes, coordination among a decentralized community of participants, and migration of wallets and validator keys. Any of these steps could introduce new vulnerabilities, disruptions or forks. Even if such technologies are adopted, we and our custodians and service providers may not implement the necessary changes in a timely or effective manner, and doing so could involve significant costs.
Similar paragraph at 1 of 31 other Crypto companies: BTBTActual or perceived quantum-related vulnerabilities, whether or not exploited, could undermine confidence in Ethereum and cause substantial declines in the value of ETH. Because we measure our digital assets at fair value, any such decline would adversely impact our results of operations. As a substantial majority of our revenue comes from Ethereum staking, any disruption to staking could also materially reduce our staking revenue and liquidity, which could have a material adverse effect on our results of operations and ability to raise capital, and materially adversely affect the market price of our securities.
Similar paragraph at 1 of 31 other Crypto companies: BTBTIn connection with our focus on ETH, we expect to interact with various smart contracts deployed on the ETH network, which may expose us to risks and technical vulnerabilities.
Similar paragraph at 1 of 31 other Crypto companies: BTBTRead in the 10-K ↗
Smart contracts and decentralized applications may contain bugs, security vulnerabilities, poorly designed permission structures, or administrative keys that could be misused or compromised, potentially allowing a bad actor to issue assets, alter contract logic, or otherwise compromise the smart contract or decentralized application. Like all software code, smart contracts are exposed to coding flaws and security vulnerabilities that can lead to the loss of assets held on or transacted through the contract or decentralized application.
DeFi protocols may be governed by token holders or other participants whose incentives may not align with ours. Governance attacks, manipulation of voting or pricing mechanisms, oracle failures, and flash-loan attacks could be used to exploit a protocol or cause losses, including by temporarily manipulating asset prices or collateral values. Exploits stemming from admin key misuse, admin key compromise, or protocol flaws have occurred in the past and may occur in the future.
Any vulnerability in a smart contract we interact with could result in the loss or theft of ETH or other digital assets, an inability to access funds, or an interruption of our operations. Even if we are not directly exposed to a compromised protocol, contagion effects can depress market prices, reduce liquidity, and disrupt counterparties or service providers on which we rely. There is no assurance that the smart contracts we integrate with or rely upon will function as intended or remain secure, and exploitation could have a material adverse effect on our business and financial condition.
Similar paragraph at 1 of 31 other Crypto companies: BTBTOur recent strategic transactions, including the acquisition of Pier Two and the launch of MAVAN, may not be successfully integrated or generate the anticipated benefits, and our projected staking revenue figures are based on assumptions that may prove incorrect.
Similar paragraph at 1 of 31 other Crypto companies: BTBTOn March 24, 2026, we acquired Pier Two Holdings Pty Ltd and launched MAVAN to support our ETH Treasury Strategy. Integrating MAVAN’s validator operations, personnel, technology, systems, controls, and processes may divert management time and resources and result in unexpected costs, delays, failures to retain key personnel, operational deficiencies, or failure to achieve the anticipated benefits of the transactions.
Similar paragraph at 9 of 31 other Crypto companies: ASST, BTBT, CORZ, EXOD, FIGR, GEMI, GLXY, NAKA and 1 moreOur projected staking revenue figures are based on assumptions regarding the amount of ETH staked, staking yields, validator uptime, network rewards, fees, customer adoption, pricing, operating costs, and the timing and success of MAVAN’s development. These assumptions may prove incorrect, and actual staking revenue, margins, cash flow, and financial results may differ materially from our projections.
Similar paragraph at 1 of 31 other Crypto companies: BTBTOur revenue is highly concentrated in ETH staking and validation operations conducted through MAVAN, and any disruption to those operations, decline in staking yields, decline in ETH prices, or adverse protocol change would have a disproportionate impact on our results of operations and financial condition.
Similar paragraph at 1 of 31 other Crypto companies: BTBTFor the fiscal year ended August 31, 2026, revenue from staking and validation represented approximately 97% of our total revenue. As a result, a material disruption to MAVAN or related validator operations, a decline in staking yields, validator downtime, loss of staking clients, or an adverse change to the Ethereum protocol could disproportionately reduce our revenue, liquidity, and results of operations. In addition, because our staking rewards are received in ETH, a decline in ETH prices would reduce the U.S. dollar value of our staking revenue, even if the amount of ETH we earn remains unchanged.
Staking yields are not fixed and may fluctuate with the total amount of ETH staked, protocol upgrades, network transaction volume, priority fees, validator participation, ETH prices, and broader market conditions. Future protocol changes or regulatory developments could further reduce yields or restrict our ability to conduct staking and validation activities.
Regulatory uncertainty regarding the classification and treatment of staking activities and staking rewards in the United States and abroad may subject us to additional compliance obligations, restrict our staking operations, or require changes to MAVAN’s business model.
Similar paragraph at 1 of 31 other Crypto companies: BTBTRegulators in the United States and other jurisdictions may determine that staking, validator operations, staking-as-a-service, or staking rewards constitute securities, commodities, money transmission, investment advisory, or other regulated activities. Such determinations could require registration, licensing, reporting, custody, capital, consumer-protection, tax, sanctions, or anti-money-laundering measures; increase compliance costs; restrict or suspend our staking operations; or require us to modify or discontinue aspects of MAVAN.
These developments could also affect the legal or tax treatment of staking rewards, the economics of validator operations, and the services we can offer to clients. We may be required to restructure MAVAN’s business model, limit the assets or customers that it services, or incur substantial costs to comply with new requirements, and we cannot predict whether any such changes would permit MAVAN to operate at its current scale or profitability.
Boilerplate Similar paragraph at 16 of 31 other Crypto companies: ABTC, ASST, BKKT, BTBT, CRCL, DJT, GEMI, GLXY and 8 moreWe rely on infrastructure providers and key personnel to support MAVAN’s validator operations.
Similar paragraph at 1 of 31 other Crypto companies: BTBTMAVAN depends on third parties for infrastructure, connectivity, hosting, software, security, monitoring, and other services, and depends on personnel with specialized technical and operational knowledge. Any failure, delay, service interruption, cyber incident, dispute, insolvency, termination, or deterioration in performance could impair validator uptime, reduce rewards, increase costs, or require us to transition services on short notice.
Our ability to operate MAVAN also depends on recruiting, training, and retaining qualified engineers, validators, cybersecurity professionals, and other personnel. Competition for this talent is intense, and the loss of key personnel or inability to maintain adequate staffing could delay upgrades, weaken controls, increase operational errors, and adversely affect our ability to provide reliable staking and validation services.
MAVAN’s planned expansion from an internally-focused staking platform to a commercial staking-services provider introduces new customer acquisition, competitive, service-level, and reputational risks.
A commercial staking-services business requires us to acquire and retain customers, compete with established providers, price services appropriately, comply with customer-specific requirements, and satisfy service-level and reporting commitments. We may incur significant sales, onboarding, support, compliance, insurance, and technology costs before generating sufficient revenue, and there is no assurance that we will attract customers or operate the commercial platform at the scale or profitability we anticipate.
Service outages, slashing events, security incidents, failures to meet service levels, disputes over rewards or fees, or the loss or impairment of customer assets could result in claims, indemnity obligations, regulatory scrutiny, customer attrition, and reputational harm. These risks may be amplified as MAVAN serves third-party customers rather than only our own treasury.
Similar paragraph at 1 of 31 other Crypto companies: GEMIRead in the 10-K ↗
We face risks relating to the custody of our ETH, including the loss or destruction of private keys required to access our ETH and cyberattacks or other data loss relating to our ETH, including smart contract related losses and vulnerabilities.
Similar paragraph at 1 of 31 other Crypto companies: BTBTWe hold our ETH with regulated custodians that have duties to safeguard our private keys, and use multisignature keys to prevent unauthorized access in accordance with our treasury operations. Our custodial services contracts do not restrict our ability to reallocate our ETH among our custodians, and our ETH holdings may be concentrated with a single custodian from time to time. We continually seek to engage additional custodians to achieve greater diversification, but multiple custodians may utilize similar wallet infrastructure, cloud service providers or software systems, which could increase systemic technology risk.
Similar paragraph at 1 of 31 other Crypto companies: BTBTIf the availability of custodians that can safely custody our ETH decreases, including because of regulatory developments or enforcement actions, we may need to enter into less favorable agreements or take other measures to custody our ETH. Our ability to diversify custodial services could be materially adversely affected. Although we conduct due diligence on custodians and smart contract platforms, that diligence may not uncover operational deficiencies, hidden vulnerabilities, or legal noncompliance.
Similar paragraph at 1 of 31 other Crypto companies: BTBTOur use of custodians exposes us to the risk that ETH held on our behalf could be subject to insolvency proceedings and that we could be treated as a general unsecured creditor, inhibiting our ability to exercise ownership rights. Applicable insolvency law is not fully developed with respect to digital assets held in custodial accounts, and commingling or contested ownership claims could materially delay access to our ETH. Recent high-profile failures and hacks of digital asset service providers, including the February 2025 Bybit hack, illustrate the risk of unauthorized access, theft, operational failure, and contested claims. Any loss associated with such insolvency proceedings may not be covered by insurance.
