155 paragraphs in Risk Factors of the 10-K filed Mar 31, 2026
with nothing like them in the 10-K filed Mar 25, 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.
Solana is a highly volatile asset that has traded below $100 per Solana and above $240 per Solana on the Coinbase exchange (a major U.S.-based crypto exchange) in the 12 months preceding the date of this Annual Report on Form 10-K. The trading price of Solana significantly decreased during prior periods, and such declines may occur again in the future.
Similar paragraph at 3 of 31 other Crypto companies:
DJT,
MSTR,
NAKASolana does not pay interest or other returns and we can only generate cash from our Solana holdings if we sell our Solana or implement strategies to create income streams or otherwise generate cash by using our Solana holdings. Even if we pursue any such strategies, we may be unable to create income streams or otherwise generate cash from our Solana holdings, and any such strategies may subject us to additional risks.
Our Solana holdings may significantly impact our financial results and the market price of our Class A common stock.
Our Solana holdings may significantly affect our financial results and if we increase our overall holdings of Solana in the future, may have an even greater impact on our financial results and the market price of our Class A common stock.
The vast majority of our assets are concentrated in our Solana holdings. The concentration of our assets in Solana may limit our ability to mitigate risk that could otherwise be achieved by holding a more diversified portfolio of treasury assets.
We intend to purchase Solana using primarily proceeds from equity and debt financing.
Similar paragraph at 1 of 31 other Crypto companies:
SBETOur ability to achieve the objectives of our treasury strategy depends in significant part on our ability to obtain equity and debt financing. If we are unable to obtain equity or debt financing on favorable terms or at all, we may not be able to successfully execute on our treasury strategy.
Our treasury strategy has not been tested over an extended period of time or under different market conditions.
Similar paragraph at 2 of 31 other Crypto companies:
ASST,
SUIGWe implemented our Solana treasury strategy following the closing of our private placement in September 2025. We intend to continually examine the risks and rewards of our strategy to acquire and hold Solana. This strategy has not been tested over an extended period of time or under different market conditions. If Solana prices were to decrease or our Solana strategy otherwise proves unsuccessful, our financial condition, results of operations, and the market price of our common stock would be materially adversely impacted.
We are subject to counterparty risks, including risks relating to exchanges where we may purchase Solana and our custodians where we hold our Solana.
Similar paragraph at 1 of 31 other Crypto companies:
RIOTAlthough we have implemented various measures that are designed to mitigate our counterparty risks, including purchasing Solana through reputable U.S.-based third-party and other well-known exchanges with industry standard policies and procedures and by storing substantially all of the Solana we own in custody accounts at U.S.-based, institutional-grade custodians and we having negotiated contractual arrangements intended to establish that our property interest in custodially-held Solana is not subject to claims of our custodians’ creditors, applicable insolvency law is not
Similar paragraph at 2 of 31 other Crypto companies:
DJT,
MSTRfully developed with respect to the holding of digital assets in custodial accounts. If our custodially-held Solana were nevertheless considered to be the property of our custodians’ estates in the event that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated as a general unsecured creditor of such custodians, inhibiting our ability to exercise ownership rights with respect to such Solana, or delaying or hindering our access to our Solana holdings, and this may ultimately result in the loss of the value related to some or all of such Solana, which could have a material adverse effect on our financial condition as well as the market price of our listed securities.
SOL faces unique technical, governance and concentration risks that could materially affect its long-term viability.
SOL is a high-throughput Layer 1 blockchain with architectural features that differ significantly from other blockchains, such as Ethereum. While these features allow for rapid processing of transactions, they introduce risks that could adversely impact the value of SOL and the stability of the SOL network. Historically, SOL has suffered network outages, slow operations and validator coordination failures. If such challenges were to persist, the confidence of the SOL development community and its users will be adversely affected, which could cause a rapid decline in the value of SOL.
SOL validators are relatively small in number, which may lead to coordinated censorship.
Similar paragraph at 3 of 31 other Crypto companies:
DFDV,
FWDI,
UPXISOL requires high-performing computing hardware and internet connectivity to operate a validator node. These substantial infrastructure demands create a barrier of entry for validators, leading to a high concentration of validators that must be well capitalized. A significant portion of staked SOL tokens may be delegated to a few validators, resulting in a centralized block production environment.
Similar paragraph at 2 of 31 other Crypto companies:
DFDV,
UPXIOur Solana validator reward yield is expected to decline over time and could have a material adverse effect on our financial results.