Similar paragraph at 1 of 31 other Crypto companies: BTBTRead in the 10-K ↗
Our custody arrangements and any smart contract platforms we use may expose us to additional technical and legal risks. A smart contract vulnerability, coding error, exploit, or poorly designed permission structure could result in loss or theft of ETH or other digital assets, an inability to access funds, or an interruption of our operations, and the loss may be irreversible. There is no assurance that any custodian, wallet infrastructure, or smart contract platform will function as intended or remain secure.
Insurance coverage may be limited by policy amounts, exclusions, deductibles, insurer solvency, and the circumstances of a loss, and may not cover losses arising from insolvency, commingling, private-key compromise, smart contract exploits, or protocol failures. Our assets may be insufficient to cover amounts exceeding our insurance coverage or any custodian’s applicable coverage, and we may be exposed to substantial uninsured losses. Digital assets held with custodians and trade execution partners do not enjoy the same protections as cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.
Similar paragraph at 1 of 31 other Crypto companies: BTBTRead in the 10-K ↗
condition. In particular, the regulatory treatment of ETH staking, validator operations, and staking-as-a-service activities remains uncertain. The SEC, CFTC, and state regulators have not provided definitive guidance on whether staking activities constitute securities, commodities, or other regulated activities. Adverse regulatory determinations or enforcement actions could require us to register, restructure, or discontinue our staking operations, which would materially affect our business and results.
Similar paragraph at 1 of 31 other Crypto companies: BTBTRead in the 10-K ↗
Changes in geopolitical, social or general economic conditions, including macroeconomic conditions, could adversely affect our business.
Our business, financial condition, results of operations, liquidity, access to capital, and the market price of our securities may be adversely affected by macroeconomic conditions, including changes in interest rates, inflation, monetary and fiscal policy, currency devaluations, trade restrictions, tariffs, and global economic uncertainty. These conditions may affect the cost and availability of capital, demand for digital assets and related services, technology and energy costs, and investor sentiment.
Geopolitical conflict, including conflicts in Ukraine, Iran, and Gaza, and the global response to those conflicts could result in sanctions, trade restrictions, supply disruptions, cyber incidents, market volatility, or changes in energy and technology availability. Trade policies and tariffs affecting technology supply chains, and other events and circumstances, including political or social instability, natural disasters, pandemics, or disruptions to financial and digital-asset markets, could adversely affect our operations, the value and liquidity of digital assets, and investor sentiment.
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The terms of our 9.50% Redeemable Preferred Stock may limit our operational and financial flexibility.
In June 2026, we issued 3,500,000 shares of our 9.50% Redeemable Preferred Stock with a stated amount of $100 per share. The Preferred Stock carries cumulative dividend rights at an annual rate of 9.50% and ranks senior to our common stock with respect to dividend payments and rights upon liquidation. Our obligation to pay dividends on the Preferred Stock may reduce the cash available for common stock dividends, share repurchases, digital asset acquisitions, and other general corporate purposes. If we fail to pay dividends on the Preferred Stock four quarterly periods, the holders will have the right to elect one additional director to our Board, which could affect our governance and strategic decision-making. If we fail to pay dividends on the Preferred Stock six quarterly periods, the holders will have the right to elect two additional directors to our Board. The liquidation preference and dividend priority of the Preferred Stock may make it more difficult for us to raise additional equity capital in the future on terms favorable to our common stockholders.
Staking yield volatility may materially and adversely affect our ability to pay dividends on the Preferred Stock.
A significant portion of our revenue and cash generation is derived from staking rewards earned on our ETH holdings. Staking rewards are not fixed and may fluctuate based on the total amount of ETH staked across the network, changes to the Ethereum protocol, network transaction volume and priority fees, validator participation, and broader macroeconomic and cryptocurrency market conditions. As the total amount of ETH staked increases, the reward rate per validator generally decreases, which could materially reduce the yield we earn on our staked assets.
Because we rely on staking income to fund operating expenses and dividend payments, a sustained decline or period of heightened volatility in staking yields could impair our ability to meet obligations and maintain dividends. Staking rewards are denominated in ETH, so a decline in ETH’s price concurrent with a decline in staking yields would compound the
adverse effect on cash flow and dividend coverage. The Board retains discretion over the declaration and payment of dividends, and there can be no assurance that dividends will be declared or paid in any particular amount or at all.
Future Ethereum upgrades, changes to issuance or reward mechanisms, new staking paradigms, regulatory developments, and continued issuance of ETH could further reduce staking yields or the price and liquidity of ETH. There can be no assurance that staking yields will remain sufficient to support our current business model or dividend policy, and historical staking yields should not be viewed as indicative of future performance.
Our option strategies and strategic investments expose us to additional volatility and counterparty risks.
We generate ETH option premium income through option strategies on our ETH holdings. These strategies expose us to changes in ETH prices and volatility, exercise and settlement risk, collateral requirements, liquidity constraints, and the creditworthiness and performance of counterparties. Losses or adverse fair-value changes could offset premiums received, reduce available liquidity, and impair our ability to cover dividend payments on the Preferred Stock.
Our strategic investments may be illiquid, may lose some or all of their value, and may introduce earnings volatility unrelated to ETH prices. We may be unable to realize value from these investments when needed, and losses or additional capital requirements could reduce cash available for operations or dividends.
We may be unable to access capital markets on acceptable terms, which could increase the cost of issuing parity or junior preferred stock and adversely affect our ability to maintain dividends on the Preferred Stock.
Our ability to fund operations, acquire ETH, support MAVAN, and pay dividends may depend on our ability to raise equity or debt capital. Adverse market conditions, declines in ETH or our securities, unfavorable investor sentiment, or restrictions affecting digital-asset issuers could limit access to capital or increase financing costs. If we cannot raise capital on acceptable terms, we may need to sell ETH or other assets at unfavorable prices, reduce investments and operations, or defer or limit dividend payments.
We may issue additional preferred stock, including parity or junior preferred stock, or other securities to raise capital or acquire ETH and other digital assets. The terms of future securities may increase our financing costs, dilute or subordinate existing holders, or impose restrictions that affect dividend payments. If we cannot issue such securities on acceptable terms, our liquidity and ability to maintain dividends on the Preferred Stock could be materially adversely affected.
Read in the 10-K ↗
Our efforts to remediate material weaknesses in our internal control over financial reporting may be unsuccessful or result in increased costs and demands on management resources.
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We face competition from other public and private companies pursuing digital asset treasury strategies, including ETH-focused treasuries, as well as from spot and staking exchange-traded products. These competitors may have greater financial resources or operational scale than we do, and the emergence of regulated investment vehicles providing exposure to ETH could reduce demand for our securities, including the Preferred Stock.
Read in the 10-K ↗
Our acquisition of Pier Two and the MAVAN platform may not achieve the anticipated benefits, and integration risks could adversely affect our operations.
On March 24, 2026, we completed the acquisition of Pier Two Holdings Pty Ltd. The success of the acquisition depends on our ability to integrate MAVAN’s operations and personnel, retain key technical personnel, and achieve anticipated synergies. Integration may be complicated by differences in business practices, technology platforms, and regulatory environments, including Australian regulatory requirements. If we are unable to successfully integrate MAVAN’s operations or achieve the anticipated benefits of the acquisition, our business, results of operations, and financial condition could be adversely affected. In addition, we recorded goodwill of approximately $21.7 million in connection with the acquisition, which is subject to impairment testing. If the MAVAN platform does not perform as expected or market conditions deteriorate, we may be required to record impairment charges that could materially affect our results of operations.
We have obligations to pay dividends on our 9.50% Redeemable Preferred Stock, and our ability to make such payments depends on our liquidity and financial condition.
In June 2026, we issued 3,500,000 shares of our 9.50% Redeemable Preferred Stock, which carries annual dividend obligations. Our ability to pay dividends on the Preferred Stock depends on our liquidity, including cash on hand, staking yields, and access to capital markets. Volatility in ETH prices, changes in staking economics, or disruptions to our capital market access could impair our ability to meet dividend obligations, which could adversely affect the market price of the Preferred Stock and our ability to access capital on favorable terms.
We may be deemed an investment company under the Investment Company Act of 1940, which would subject us to significant regulatory restrictions.
Our business strategy involves the accumulation and holding of ETH and other digital assets as our primary treasury reserve assets. If digital assets were to be deemed “investment securities” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or if the SEC or a court were to determine that our business activities constitute those of an investment company, we could be required to register under the Investment Company Act. Registration as an investment company would impose significant regulatory requirements and restrictions on our operations, including limitations on capital structure, the ability to transact with affiliates, compensation arrangements, and the ability to issue securities, any of which could materially limit our ability to pursue our ETH Treasury Strategy. We believe that we are not currently required to register as an investment company based on the nature of our operating activities, including our staking and validation operations, advisory services, and BTC mining activities; however, we cannot assure you that the SEC or a court would agree with our analysis. Changes in the composition of our assets, the nature of our activities, or applicable legal or regulatory standards could cause us to become subject to Investment Company Act regulation, which would have a material adverse effect on our business and financial condition.
Our derivative activities, including ETH-denominated option contracts, involve risks that could result in significant losses.
During fiscal year 2026, we began entering into ETH-denominated option contracts, primarily through the sale of put options, as part of our digital asset treasury strategy. These derivative activities expose us to risks including unfavorable movements in ETH prices, counterparty credit risk, margin and collateral requirements, and the potential for significant mark-to-market losses. Our derivative positions could result in losses that exceed our premium income, impair our liquidity, and adversely affect our financial condition and results of operations.
Our strategic investments in early-stage blockchain companies may result in significant losses and increased earnings volatility.
We have made strategic equity investments in early-stage blockchain and digital asset companies, which we refer to as “moonshot” investments. As of August 31, 2026, we had equity investments measured at cost of approximately $194.4 million and equity method investments measured at fair value of approximately $77.1 million. These investments are inherently speculative and may result in partial or total loss of our investment. In particular, our equity method investment in Eightco Holdings Inc. is measured at fair value, and changes in Eightco’s stock price are recognized directly in our earnings. Adverse developments at any of our portfolio companies could result in impairment charges, fair value losses, and additional sources of earnings volatility unrelated to our core ETH treasury and staking operations.
The change in our fiscal year-end may complicate period-to-period comparisons and impose additional reporting obligations.
On July 9, 2026, our Board approved a change in our fiscal year-end from August 31 to December 31, effective following the completion of the fiscal year ending August 31, 2026. The transition will require us to file a transition report on Form 10-KT for the four-month transition period from September 1, 2026 through December 31, 2026. The shortened transition period may complicate period-to-period comparisons of our financial results and could create challenges in meeting filing deadlines, particularly given the concurrent transition of our independent audit firm. Additionally, the change may affect the timing of our annual meeting, proxy statement, and other disclosure obligations.
We depend on several third-party service providers, independent contractors and consultants for various administrative and operational functions and expertise.
Our business and management team rely on several third-party infrastructure providers, independent contractors and consultants to provide valuable advisory and consulting services to our management team regarding the management of our digital asset portfolio. Under our Digital Asset Consulting Agreement (the "DACA") with Ethereum Tower LLC (“ETH Tower”), we have agreed to pay consulting fees calculated based on the value of digital assets managed. The DACA provides for a ten-year initial term and may be terminated under limited circumstances, with liquidated damages payable if we elected to terminate without cause prior to expiration. Separately, we have agreements with multiple third-party custodial services providers as well as several administrative services providers which support our management team. If one or more of our third-party service providers fails to perform its obligations, experiences operational disruptions, or if a critical operational, consulting and/or contractual relationship is terminated, we may face significant costs and operational disruptions that could materially affect our business, and we may be unable to find suitable replacement services at comparable cost to our existing providers.
Our significant unrealized losses and accumulated deficit may adversely affect investor confidence, our stock price, and our ability to access capital.
As of August 31, 2026, we had an accumulated deficit of approximately $6.0 billion, driven primarily by unrealized fair value losses on our digital asset holdings under ASC 350-60. While these losses are primarily non-cash in nature and do not reflect actual dispositions of our digital assets, the reported net losses may adversely affect investor confidence, analyst coverage, index inclusion, and the willingness of counterparties to transact with us. Our accumulated deficit may also affect our ability to pay dividends on our common stock or Preferred Stock, maintain compliance with listing standards, and access capital markets on favorable terms.
Cybersecurity incidents may compromise our systems, or those of our strategic partners or third-party vendors, and could result in the loss of digital assets, business disruption, regulatory penalties, and reputational harm.
Our operations depend on the security, reliability, and continuous availability of our information technology systems, digital asset custody infrastructure, validator nodes, and the systems of our third-party service providers, including custodians, cloud computing providers, staking infrastructure operators, and other vendors. We routinely face cybersecurity threats that could compromise the confidentiality, integrity, or availability of our systems and data, including threats from organized criminal groups, nation-state actors, hacktivists, and other malicious parties. These threats are becoming increasingly sophisticated and may involve ransomware, phishing, social engineering, credential theft, distributed denial-of-service attacks, supply chain compromises, and the exploitation of software vulnerabilities, including zero-day exploits. The rapid development and deployment of artificial intelligence and machine learning tools may further increase the frequency, sophistication, and effectiveness of cyberattacks.
A successful cyberattack or other security incident affecting our systems, or those of our custodians, validator infrastructure providers, or other third-party service providers, could result in the theft, loss, or unauthorized transfer of our digital assets, including ETH and BTC; the compromise or destruction of private keys or other cryptographic credentials; unauthorized access to sensitive business, financial, or personal information; disruption of our validator operations, staking activities, or treasury management functions; or damage to our technology infrastructure. As of August 31, 2026, we held digital assets with a fair value of approximately $14.6 billion, and any successful attack targeting our digital asset holdings or custody infrastructure could result in significant and potentially irrecoverable financial losses.
We may not be able to anticipate, detect, or respond to all cyberattacks or security incidents in a timely manner. The costs of investigating and remediating cybersecurity incidents, enhancing our defenses, and complying with applicable breach notification and data protection laws may be substantial. In addition, a cybersecurity incident could result in regulatory investigations, enforcement actions, litigation, loss of customer and counterparty confidence, and reputational harm. Our insurance coverage may not be adequate to cover all losses arising from a cybersecurity incident. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, cash flow, liquidity, prospects, and the trading price of our securities.
Read in the 10-K ↗
Our success depends on the continued services of our senior management team, including our Chief Executive Officer, Chief Financial Officer, and other key executives, as well as the specialized technical, operational, and compliance
personnel necessary to operate our digital asset treasury, staking infrastructure, and validator operations. Competition for experienced blockchain, digital asset, cybersecurity, and financial technology professionals is intense, and we may be unable to attract, retain, or replace qualified employees on acceptable terms. Much of MAVAN’s technical expertise was obtained through the Pier Two acquisition, and there can be no assurance that we will be able to retain key technical and operational personnel acquired in that transaction, particularly given the competitive market for blockchain infrastructure talent.
The loss of one or more key executives or technical personnel, or our inability to attract and retain qualified employees, could disrupt our operations, delay the execution of our strategic initiatives, impair our ability to maintain and expand our validator infrastructure, and adversely affect our competitive position. We do not maintain key-person life insurance on any of our executives or employees. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and the trading price of our securities.
Intellectual property disputes or alleged infringements could disrupt our business, divert management resources, and result in significant costs.
Our business relies on proprietary technology, trade secrets, and know-how related to our validator operations, staking infrastructure, digital asset treasury management, and related systems. We may be unable to adequately protect our intellectual property rights, and unauthorized parties may attempt to copy or otherwise obtain and use our proprietary technology. In addition, third parties may assert that our technology, products, or services infringe, misappropriate, or otherwise violate their intellectual property rights. The defense of intellectual property claims, whether or not meritorious, can be time-consuming and costly, and could divert management attention from our business operations. An adverse outcome in any such proceeding could require us to pay significant damages, enter into licensing arrangements on unfavorable terms, or cease using certain technology, any of which could have a material adverse effect on our business, financial condition, and results of operations.
We are subject to data privacy and protection laws and regulations, and any failure to comply could result in regulatory penalties and reputational harm.
We collect, process, store, and transmit certain personal and sensitive information in connection with our operations, including employee data, investor information, and data related to our business partners and counterparties. We are subject to a variety of federal, state, and foreign laws and regulations relating to data privacy, data protection, and information security, including state consumer privacy laws and international data protection regulations. These laws and regulations continue to evolve and may impose new or additional obligations on our business. Compliance with these requirements may require significant resources and expenditures. Any failure or perceived failure to comply with applicable data privacy and protection laws, or any security breach involving personal or sensitive information, could result in regulatory investigations, enforcement actions, fines, litigation, and reputational damage, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Litigation, governmental investigations, enforcement actions, and contractual disputes could expose us to significant liabilities and divert management resources.
We may from time to time be subject to litigation, governmental investigations, enforcement actions, and contractual disputes arising in the ordinary course of our business or in connection with our digital asset activities, staking operations, capital markets transactions, or strategic investments. The digital asset industry has been subject to heightened regulatory scrutiny and enforcement activity, and we could become the target of investigations, subpoenas, or enforcement proceedings by the SEC, CFTC, FinCEN, state regulators, or other governmental authorities. The costs of defending against such claims and proceedings, even if ultimately resolved in our favor, can be substantial and may divert management’s time and attention from our operations. An unfavorable outcome in any such matter could result in significant monetary damages, injunctive relief, consent orders, or other remedies that could have a material adverse effect on our business, financial condition, results of operations, and the trading price of our securities.
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142 paragraphs in the 10-Q filed Jul 14, 2026 with nothing like them in the 10-Q filed Apr 14, 2026 (at least half the words must differ; new numbers alone do not count). Quoted exactly, grouped by the item heading above them. This is text that changed, not a judgement of how serious it is.