Solana’s current protocol distributes rewards to validators based on a declining inflation model. This model reduces the total amount of Solana rewards available to distribute to validators by 15% each year until it reaches a long-term rate of 1.5%. A significant reduction in validator reward yield could negatively impact our business and results of operations.
Similar paragraph at 2 of 31 other Crypto companies:
DFDV,
UPXIThis is the first digital asset treasury strategy for the Company and our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our treasury strategy and Solana holdings.
We have recently implemented our digital asset treasury strategy. Because we are only beginning to enact our treasury strategy, our historical financial statements do not reflect the potential variability in earnings that we may experience in the future from holding or selling significant amounts of Solana. The price of Solana has historically been subject to dramatic price fluctuations and is highly volatile.
Additionally, in the future we may expand our operations beyond the legacy PoNS system and the Solana treasury strategy to include other income streams and otherwise generate funds using our Solana holdings. At this time, we do not have any definitive agreements or plans in place to expand beyond acquiring and holding Solana. However, if we do expand such operations, additional risks related to such strategies and business, including counterparty risks, could arise.
Similar paragraph at 1 of 31 other Crypto companies:
NAKAOur Solana treasury strategy exposes us to risk of non-performance by counterparties.
Our Solana treasury strategy exposes us to the risk of non-performance by counterparties, whether contractual or otherwise. Risk of non-performance includes inability or refusal of a counterparty to perform because of a deterioration in the counterparty’s financial condition and liquidity or for any other reason. For example, our execution partners, custodians, or other counterparties might fail to perform in accordance with the terms of our agreements with them, which could result in a loss of Solana, a loss of the opportunity to generate funds, or other losses.
Our primary counterparty risk with respect to our Solana is custodian performance obligations under the custody arrangements we have entered into. A series of relatively recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry, including the
Similar paragraph at 3 of 31 other Crypto companies:
ASST,
FWDI,
MSTRfilings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, FTX Trading and Genesis Global Capital, among others, and the filing and subsequent settlement of a civil fraud lawsuit by the New York Attorney General against Genesis Global Capital, its parent company Digital Currency Group, Inc., and former partner Gemini Trust Company have highlighted the perceived and actual counterparty risk applicable to digital asset ownership and trading. Although these bankruptcies, closures and liquidations have not resulted in any loss or misappropriation of our Solana, nor have such events adversely impacted our access to our Solana, legal precedent created in these bankruptcy and other proceedings may increase the risk of future rulings adverse to our interests in the event one or more of our custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency or similar proceedings.
While our custodians are subject to regulatory regimes intended to protect customers in the event of a custodial bankruptcy, receivership or similar insolvency proceeding, no assurance can be provided that our custodially-held Solana will not become part of the custodian’s insolvency estate if one or more of our custodians enters bankruptcy, receivership or similar insolvency proceedings. Additionally, if we pursue any strategies to create income streams or otherwise generate funds using our Solana holdings, we would become subject to additional counterparty risks. Any significant non-performance by counterparties, including in particular the custodians with which we custody substantially all of our Solana, could have a material adverse effect on our business, prospects, financial condition, and operating results.
Read in the 10-K ↗
As Solana and other digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of Solana. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of Solana or the ability of individuals or institutions such as us to own or transfer Solana.
If Solana is determined to constitute a security for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price of Solana and in turn adversely affect the market price of our Class A common stock. Moreover, the risks of us engaging in a Solana treasury strategy have created, and could continue to create complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.
Several spot Solana exchange-traded products (“ETPs”) have received tacit approval from the SEC to list their shares on a U.S. national securities exchange with continuous share creation and redemption at net asset value. Even though we are not, and do not function in the manner of, a spot Solana ETP, it is possible that we nevertheless could face regulatory scrutiny from the SEC or other federal or state agencies due to our Solana holdings.
Similar paragraph at 4 of 31 other Crypto companies:
ASST,
DJT,
MSTR,
XXIIn addition, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict in the Middle East. While we have implemented or intend to implement and maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and take care to only acquire our Solana through entities subject to anti-money laundering regulation and related compliance rules in the United States, if we are found to have purchased any of our Solana from bad actors that have used Solana to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in Solana by us may be restricted or prohibited.
Although our Solana holdings do not currently serve as collateral securing any of our outstanding indebtedness as of the date hereof, we may incur indebtedness or enter into other financial instruments in the future that may be collateralized by our Solana holdings. We may also consider pursuing strategies to create income streams or otherwise generate funds using our Solana holdings. These types of Solana-related transactions are the subject of enhanced regulatory oversight. These
and any other Solana-related transactions we may enter into, beyond simply acquiring and holding Solana, may subject us to additional regulatory compliance requirements and scrutiny, including under Federal and state money services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.