Delaware 84-3986354 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 800 Connecticut Avenue 06854 Norwalk, CT (Address of principal executive offices) (Zip Code)
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This quarterly report on Form 10-Q (the "Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to future events or future financial performance of Bitmine Immersion Technologies, Inc. (the "Company," "Bitmine," "BMNR," "we," "us," or "our"), and can ordinarily be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "continue,” “objective,” “seek,” “strategy" or the negative of these terms or other similar words. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Some of the forward-looking statements contained in this Report include, but are not limited to, statements relating to:
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• our ETH Treasury Strategy and our objective to grow our net ETH position over time, including our expectations regarding staking yields, treasury security, and capital allocation;
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• our expectations regarding staking and validation operations, including staking rewards, validator participation rates, protocol parameters, and the performance of the MAVAN platform;
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• our belief that we will have sufficient liquidity to fund operations for at least the next 12 months based on our current operating plan, expected cash on hand, anticipated operating cash flows, and access to capital under our shelf registration and ATM Program;
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• our expectations regarding material cash requirements, including fees for digital asset management, capital expenditures, working capital requirements, public company costs, operating expenses, and dividend obligations on our Series A Preferred Stock;
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• our intentions regarding the use of proceeds from our Series A Preferred Stock offering and other equity financings to support our digital asset treasury strategy, strategic investments, working capital requirements, and general corporate purposes;
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• our expectations regarding the Pier Two acquisition, including the expected benefits of the acquisition and integration with the MAVAN platform, and the allocation of purchase consideration to acquired assets and liabilities;
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• our expectations regarding strategic “moonshot” investments and their potential to support long-term value creation and complement our ETH-focused operating model;
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• our expectations regarding the expansion of MAVAN to serve institutional investors, custodians, and ecosystem partners, and our ability to attract and retain institutional staking clients;
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• our expectations regarding the remediation of material weaknesses in our internal control over financial reporting and the timing and effectiveness of remediation efforts;
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• our expectations regarding ETH option strategies, the generation of option premium income, and the returns on our strategic investments, including moonshot investments;
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• our expectations regarding key trends and uncertainties, including Ethereum protocol upgrades, Layer 2 activity, institutional adoption trends, regulatory developments, potential classification as an investment company under the Investment Company Act of 1940, and evolving U.S. and non-U.S. regulatory frameworks applicable to digital assets, staking, and custody.
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The forward-looking statements in this Report are based on management’s current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to:
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• our digital asset holdings, including price volatility in ETH, BTC and other digital assets, liquidity constraints, and the potential for significant unrealized losses or impairments;
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• the evolving regulatory environment for digital assets, staking, custody, and blockchain infrastructure, including potential adverse legislation or enforcement actions;
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• our ability to successfully integrate the Pier Two acquisition and achieve the anticipated benefits;
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• cybersecurity, data privacy, custody arrangements, and the security of our digital asset holdings;
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• counterparty credit and operational risks, including custodians, pool operators, hosting partners, and joint venture partners;
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• our reliance on third-party infrastructure providers, including Ethereum Tower LLC and cloud computing providers, to operate validator nodes and provide staking services;
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• our ability to access capital markets on favorable terms or at all, including through our shelf registration and ATM Program;
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• Ethereum protocol developments, including protocol upgrades, changes to staking economics, and Layer 2 activity;
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• the concentration of our revenue in ETH staking and validation operations conducted through MAVAN, and our ability to diversify revenue sources;
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• the impairment of goodwill and intangible assets acquired in connection with the Pier Two acquisition, including the assumptions underlying our fair value estimates and impairment testing;
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• our ability to pay dividends on our Series A Preferred Stock, including staking yield volatility, ETH price fluctuations, and liquidity constraints affecting dividend coverage;
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• competition, technology changes, and our ability to attract and retain qualified personnel, including key technical personnel acquired in the Pier Two acquisition; and
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• other risks, including those described in Item 1A. - Risk Factors in our Annual Report on Form 10-K and those described from time to time in our other filings with the SEC.
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Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on our forward-looking statements.
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May 31, 2026 August 31, 2025 ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── (unaudited) ASSETS Current assets: Cash and cash equivalents $ 340,289 $ 511,999 Cash collateral related to open derivative positions 100,125 — Prepaid expenses and other current assets 4,847 1,008 Total current assets 445,261 513,007 Digital assets 10,871,934 8,281,530 Equity investments measured at cost 191,761 — Equity method investment measured at fair value 93,207 — Operating lease right-of-use asset 1,294 — Goodwill 15,006 — Intangible assets, net 11,110 — Other assets 680 516 Total assets $ 11,630,253 $ 8,795,053 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accrued liabilities $ 10,230 $ 8,894 Contract liabilities — 1,067 Other current liabilities 1,908 — Total current liabilities 12,138 9,961 Operating lease liability, net of current portion 1,216 — Deferred tax liability — 92,295 Warrant liability 2,087 — Other non-current liabilities 14,687 — Total liabilities $ 30,128 $ 102,256 Commitments and Contingencies (Note 14) Stockholders' Equity: Preferred stock, par value $0.0001 per share, 20,000,000 shares authorized; no shares issued and outstanding as of May 31, 2026 and August 31, 2025 $ — $ — Common stock, $0.0001 par value, 50,000,000,000 and 500,000,000 shares authorized; 579,652,432 and 232,412,324 shares issued and outstanding as of May 31, 2026 and August 31, 2025 respectively 58 23 Additional paid-in capital 20,371,935 8,355,382 Accumulated earnings (deficit) (8,772,950) 337,392 Accumulated other comprehensive income 534 — Total Bitmine Immersion's stockholders' equity 11,599,577 8,692,797 Non-controlling interests 548 — Total stockholders' equity $ 11,600,125 $ 8,692,797 Total liabilities and equity $ 11,630,253 $ 8,795,053
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Weighted-average number of common shares outstanding - diluted 551,788,656 2,006,202 443,947,604 2,185,206 Other comprehensive income, net of tax Foreign currency translation adjustments 545 — 545 — Other comprehensive income 545 — 545 — Comprehensive loss $ (83,050) $ (623) $ (9,105,558) $ (5,715) Less: Comprehensive loss attributable to the non-controlling interest (8) — (8) — Comprehensive loss attributable to controlling stockholders of Bitmine Immersion Technologies, Inc. $ (83,042) $ (623) $ (9,105,550) $ (5,715)
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Bitmine Immersion Technologies, Inc. and its subsidiaries ("Bitmine" or the "Company") is a blockchain technology infrastructure company operating across institutional digital asset staking and validation services, bitcoin mining, and strategic digital asset management. The Company's primary operations focus on providing institutional-grade staking and validation infrastructure - through which it earns staking rewards and validation income - alongside bitcoin mining activities. Bitmine also holds digital assets strategically, generating yield on those holdings to support liquidity and capital formation. During 2025, the Company expanded its blockchain infrastructure capabilities, including the development and deployment of its institutional staking and validation platform. The Company's activities further include investments in early-stage blockchain opportunities ("moonshot" investments) and ancillary mining, hosting, and consulting services.
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On March 24, 2026, the Company acquired all of the issued and outstanding shares of Pier Two Holdings Pty Ltd (“Pier Two”), an Australian blockchain infrastructure company, through MAVAN Holdings LLC (formerly Standard Validator LLC) ("MAVAN Holdings"), a consolidated subsidiary of the Company. Pier Two provides non-custodial staking infrastructure, validator operations, staking-as-a-service, and related technology services for Ethereum and other supported digital asset networks. The acquisition expands the Company’s operations into institutional staking infrastructure and validator services. See Note 3 - Acquisition for additional information.
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In connection with the Company’s staking infrastructure strategy, the Company launched MAVAN, or Made in America Validator Network, its proprietary institutional-grade Ethereum staking platform. MAVAN is designed to provide staking infrastructure to institutional investors, custodians, and ecosystem participants, with a focus on security, performance, and resilience. Following the acquisition, Pier Two joined the MAVAN platform and began operating under the MAVAN brand. The Company expects the acquisition and the MAVAN platform to support its Ethereum treasury strategy and expand its ability to provide validator and staking infrastructure services.
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The Company holds a 98% ownership interest in MAVAN Holdings. The remaining 2% ownership interest is held by Ethereum Tower LLC ("Eth Tower") and is presented as a noncontrolling interest in the accompanying condensed consolidated financial statements.
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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
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The most significant estimates relate to the determination of fair value of derivative instruments linked to digital assets, fair value of the equity method investment, valuation of goodwill and intangible assets acquired in business combinations, calculation of stock-based compensation, recoverability of long-lived assets, income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
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Effective December 1, 2025, the first day of the Company's second quarter of fiscal year 2026, the Company changed its financial reporting cutoff convention from 12:00 a.m. Eastern Time ("ET") to 12:00 a.m. Coordinated Universal Time ("UTC"). The change was made in connection with the implementation of the Company's treasury sub-ledger and to better align the cutoff convention with industry practices. The Company applies the UTC reporting cutoff convention on an entity-wide basis; however, the substantive accounting impact is primarily limited to items measured using continuously traded market inputs, principally the Company's digital assets. The change has been applied prospectively and, accordingly, prior-period amounts have not been adjusted.
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The Company determined that the change represents a change in financial reporting cutoff convention and that prospective application is appropriate. Accordingly, prior-period amounts have not been adjusted.
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Had the Company continued to apply the ET reporting cutoff convention, the carrying value of the Company's digital assets as of February 28, 2026 would have been $ 225 million higher. As a result, the unrealized loss recognized on digital assets for the three and six months ended February 28, 2026 would have been $ 225 million lower, and basic and diluted loss per share would have been $ 0.50 and $ 0.58 lower, respectively. The accounting impact of the change on other balance sheet and income statement line items was not significant.