Additional laws, guidance and policies may be issued by domestic and foreign regulators following the filing for Chapter 11 bankruptcy protection by FTX, one of the world’s largest cryptocurrency exchanges, in November 2022. While the financial and regulatory fallout from FTX’s collapse did not directly impact our business, financial condition or corporate assets, the FTX collapse may have increased regulatory focus on the digital assets industry.
Similar paragraph at 1 of 31 other Crypto companies:
TRONIn addition, private actors that are wary of Solana or the regulatory concerns associated with Solana have in the past taken and may in the future take further actions that may have an adverse effect on our business or the market price of our listed securities.
Regulatory change reclassifying Solana as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940, as amended, and could adversely affect the market price of Solana and the market price of our Class A common stock.
Under Sections 3(a)(1)(A) and (C) of the Investment Company Act of 1940, as amended (the “1940 Act”), a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment company,” as such term is defined in the 1940 Act, and are not registered as an “investment company” under the 1940 Act as of the date of this Form 10-K.
A significant portion of our assets is concentrated in our Solana holdings. In March 2026, the SEC and CFTC issued the Release indicating that certain digital assets, including SOL, may be characterized as “digital commodities” and that certain related activities, including staking and secondary market transactions, may not constitute securities transactions under specified circumstances. However, the Release does not constitute formal rulemaking and does not have the force of law, and the regulatory characterization of SOL and related activities therefore remains subject to ongoing development.
We monitor our assets and income for compliance under the 1940 Act and seek to conduct our business activities in a manner such that we do not fall within its definitions of “investment company” or that we qualify under one of the exemptions or exclusions provided by the 1940 Act and corresponding SEC regulations. Furthermore, if Solana is determined to constitute a security for purposes of the federal securities laws, we would take steps to reduce the percentage of Solanas that constitute investment assets under the 1940 Act. These steps may include, among others, selling Solanas that we might otherwise hold for the long term and deploying our cash in non-investment assets, and we may be forced to sell our Solanas at unattractive prices. We may also seek to acquire additional non-investment assets to maintain compliance with the 1940 Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise attractive to our business. Any of these actions could have a material adverse effect on our results of operations and financial condition. Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid being deemed to be an investment company in accordance with the safe harbor. If we were unsuccessful, and if Solana is determined to constitute a security for purposes of the federal securities laws, then we would have to register as an investment company, and the additional regulatory restrictions imposed by 1940 Act could adversely affect the market price of Solana and in turn adversely affect the market price of our Class A common stock.
In the future we may expand our business beyond the Solana treasury strategy and PoNS system operations to include other income streams and otherwise generate funds using our Solana holdings, including acquiring interests in other entities. At this time, we do not have any definitive agreements or plans in place to expand beyond acquiring and holding Solana. However, if we do acquire minority interests in other entities, this could lead to our classification as an “investment company”, which would subject us to additional regulatory controls and could have a material adverse impact on our results of operations.
We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.
Mutual funds, ETFs and their directors and management are subject to extensive regulation as “investment companies” and “investment advisers” under U.S. federal and state law; this regulation is intended for the benefit and protection of investors. We are not subject to, and do not otherwise voluntarily comply with, these laws and regulations. This means, among other things, that the execution of or changes to our Treasury Reserve Policy or our Solana treasury strategy, our use of leverage, the manner in which our Solana is custodied, our ability to engage in transactions with affiliated parties and our operating and investment activities generally are not subject to the extensive legal and regulatory requirements and prohibitions that apply to investment companies and investment advisers. Our board of directors has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect of our Solana holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding Solana.
The lack of legal recourse and insurance for digital assets increases the risk of total loss in the event of theft or destruction.
Digital assets that we acquire will not be insured against theft, loss or destruction. If an event occurs where we lose our digital assets, whether due to cyberattacks, fraud or other malicious activities, we may not have any viable legal recourse or ability to recover the lost assets. Unlike funds held in insured banking institutions, our digital assets are not protected by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. If our digital assets are lost under circumstances that render another party liable, there is no guarantee that the responsible party will have the financial resources to compensate us. As a result, we and our stockholders could face significant financial losses.
Similar paragraph at 2 of 31 other Crypto companies:
FWDI,
MARADigital asset lending arrangements may expose us to risks of borrower default, operational failures and cybersecurity threats.
Similar paragraph at 1 of 31 other Crypto companies:
FWDIAlthough we are not initially planning to lend our digital assets, from time to time, we may generate income through lending of digital assets, which carries significant risks. The volatility of such digital assets increases the likelihood that borrowers may default due to market downturns, liquidity crises, fraud or other financial distress. These lending transactions may be unsecured and so may be subordinated to secured debt of the borrower. If a borrower becomes insolvent, we may be unable to recover the loaned digital asset, leading to substantial financial losses.
Similar paragraph at 1 of 31 other Crypto companies:
FWDIAdditionally, digital asset lending platforms are vulnerable to operational and cybersecurity risks. Technical failures, software bugs or system outages could disrupt lending activities, delay transactions or result in inaccurate record-keeping. Cybersecurity threats, including hacking, phishing and other malicious attacks, pose further risks, potentially leading to the loss, theft or misappropriation of our loaned digital asset. A successful cyberattack or security breach could materially and adversely impact our financial position, reputation and ability to conduct future lending activities.
Similar paragraph at 2 of 31 other Crypto companies:
FWDI,
MARAWe will be subject to significant competition in the growing digital asset industry and our business, operating results, and financial condition may be adversely affected if we are unable to compete effectively.
We operate in a competitive environment and compete against other companies and other entities with similar strategies, including companies with significant holdings in Solana and other digital assets, and our business, operating results, and financial condition may be adversely affected if we are unable to compete effectively.
SOL is subject to technological obsolescence, including competition from emerging blockchain and artificial intelligence protocols.
Similar paragraph at 3 of 31 other Crypto companies:
DFDV,
FWDI,
HYPDThe digital asset ecosystem is characterized by rapid technological innovation, short development cycles, and intense competition among Layer 1 blockchains and related infrastructure providers. SOL faces intense competition among existing protocols, such as Aptos and Sei, and new entrants that are currently being developed. Competitors may offer superior scalability, security, interoperability, decentralization, programmability and adoption, and may attract developers
Similar paragraph at 2 of 31 other Crypto companies:
DFDV,
FWDIaway from the SOL ecosystem. Advancements in AI and blockchain technology are likely to accelerate the development of such protocols, including the development of additional networks that natively integrate AI into consensus mechanisms and other core features. If SOL is unable to evolve to address such increased competition or if Layer 2 networks believe that SOL’s core technology stack is outdated or less attractive compared with other Layer 1 networks, SOL may be considered technologically obsolete by the next-generation of protocols. The decline in the SOL network would materially impact the market value of SOL and adversely affect the value of our SOL treasury holdings and our stock price.
Similar paragraph at 3 of 31 other Crypto companies:
DFDV,
FWDI,
HYPDStaking Solana may limit our liquidity and restrict our ability to access capital in a timely manner.
As part of our digital asset treasury strategy, we may stake a portion of our Solana holdings with validators in order to earn staking rewards. Staked tokens are generally subject to “lock-up” or “unbonding” periods during which they cannot be transferred, traded, or otherwise used. Although such lock-up periods are intended to protect the stability of the protocol, they may materially reduce our immediate access to liquidity.
In addition, a portion of our SOL holdings may be subject to longer-term lock-up restrictions or otherwise considered “locked” for accounting and operational purposes. We may not be able liquidate these positions in a timely manner and may need to sell at a discount to unrestricted SOL traded on exchanges.
For purposes of financial reporting, digital assets are generally measured at fair value, and such fair value is not typically adjusted to reflect restrictions on transferability, including lock-up or unbonding periods associated with staked or otherwise restricted SOL. As a result, the carrying value of our SOL holdings may not reflect the reduced liquidity associated with staking restrictions. If we need to liquidate our Solana holdings to meet operational requirements, satisfy obligations, or respond to adverse market conditions, the inability to rapidly access staked tokens could adversely affect our financial condition, results of operations, or cash flows. Furthermore, because staking rewards are paid in additional Solana tokens, rather than cash, our ability to convert those rewards into fiat currency may depend on prevailing market liquidity and trading volumes for Solana, which could be volatile or insufficient at times.
We may be subject to additional tax liability if regulation or policy changes adversely affect the tax treatment of rewards from staking SOL.