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Following the acquisition of Pier Two and the launch of MAVAN, the Company expanded its operating model while maintaining its role as the principal node operator. Through this acquisition, the Company broadened its blockchain node operations beyond Ethereum.
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The digital assets earned represent non-cash consideration and are measured at contract inception. As the principal node operator, the Company recognizes the full amount of staking rewards generated by the blockchain protocol as revenue, with any amounts distributed, delegators or other network participants recognized as cost of sales.
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The Company applies the provisions of ASC 805, Business Combinations, in accounting for its acquisitions. The assets acquired and liabilities assumed are recognized at their acquisition date fair values, and goodwill is measured as the excess of consideration transferred over the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which shall not exceed one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Company’s consolidated statements of operations and comprehensive loss.
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The Company uses all available information to estimate fair values, including quoted market prices, the carrying value of acquired assets and assumed liabilities and valuation techniques such as discounted cash flows. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as the useful lives of the assets acquired, can materially impact the Company’s financial condition or results of operations. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed.
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The Company may be required to post cash collateral with counterparties in connection with its ETH option contracts. Cash collateral posted is accounted for separately from the related derivative instrument and is not offset against derivative assets or liabilities, regardless of the existence of a master netting arrangement. Cash collateral posted is presented separately on the condensed consolidated balance sheets and classified based on its expected release date. Cash flows associated with derivative instruments, including settlements and option premiums paid or received, are classified as investing activities in the condensed consolidated statements of cash flows. Cash collateral paid is classified as an investing activity, and cash collateral received is classified as a financing activity.
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As of May 31, 2026, the Company's outstanding ETH option contracts were not designated as hedging instruments. The fair value of the Company's derivative instruments were as following:
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loss if the carrying amount is not recoverable. Dividends are recognized in earnings when the Company’s right to receive payment is established, and gains or losses on disposals are recognized in earnings when realized.
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For equity investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but does not control the investee, the investment qualifies for the equity method of accounting under ASC 323, Investments - Equity Method and Joint Ventures. The ability to exercise significant influence is presumed to exist when the Company holds 20% or more of the investee’s voting common stock, and is also evaluated based on qualitative indicators, including representation on the investee’s board of directors, participation in policy-making processes, material intra-entity transactions, interchange of managerial personnel, and the extent of the Company’s ownership relative to the concentration of other shareholdings. Under the equity method, the investment is initially recorded at cost and subsequently adjusted for the Company’s share of the investee’s net earnings or losses, which are recognized in earnings, and reduced by distributions received. The carrying value of the investment is also adjusted for the Company’s share of changes in the investee’s other comprehensive income or loss. The Company evaluates equity method investments for impairment whenever indicators of impairment are present.
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For an investment that qualifies for the equity method, the Company has elected the fair value option under ASC 825-10, Financial Instruments. The fair value option is elected on an instrument-by-instrument basis. The fair value option may be elected on the date the investment first becomes subject to the equity method of accounting and, once elected, is irrevocable. When the fair value option is elected, the Company measures its entire equity interest in the investee - including any additional interests subsequently acquired - at fair value in accordance with ASC 820, Fair Value Measurement, rather than under the equity method. The investment is remeasured to fair value at each reporting date, with changes in fair value (unrealized gains and losses) recognized in earnings in the period of change. Upfront costs and fees related to an item for which the fair value option is elected are recognized in earnings as incurred. Dividends are recognized in earnings when the Company’s right to receive payment is established, and realized gains and losses on disposal are recognized in earnings when realized.
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Intangible assets are initially recorded at their estimated fair values as of the acquisition date and are amortized on a straight-line basis over their estimated useful lives. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
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Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment at least annually and more frequently if events or changes in circumstances indicate that impairment may exist. The Company may perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If necessary, the Company performs a quantitative impairment test and recognizes an impairment loss for the amount by which the carrying amount of the reporting unit exceeds its fair value, limited to the amount of goodwill allocated to the reporting unit.
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On March 24, 2026 (the “Acquisition Date”), the Company acquired 100 % of the issued and outstanding equity interests of Pier Two pursuant to a Share Purchase Agreement. Immediately prior to closing, all outstanding options to purchase Pier Two ordinary shares were accelerated and exercised.
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The estimated total consideration transferred was $ 27.8 million and consisted of (i) cash consideration of $ 6.0 million, subject to post-closing adjustment, (ii) 501,545 shares of the Company's common stock with an Acquisition Date fair value of $ 10.5 million, subject to a six-month lock-up with monthly releases thereafter, (iii) deferred consideration with an estimated fair value of $ 9.5 million, payable in twelve equal quarterly installments over 36 months, with 75 % payable in cash and 25 % payable in shares of the Company’s common stock, and (iv) contingent earnout consideration with an estimated fair value of $ 1.8 million, payable in shares of the Company’s common stock upon achievement of specified annual recurring revenue targets during the twelve months following the Acquisition Date. The fair value of the common stock consideration was determined based on the quoted market price of the Company's common stock on the Acquisition Sate. The undiscounted amount payable under the contingent earnout arrangement ranges from $ 0 to $ 11.8 million.
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The acquisition is accounted for as a business combination in accordance with ASC 805, Business Combinations. The Company has preliminarily allocated the consideration transferred to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date, with excess recorded as goodwill. Goodwill of $ 14.7 million primarily represents expected synergies from integrating Pier Two's staking platform and validator operations with the Company's digital asset treasury and staking operations, including operational efficiencies, expanded staking capabilities, future growth opportunities, and the value of the assembled workforce that does not qualify for separate recognition as an identifiable intangible asset. None of the goodwill recognized in connection with the acquisition is expected to be deductible for income tax purposes.
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As of May 31, 2026, the purchase price allocation remains preliminary as the Company continues to evaluate the fair value of identifiable intangible assets, certain assets acquired and liabilities assumed, and contingent consideration. During the measurement period, provisional amounts may be adjusted to reflect new information about facts and circumstances that existed as of the Acquisition Date, with a corresponding adjustment to goodwill. The preliminary
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purchase price allocation, including identifiable intangible assets consisting primarily of developed technology, customer relationships, and other intangible assets, is presented below.
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Fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 166 Other current assets 560 Investments 3,039 Digital assets 1,981 Other assets 339 Intangibles - Technology 4,675 Intangibles - Customer relationships 6,225 Intangibles - Trade name 300 Goodwill 14,720 Other current liabilities (701) Deferred liability (535) Specified investments liability (2,954) Total net assets acquired $ 27,815
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The Company incurred acquisition‑related costs of $ 381 and $ 438 for the three and nine months ended May 31, 2026, respectively, consisting primarily of legal, advisory, and due diligence fees. These costs are included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss. The acquisition also resulted in the recognition of a noncontrolling interest of $ 556 as of the Acquisition Date.
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Since the Acquisition Date, Pier Two contributed revenue of $ 3,557 and net loss of $ 1,169, which are included in the Company's condensed consolidated statements of operations and comprehensive loss for the three and nine months ended May 31, 2026.
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The following unaudited pro forma information presents the combined results of operations as if the acquisition had occurred at the beginning of comparable prior annual period, after giving effect to certain adjustments. The pro forma results are not necessarily indicative of what would have occurred had the acquisition been completed on that date, nor are they indicative of future results.
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On March 11, 2026, the Company entered into an Investment Commitment Letter pursuant to which it committed to purchase additional shares of Eightco common stock for an aggregate purchase price of not less than $ 75,000 through Eightco’s at-the-market equity program. On March 12, 2026, the Company acquired 86,956,513 additional shares of Eightco common stock in open-market transactions at a volume-weighted average price of $ 0.92 per share, for aggregate consideration of $ 80,000, which settled on March 13, 2026. In connection with the additional investment, Thomas Lee, the Company’s Executive Chairman, was appointed to Eightco’s Board of Directors effective March 10, 2026.
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Because the Company’s ownership interest exceeds the 20% presumption threshold and the Company is represented on Eightco’s Board of Directors, the Company concluded that it has the ability to exercise significant influence over Eightco. Accordingly, the investment in Eightco qualifies for the equity method of accounting under ASC 323. As a result, Eightco is considered a related party of the Company. Other than the Company’s investment in Eightco and its recognition of equity method earnings or losses, the Company had no related-party transactions with Eightco during the period.
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The following table presents other lease details for the nine months ended May 31, 2026 and 2025:
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In the event of liquidation, the Series A Preferred Stock ranks senior to both the Series B Preferred Stock and common stock, while the Series B Preferred Stock ranks senior to the common stock. Both Series A and Series B Preferred Stock are convertible into common stock at the option of the holder.
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Non-controlling interests represent Ethereum Tower LLC's 2.0% ownership in MAVAN Holdings. The ownership interest was granted in connection with the Management Services Agreement entered into as part of the Pier Two acquisition. The non-controlling interest is presented as a separate component of stockholders' equity in the accompanying condensed consolidated balance sheets.
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Net income attributable to the non-controlling interest is allocated based on the ownership percentage and is reflected separately in the condensed consolidated statements of operations and comprehensive loss.