Similar paragraph at 3 of 31 other Crypto companies:
DFDV,
FWDI,
HYPDThe U.S. federal income tax treatment of rewards from staking digital assets such as SOL remains uncertain and is currently under the subject of debate and regulatory attention. Under current guidance by the IRS, staking rewards are generally treated as ordinary income upon receipt, although additional guidance is expected pursuant to the President’s Working Group July 2025 report “Strengthening American Leadership in Digital Financial Technology.” If regulation or policy changes, or the interpretation or enforcement thereof, results in adverse tax treatment of rewards from staking SOL, we could be subject to increased audits by the IRS and additional tax liabilities.
Similar paragraph at 3 of 31 other Crypto companies:
DFDV,
FWDI,
HYPDDecentralized finance arrangements and smart contract-based protocols expose us to risks of asset loss, operational failure, and cybersecurity vulnerabilities.
Similar paragraph at 1 of 31 other Crypto companies:
FWDIWe may, from time to time, engage in decentralized finance ("DeFi") activities involving SOL. DeFi protocols are typically governed by software code and operate in decentralized environments without centralized intermediaries. While these protocols are generally designed to reduce certain forms of counterparty risk, they introduce risks associated with the underlying code, system design, and network infrastructure. Smart contracts and decentralized applications may contain bugs, vulnerabilities, or design flaws that could be exploited by malicious actors, potentially resulting in the loss, theft, or inaccessibility of SOL. Because transactions executed on blockchain networks are generally irreversible, losses resulting from smart contract exploits or coding errors may be permanent and unrecoverable. Certain smart contracts may also include administrative controls, upgradeability features, or governance mechanisms that could be exercised in ways that introduce unexpected behavior, including asset freezes, protocol changes, or unintended transfers.
In addition, DeFi protocols are subject to risks arising from market volatility, liquidity constraints, and liquidation mechanisms, particularly where SOL is used as collateral or provided as liquidity. Adverse market conditions, network congestion, or oracle failures or manipulation — including deliberate manipulation of price feeds by malicious actors to trigger liquidations or exploit protocol mechanics — may increase the likelihood of forced liquidations or losses. DeFi
protocols may also be subject to governance attacks, protocol upgrades, or other changes that could adversely affect their functionality or economic terms.
DeFi ecosystems generally operate on a permissionless and pseudonymous basis, and participants may not know the identity of counterparties interacting with a given protocol. As a result, despite the use of monitoring and compliance tools, we may inadvertently interact with protocols or counterparties associated with illicit activity, sanctions risks, or other compliance concerns, including potential exposure under regulations administered by the Office of Foreign Assets Control ("OFAC"), the Financial Crimes Enforcement Network ("FinCEN"), or other applicable authorities.
There can be no assurance that the smart contracts, decentralized applications, or other blockchain-based systems we use or rely upon will function as intended or remain secure. Any failure, exploit, or disruption of such systems could result in the loss of digital assets and could have a material adverse effect on our business, financial condition, and results of operations.
We may make, or otherwise be subject to, trade errors. Errors may occur with respect to trades in SOL or other digital assets executed on our behalf, including through DeFi protocols, onchain execution environments, or other trading venues. Trade errors can result from a variety of situations, including the purchase or sale of the wrong asset, execution of incorrect quantities, failures of automated or algorithmic trading systems, or erroneous interactions with smart contracts. Because transactions executed on blockchain networks are generally irreversible, trade errors occurring in onchain environments may not be correctable after execution, and resulting losses may be permanent. Trade errors can result in losses that could be material. To the extent that an error is caused by a third party, we may seek to recover associated losses, although there may be contractual limitations on any such recovery, and the irreversible nature of onchain transactions may limit the practical remedies available to us.
Similar paragraph at 1 of 31 other Crypto companies:
UPXIThe tax treatment of decentralized finance activities is uncertain and evolving, and adverse tax determinations could materially affect our financial condition and results of operations.
The tax treatment of DeFi activities — including liquidity provision, lending, borrowing, and the receipt of tokens or other digital assets through smart contract-based protocols — is highly uncertain and has not been comprehensively addressed by the IRS or other taxing authorities of the U.S. or other jurisdictions where we may operate. It is unclear, among other things, whether and when particular DeFi transactions give rise to taxable income or gain, how tax basis should be determined for digital assets received through DeFi protocols, and how existing tax principles applicable to traditional financial instruments and structures apply to DeFi arrangements. Future guidance, legislation, or administrative or judicial determinations may require us to recognize income or gain at times or in amounts different from those we currently anticipate, may impose additional information reporting or withholding obligations, or may result in additional taxes, interest, and penalties. Any adverse tax determination or change in applicable tax law could materially and adversely affect our financial condition and results of operations.