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The Company’s RSUs include awards with service, performance, and market conditions. Some of the RSUs were fully vested upon issuance while other service based RSUs have a vesting period of one year. Some of the RSUs issued to one executive have performance conditions linked to the percentage of ETH holdings or market conditions related to market cap or target stock price.
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Options Weighted Average Exercise Price Average Remaining Contract Term Aggregate Intrinsic Value
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As of May 31, 2026, unrecognized compensation expenses for time-based RSUs is $ 25,185, which is expected to be amortized over an average of 1.58 years; unrecognized compensation expenses for performance-based RSUs is $ 103,776, which is expected to be amortized over an average of 4.05 years; unrecognized compensation expenses for stock options is $ 4,857, which is expected to be amortized over an average of 0.81 years.
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The following table presents the changes in goodwill during the nine months ended May 31, 2026.
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Total Net balance at September 1, 2025 $ — Acquisition during the period 14,720 Foreign currency exchange rate effect 286 Net balance at May 31, 2026 $ 15,006
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No impairment of goodwill was recorded during the nine months ended May 31, 2026 and 2025.
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The estimated future amortization expense for each of the next five years for all identifiable intangible assets is as follows:
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In connection with the acquisition of Pier Two, the Company entered into a Management Services Agreement with Eth Tower pursuant to which Eth Tower provides management and operational services to MAVAN Holdings. The agreement has an initial term of ten years and provides for compensation consisting of a 2.0 % membership interest in MAVAN Holdings and revenue-based fees related to certain staking activities. The agreement may be terminated under specified circumstances. If terminated by the Company prior to the expiration of the term, Eth Tower may be entitled to continue receiving certain revenue participation payments or elect a lump-sum termination payment. No expense was recognized under the agreement during the three and nine months ended May 31, 2026, and no amounts were accrued or payable as of May 31, 2026.
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On June 4, 2026, the Company entered into an underwriting agreement with Moelis & Company, LLC and Cantor Fitzgerald & Co. in connection with an underwritten offering of 3,500,000 shares of the Company’s 9.50 % Series A Perpetual Preferred Stock (the "Series A Preferred Stock"), par value $ 0.0001 per share, at a public offering price of $ 80.00 per share. Net proceeds from the offering were $ 273.8 million after deducting underwriting discounts and offering expenses. The Series A Preferred Stock is listed on the New York Stock Exchange under the symbol “BMNP".
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The Company declared cash dividends on Series A Preferred Stock of $ 0.32 per share and $ 0.11 per share on June 12, 2026 and June 30, 2026, respectively. The dividends were paid on June 22, 2026 and July 10, 2026, respectively.
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Subsequent to May 31, 2026, we completed an underwritten public offering of our Series A Preferred Stock, generating net proceeds of $273.8 million. The offering further enhanced our liquidity and capital resources, and supports our digital asset treasury strategy, strategic investments and other general corporate purposes.
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• Revenue from self-mining. During the three months ended May 31, 2026, revenue from self-mining was $624, compared to $813 in the three months ended May 31, 2025. The Company is maintaining its small BTC mining operations. However, mining revenue declined due to the lower value of BTC for the three months ended May 31, 2026 compared to the prior year period.
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• Revenue from consulting. During the three months ended May 31, 2026, revenue from consulting was $168, as compared to $35 during the three months ended May 31, 2025. The increase in consulting revenue in 2026 was derived from one consulting agreement under which the Company is obligated to provide various operational, maintenance and consulting services, which saw more activity in 2026 as compared to the prior period.
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• Revenue from leasing. During the three months ended May 31, 2026, revenue from the leasing of miners was $0, as compared to $1,075 during the three months ended May 31, 2025. The machine lease agreements expired on December 31, 2025 and were not renewed. Thus, the revenue associated with this activity is no longer recognized.
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In addition, cost of sales as a percentage of revenue increased during the three months ended May 31, 2026 period primarily due to the acquisition of Pier Two and the resulting impact on the Company's staking and validation operations, affecting comparability to prior periods.
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• General and administrative expenses. General and administrative expenses were $37,270 in the three months ended May 31, 2026, compared to $744 in the three months ended May 31, 2025. The increase is primarily related to ETH custodian fees related to treasury operations and treasury management associated
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with the strategy to shift to staking revenue being the primary source of revenue. Further, this increase in general and administrative expenses was due to the increase in employee salaries and the increase in board of director monetary and stock-based compensation.
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• Revenue from self-mining. During the nine months ended May 31, 2026, revenue from self-mining was $845, compared to $2,814 in the nine months ended May 31, 2025. The Company is maintaining its small BTC mining operations. However, mining revenue declined partially due to the suspension of self-mining operations during relocation in the nine months ended May 31, 2026.
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• Revenue from leasing. During the nine months ended May 31, 2026, revenue from the leasing of miners was $1,536, as compared to $1,075 during the nine months ended May 31, 2025. This was due to more activity within its leasing contracts with KULR Technology Group, Inc. for the nine month period ended May 31, 2026.
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• General and administrative expenses. General and administrative expenses were $335,662 in the nine months ended May 31, 2026, compared to $2,667 in the nine months ended May 31, 2025. The increase is primarily related to treasury activity associated with the Company's ETH strategy. Due to the large purchases of ETH throughout the year, the Company incurred significantly more of these treasury expenses. Further, this increase in general and administrative expenses was due to the increase in employee salaries and the increase in board of director monetary and stock-based compensation.
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• Net loss on derivative contracts. During the nine months ended May 31, 2026, the Company recognized a net loss on derivative contracts of ($133,275), primarily attributable to losses on exercised option contracts of $79,278 and the net impact of option contracts that expired during the period of $54,512, partially offset by a $515 gain related to changes in the fair value of open option contracts. The Company had no derivative activity during the nine months ended May 31, 2025.
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• Issuance costs related to warrant offering. The Company incurred an issuance cost of ($9,381) during the nine months ended May 31, 2026. These costs were incurred in connection with the warrant offering completed during the period and did not exist in the prior year.
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During the nine months ended May 31, 2026, the Company recognized an income tax benefit of $92,295, primarily attributable to the reversal of the deferred tax liabilities associated with unrealized gains on digital assets recognized in prior periods that are now in a significant unrealized loss position. These unrealized losses resulted in the recognition of deferred tax assets, against which the Company recorded a 100% valuation allowance.
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(2) Represents a loss recorded during the period on the sale of property, plant and equipment that was the difference between the book carrying value and the sale price.
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(4) Represents the issuance cost incurred for the warrant offering for the nine months ended May 31, 2026 disclosed within "Note 8. Stockholders' Equity."
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(2) Represents a loss recorded during the period on the sale of property, plant and equipment that was the difference between the book carrying value and the sale price.
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(4) Represents the issuance cost incurred for the warrant offering for the nine months ended May 31, 2026 disclosed within "Note 8. Stockholders' Equity."
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The Company's primary sources of liquidity during the nine-months ended May 31, 2026, were proceeds from equity financing transactions, including the September 2025 issuance of common stock and warrants, and proceeds generated through its ATM equity program. During the period, the Company generated gross proceeds of $12,235,110 from equity financing transactions, consisting of (i) $11,869,870 in gross proceeds from the sale of 340,748,312 shares of common stock pursuant to the ATM Offering and (ii) $365,240 in gross proceeds from the September 2025 issuance of common stock and warrants.
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Subsequent to May 31, 2026, the Company completed an underwritten public offering of 3,500,000 shares of its Series A Preferred Stock at a public offering price of $80.00 per share, generating net proceeds of $273.8 million after deducting underwriting discounts and offering expenses. The Series A Preferred Stock is listed on the New York Stock Exchange under the symbol "BMNP."
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The Company intends to use available liquidity to support its digital asset treasury strategy, strategic investments, working capital requirements and general corporate purposes. Management continues to evaluate capital allocation opportunities, including direct digital asset acquisitions and investments in blockchain-related businesses and technologies that complement the Company's Ethereum-focused strategy.
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• ongoing revenue participation payments under the Management Services Agreement with Eth Tower, which are based on the level of staking activity and related revenues generated by MAVAN Holdings;
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• modest capital expenditures of approximately $1,500, primarily related to the for maintenance of existing technology platforms and infrastructure supporting the Company's operations;
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• working capital requirements for general operations, approximately $1,000 per month at current run-rate activity levels; and
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• public company costs, including audit and compliance, of approximately $4,000 annually.
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• dividend obligations associated with the Company's outstanding Series A Preferred Stock of approximately $33,250 annually.
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Business Combinations. Business combinations are recorded using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and identifiable intangible assets acquired based on their estimated fair values as of the acquisition date, with any excess recorded as goodwill.
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The determination of the fair value of assets acquired and liabilities assumed requires management to make significant estimates and assumptions. The most significant judgments relate to the identification and valuation of acquired intangible assets, including estimates of future cash flows, discount rates, customer attrition rates, technology obsolescence, and the determination of useful lives used to calculate amortization expense. Changes in these assumptions could materially affect the amounts assigned to identifiable intangible assets and goodwill, as well as future amortization and impairment expense. For significant acquisitions, the Company engages third-party valuation specialists to assist management in determining the fair value of acquired intangible assets and certain acquired assets and liabilities.
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Goodwill and Intangible Assets Impairment. The Company records goodwill and identifiable intangible assets in connection with business combinations. As of May 31, 2026, the Company recorded goodwill of $15.0 million and intangible assets, net, of $11.1 million, primarily related to the Pier Two acquisition. Goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate that impairment may exist, at the reporting unit level. Based on management’s assessment under ASC 280 and ASC 350, the Company has identified one reporting unit for purposes of goodwill impairment testing. Definite-lived intangible assets are amortized over
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their estimated useful lives and reviewed for impairment when indicators of impairment are present. These assessments require significant judgment, including estimates of future cash flows, discount rates, revenue growth, useful lives, and market participant assumptions. Management did not identify any impairment of goodwill or definite-lived intangible assets during the three and nine months ended May 31, 2026.
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Staking and validation services revenue recognition. The Company recognizes revenue from blockchain validation and staking services in accordance with ASC 606. Revenue is earned in the form of digital assets received for validating blockchain transactions and providing staking services. The Company recognizes revenue when its performance obligation is satisfied through the successful validation of blocks or transactions on the applicable blockchain network.
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Significant judgment is required in evaluating the application of ASC 606 to blockchain validation arrangements, including the identification of the customer and contract by analogy, determining when performance obligations are satisfied, and assessing whether the Company acts as principal or agent in generating staking rewards. The Company recognizes revenue on a gross basis when it controls the validation services provided to the blockchain network and is primarily responsible for fulfilling the related performance obligation. Changes in these judgments could materially affect the amount and timing of revenue recognized.
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Certain quantitative and qualitative market risk disclosures are described in our Annual Report on Form 10-K for the year ended August 31, 2025. Through May 31, 2026, there have been no material changes in the quantitative and qualitative market risk disclosures described in such Annual Report.
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The following risk factors supplement the Company’s existing Item 1A disclosures included in the Company’s previous filings with the SEC. These supplemental risk factors should be read in conjunction with the other information contained in this Report and the Company’s other filings with the SEC, including, but not limited to, the Company’s Rule 424(b)(5) prospectus supplement dated June 5, 2026 filed with the Securities and Exchange Commission.
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Staking yield volatility may materially and adversely affect our ability to pay dividends on the Series A Preferred Stock.
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A significant portion of our revenue is derived from staking rewards earned on our Ethereum holdings. Staking rewards are not fixed and are subject to substantial fluctuation based on a variety of factors, many of which are beyond our control. These factors include changes in the total amount of Ethereum staked across the network, modifications to the Ethereum protocol’s reward mechanisms through network upgrades or governance decisions, fluctuations in network transaction volume and associated priority fees, changes in the rate of new validator participation, and broader macroeconomic and cryptocurrency market conditions. As the total amount of Ethereum staked on the network increases, the per-validator reward rate generally decreases, which could result in a material reduction in the yield we earn on our staked assets over time.
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Because we rely on staking income as a primary source of cash generation, any sustained decline or period of heightened volatility in staking yields could materially impair our ability to meet our operating expenses, service any outstanding indebtedness, and maintain dividend payments on our Series A Preferred Stock at current or anticipated levels. Our board of directors retains discretion over the declaration and payment of dividends, and there can be no assurance that dividends will be declared or paid in any particular amount or at all. A reduction or suspension of
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dividends resulting from diminished staking yields could adversely affect the market price of our securities, including the Series A Preferred Stock, and may make our securities less attractive to income-oriented investors.
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In addition, the yield earned through Ethereum staking is denominated in ETH, the value of which is itself subject to significant price volatility. Even if staking yields remain stable in terms of the quantity of ETH earned, the fiat-currency equivalent of those rewards may fluctuate materially due to changes in the market price of ETH. A decline in the price of ETH concurrent with a decline in staking yield rates would compound the adverse impact on our cash flow and our ability to fund dividend payments on the Series A Preferred Stock. Conversely, even if ETH prices appreciate, a sufficient decline in staking yield rates could still result in reduced revenue in absolute terms if the rate of yield compression outpaces any price appreciation.
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Furthermore, the Ethereum network and its proof-of-stake consensus mechanism remain subject to ongoing development and potential protocol changes. Future upgrades to the Ethereum network, including changes to issuance schedules, reward distribution mechanisms, or the introduction of new staking paradigms, could alter the economics of staking in ways that are difficult to predict. Regulatory developments in the United States and abroad may also affect our ability to stake Ethereum or the economic terms on which staking is conducted, including the potential classification of staking activities or staking rewards as securities transactions, which could subject us to additional compliance obligations or restrict our staking operations. Any such changes could further reduce the yields available to us, which may have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock. There can be no assurance that staking yields will remain at levels sufficient to support our current business model or dividend policy, and investors should not place undue reliance on historical staking yields as indicative of future performance.
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Ongoing issuance of new ETH may adversely affect the price of ETH and our ability to cover dividend payments on the Series A Preferred Stock.
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The rate at which new ETH are issued and put into circulation is expected to vary. Unlike bitcoin, which has a hard-coded maximum supply of 21 million coins, the Ethereum network has no formal cap on the total supply of ETH. New ETH is issued to validators as staking rewards on a continuing basis, and continued net issuance of ETH may introduce sustained downward pressure on the price of ETH, particularly if a meaningful portion of newly minted ETH is sold by validators. Sustained pressure on the price of ETH may have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock.
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Our ETH holdings are less liquid than cash and cash equivalents and may not be able to serve as a source of liquidity to fund dividends on the Series A Preferred Stock.
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Historically, the ETH market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. Staked ETH may not be immediately available for withdrawal or sale. As part of the “activating” and “exiting” processes of staking, staked ETH will be inaccessible for a variable period of time determined by a range of factors, including network congestion. These delays may be unpredictable and could occur during periods of market stress or declining ETH prices, limiting our ability to use staked ETH as a source of liquidity to fund dividends on the Series A Preferred Stock.
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Further, during times of market instability, we may not be able to sell our ETH at favorable prices or at all. For example, a number of ETH trading venues temporarily halted deposits and withdrawals in 2022, although the Coinbase exchange (our principal market for ETH) has, to date, not done so. As a result, our ETH holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
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Further, ETH we hold with our custodians do not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered ETH or otherwise generate funds using our ETH holdings, including during times of market instability or when the price of ETH has declined significantly. If we are unable to sell our ETH, enter into additional capital raising transactions, including capital raising transactions using ETH as collateral, or otherwise generate funds using our ETH holdings, or if we are forced to sell our ETH at a significant
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loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted and our ability to fund dividend payments on the Series A Preferred Stock could be materially impaired.
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Regulatory treatment of digital assets could cause us to be deemed an “investment company,” which could materially harm the trading price of the Series A Preferred Stock.
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There is a risk that changing regulatory treatment of ETH, other digital assets we hold, or activities in which we are engaged could cause us to be deemed to be an “investment company” within the meaning of the Investment Company Act of 1940, as amended, which would impose substantial regulatory burdens, restrict our ability to operate our business as currently conducted, and could require us to liquidate or restructure our holdings. If we were deemed to be an investment company, we could be required to register as such under the Investment Company Act, which would subject us to significant regulatory requirements and restrictions, including limitations on leverage, affiliate transactions, and our ability to pursue our current digital asset treasury strategy. The costs and administrative burden of compliance with the Investment Company Act could be substantial and could materially affect our profitability and operations. Adverse regulatory developments concerning the classification of digital assets and related activities under the Investment Company Act or other federal securities laws could materially harm our business and the trading prices of our securities, including the Series A Preferred Stock.
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Our option strategies and strategic investments expose us to additional volatility and counterparty risks that could impair our ability to cover dividend payments on the Series A Preferred Stock.
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We generate ETH option premium income from option strategies on our ETH holdings. These strategies expose us to mark-to-market volatility, counterparty risk, and the risk that ETH could be called away at unfavorable prices. We also hold strategic “moonshot” investments, including a stake in Beast Industries Co. valued at $186 million (recorded as an equity investment measured at cost) and a stake in Eightco Holdings Inc. valued at $93 million as of May 31, 2026 (recorded as an equity method investment measured at fair value), which are subject to substantial volatility, illiquidity, and concentration risks. If any of the foregoing risks were to materialize, it could reduce the yield generated from our ETH holdings and/or our future revenues, which could have a material adverse effect on our ability to cover dividend payments on the Series A Preferred Stock.
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We may be unable to access capital markets on acceptable terms, which could increase the cost of issuing parity or junior preferred stock and adversely affect our ability to maintain dividends on the Series A Preferred Stock.
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Our digital asset acquisition strategy depends on our continued ability to access capital markets, including through issuances of equity, preferred, and debt securities. Adverse capital markets conditions, regulatory developments, declines in the price of ETH or our common stock, or perceptions about our creditworthiness could limit our ability to raise capital and could increase our cost of capital, including our cost of issuing additional parity stock or junior stock. If we are unable to access the capital markets on acceptable terms, we may be unable to fund our digital asset treasury strategy, meet our operating obligations, or maintain dividend payments on the Series A Preferred Stock, any of which could have a material adverse effect on our business, financial condition, results of operations, and the trading price of our securities.
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Our staking and validator operations conducted through MAVAN are subject to significant risks, including slashing, lock-up periods, smart contract vulnerabilities, liquidity constraints, counterparty exposure, and operational failures, any of which could result in a partial or total loss of staked ETH or a material reduction in staking revenue.
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We generate substantially all of our revenue from native ETH staking conducted through MAVAN. Staking requires continuous operational reliability, adherence to Ethereum protocol rules, and the maintenance of high-availability validator infrastructure. Validators that act maliciously, produce conflicting attestations, or suffer extended downtime may be “slashed” by the Ethereum network, resulting in an irrecoverable partial loss of staked principal. As of May 31, 2026, the Company held 5,416,945 ETH with a fair value of $10.9 billion, a substantial portion of which is staked through MAVAN, and any slashing event could result in a material loss of digital assets. In addition, staking involves unbonding or lock-up periods during which staked ETH cannot be withdrawn or sold; these periods may be unpredictable and may coincide with periods of market stress, reducing our ability to respond to adverse price movements or meet liquidity needs. Our staking operations also involve exposure to smart contract risk - the
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underlying protocols, liquid staking mechanisms, and restaking integrations on which MAVAN relies are governed by code that may contain undiscovered vulnerabilities exploitable by malicious actors. Where staking is conducted through or in conjunction with third-party custodians, infrastructure providers, or staking protocols, we face counterparty and operational risk that could result in delayed access to staked assets, loss of staking rewards, or in extreme cases, loss of principal. Any of the foregoing risks, if realized, could have a material adverse effect on our financial condition and results of operations.
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Our recent strategic transactions, including the acquisition of Pier Two and the launch of MAVAN, may not be successfully integrated or generate the anticipated benefits, and our projected staking revenue figures are based on assumptions that may prove incorrect.
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We completed the acquisition of Pier Two Holdings Pty Ltd in March 2026 for total preliminary consideration of $27.8 million and launched MAVAN later that month. The integration of Pier Two’s non-custodial staking infrastructure and personnel into MAVAN involves substantial execution risks, including risks related to the integration of technology systems and operational workflows, retention of key technical employees, regulatory compliance across multiple jurisdictions (including Australian and U.S. regulatory regimes), validator performance optimization, and our ability to attract and retain institutional staking customers. If we are unable to successfully integrate Pier Two’s operations or retain key personnel, we may not realize the anticipated benefits of the acquisition, which could impair the carrying value of the goodwill and intangible assets recognized in connection with the transaction. Furthermore, the annualized staking revenue figures and yield assumptions we have disclosed in connection with MAVAN’s operations are based on assumptions regarding staking yield rates, the proportion of our ETH holdings that are staked at any given time, validator uptime, and Ethereum network conditions - all of which are subject to change. Actual results may differ materially from these assumptions, and there can be no assurance that MAVAN will achieve the revenue levels or operational performance we anticipate.
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Our revenue is highly concentrated in ETH staking and validation operations conducted through MAVAN, and any disruption to those operations, decline in staking yields, or adverse protocol change would have a disproportionate impact on our results of operations and financial condition.
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For the three months ended May 31, 2026, revenue from staking and validation was $45.7 million, representing 98% of total revenue of $46.5 million for the quarter. For the nine months ended May 31, 2026, revenue from staking and validation was $56.9 million, representing 95% of total revenue of $59.9 million for the nine-month period. This extraordinary concentration of revenue in a single operating activity - Ethereum staking conducted principally through MAVAN - means that any disruption to MAVAN’s validator performance, any decline in Ethereum staking yield rates, or any adverse change to the Ethereum protocol’s reward mechanisms could result in a disproportionate and material decline in our total revenue, operating income, and cash flow from operations. Unlike a diversified revenue base, our reliance on a single yield-generation mechanism affords limited ability to offset declines in staking economics with revenue from other sources. In addition, because staking revenue is denominated in ETH, fluctuations in the market price of ETH directly affect the U.S. dollar-equivalent revenue recognized by the Company, compounding the impact of any reduction in yield rates. There can be no assurance that our revenue concentration in staking will decrease over time, and investors should consider that our results of operations are substantially dependent on the continued performance of MAVAN and favorable Ethereum staking economics.
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Regulatory uncertainty regarding the classification and treatment of staking activities and staking rewards in the United States and abroad may subject us to additional compliance obligations, restrict our staking operations, or require changes to MAVAN’s business model as it expands to serve institutional clients.
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The regulatory treatment of staking activities and staking rewards under U.S. federal and state securities laws, banking regulations, money transmission laws, and tax laws remains uncertain and continues to evolve. Regulators, including the Securities and Exchange Commission, the Commodity Futures Trading Commission, and various state regulators, have not provided definitive guidance on whether staking activities or staking rewards constitute securities transactions, commodity transactions, or money services business activities. If staking activities or staking rewards are classified as securities or are otherwise subject to registration, licensing, or reporting obligations, we could be required to register as a broker-dealer, investment adviser, money services business, or similar regulated entity, to modify MAVAN’s operations, or to curtail or cease certain staking activities. These risks are amplified as MAVAN expands beyond supporting our own ETH treasury to offering staking services to institutional investors, custodians, and ecosystem partners - an expansion that may subject the Company to additional or different regulatory regimes applicable to staking service providers, including fiduciary, custody, and consumer protection
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requirements not previously applicable to our operations. Regulatory developments in foreign jurisdictions, including Australia (where Pier Two is domiciled and operates), may similarly affect our ability to conduct staking operations or the economic terms on which staking is offered. Any adverse regulatory development could materially impair our staking revenue or require us to restructure MAVAN’s operations at significant cost.
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We rely on third-party infrastructure providers and key personnel, including Ethereum Tower LLC under a long-term Management Services Agreement, to operate MAVAN’s validator nodes, and any failure of performance, termination of arrangements, or loss of key personnel could materially disrupt our staking operations.
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MAVAN’s validator operations depend on the continued performance of third-party infrastructure providers and key personnel. Pursuant to a ten-year Management Services Agreement dated March 24, 2026, Ethereum Tower LLC provides management and operating services to MAVAN Holdings LLC in exchange for an irrevocable 2.00% membership interest in MAVAN Holdings LLC and a monthly fee calculated as a percentage of the Company’s native staking rewards attributable to ETH staked through MAVAN Holdings LLC. If Ethereum Tower LLC fails to perform its obligations, experiences operational failures, or is unable to retain qualified personnel, our validator operations could be disrupted, resulting in reduced staking rewards, increased risk of slashing events, or reputational harm. In addition, much of MAVAN’s technical expertise was obtained through the Pier Two acquisition, and there can be no assurance that we will be able to retain key technical and operational personnel acquired in that transaction, particularly given the competitive market for blockchain infrastructure talent. MAVAN also relies on third-party cloud computing, co-location, and network infrastructure providers for the hosting and connectivity of its validator nodes; any failure, security breach, or service interruption by such providers could result in extended validator downtime, slashing, or loss of staking rewards. We do not control the operations of these third parties and may have limited contractual remedies if they fail to perform.
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MAVAN’s planned expansion from an internally-focused staking platform to a commercial staking-services provider serving third-party institutional investors, custodians, and ecosystem partners introduces new customer acquisition, competitive, service-level, and reputational risks not previously applicable to the Company’s business.
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MAVAN was originally developed to support the Company’s own Ethereum treasury operations and has operated principally as an internal staking platform since its launch in March 2026. The Company has publicly disclosed its intention to expand MAVAN to serve institutional investors, custodians, and other ecosystem partners seeking institutional-grade staking infrastructure. This expansion introduces risks that were not previously applicable to the Company’s business, including the need to develop and maintain commercial-grade service-level agreements, manage customer onboarding and support, compete with established institutional staking service providers (including Coinbase Cloud, Figment, Kiln, and others), and protect the Company’s reputation in a market where validator downtime or slashing events affecting client assets could result in significant liability, loss of customer confidence, and competitive harm. The Company has limited operating history as a commercial staking-services provider, and there can be no assurance that MAVAN will successfully attract or retain institutional staking clients on terms favorable to the Company, or at all. Failure to successfully execute this expansion could limit the Company’s revenue diversification, impair the return on investment from the Pier Two acquisition, and adversely affect our competitive position in the rapidly evolving blockchain infrastructure services market.
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On March 24, 2026, in connection with the closing of the acquisition of Pier Two Holdings Pty Ltd (“Pier Two”), the Company issued 501,545 shares of its common stock, par value $0.0001 per share, to the sellers of Pier Two as partial consideration for the acquisition. The shares were issued at a price of $20.93 per share, for aggregate stock consideration of $10,500. The shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder, based on the limited number of offerees and their status as sophisticated investors. The issuance was previously reported on the Company’s Current Report on Form 8-K filed with the SEC on March 30, 2026.
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Item 1A of the 10-Q filed Jul 14, 2026 against Item 1A of the 10-K filed Nov 21, 2025.
A 10-Q repeats only the risks that changed, so a 10-K paragraph that is missing from it is not counted as removed.
Added is a paragraph with nothing like it in the 10-K, Reworded a sentence that is in both with several words changed,
Quiet changes a sentence in both where one to four words changed and one is a hedge or a modal
(cut words struck through, new words highlighted and underlined).
Text on the page, not a score; each links to the filing at sec.gov.
The first 12 of 34 are shown (at most 12 of each type).