Stablecoins used in our operations are subject to de-pegging, issuer, and regulatory risks that could result in material losses.
We may hold, use, or transact in stablecoins in connection with our DeFi activities, trading operations, or treasury management. Stablecoins are digital assets designed to maintain a stable value relative to a reference asset, typically the U.S. dollar, but there is no guarantee that any stablecoin will maintain its peg at all times or under all market conditions. Stablecoins may lose their peg due to market stress, insufficient or mismanaged reserves, failures in algorithmic stabilization mechanisms, loss of market confidence, or other factors, any of which could result in material losses on stablecoin positions we hold or have deployed in DeFi protocols. Fiat-collateralized stablecoins are also subject to issuer risk, including the risk that the issuer fails to maintain adequate reserves or becomes insolvent or otherwise unable to honor redemption requests at par.
The regulatory treatment of stablecoins is subject to significant uncertainty and ongoing legislative and regulatory development in the United States and internationally. New or proposed legislation and regulation could impose reserve
requirements, licensing obligations, redemption mechanics, or other restrictions on stablecoin issuers or users that affect the availability, usability, or value of stablecoins we hold or utilize. Any de-pegging event, issuer failure, or adverse regulatory development affecting stablecoins could have a material adverse effect on our business, financial condition, and results of operations.
Similar paragraph at 2 of 31 other Crypto companies:
EXOD,
HUTOur financial results and the market price of our Class A common stock may be affected by the prices of Solana.
As part of our capital allocation strategy for assets that are not required to provide working capital for our ongoing operations, we have invested and will continue to invest in Solana tokens. The price of Solana has historically been subject to dramatic price fluctuations and is highly volatile. Moreover, digital assets, such as Solana, are relatively novel and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the liquidity or value of Solana.
Any decrease in the fair value of Solana below our carrying value for such assets could require us to incur a loss due to the decrease in fair market value, and such charge could be material to our financial results for the applicable reporting period, which may create significant volatility in our reported earnings. Any decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on the market price of our Class A common stock. In addition, the application of generally accepted accounting principles in the United States, with respect to Solana, may change in the future and could have a material adverse effect on our financial results and the market price of our Class A common stock.
In addition, if investors view the value of our Class A common stock as dependent upon or linked to the value or change in the value of our Solana holdings, the price of Solana may significantly influence the market price of our Class A common stock.
Due to the unregulated nature and lack of transparency surrounding the operations of many Solana trading venues, Solana trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in Solana trading venues and adversely affect the value of our Solana.
Solana trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many Solana trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in Solana trading venues, including prominent exchanges that handle a significant volume of Solana trading and/or are subject to regulatory oversight, in the event one or more Solana trading venues cease or pause for a prolonged period the trading of Solana or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.
The SEC has also brought recent actions against individuals and digital asset market participants alleging that such persons artificially increased trading volumes in certain digital assets through wash trades, or repeated buying and selling of the same assets in fictitious transactions to manipulate their underlying trading price. Such reports and allegations may indicate that the Solana market is significantly smaller than expected and that the United States makes up a significantly larger percentage of the Solana market than is commonly understood. Any actual or perceived wash trading in the Solana market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of our Solana. Negative perception, a lack of stability in the broader Solana markets and the closure, temporary shutdown or operational disruption of Solana trading venues, lending institutions, institutional investors, institutional miners, custodians, or other major participants in the Solana ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other reason, may result in a decline in confidence in Solana and the broader Solana ecosystem and greater volatility in the price of Solana. As the price of our listed securities is affected by the value of our Solana holdings, the failure of a major participant in the Solana ecosystem could have a material adverse effect on the market price of our listed securities.
The concentration of our Solana holdings enhances the risks inherent in our Solana strategy.
We have purchased Solana and intend to increase our overall holdings of Solana in the future. We currently hold less than 1% of the total Solana supply. The concentration of our Solana holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our Solana treasury strategy. The price of Solana experienced a significant decline in 2022, and any similar future significant declines in the price of Solana could have a more pronounced impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.
We face risks relating to the use of third-party exchanges in connection with our Solana strategy.
Similar paragraph at 1 of 31 other Crypto companies:
FWDIWe have used or intend to use reputable third-parties exchanges, such as FalconX, Nonco, Wintermute, Anchorage and Coinbase, to purchase Solana for our treasury. As part of our process in determining transactions with third-party exchanges, we search for reputable exchanges that have industry standard policies and procedures in place regarding data security and customer diligence related to anti-money laundering (“AML”), Office of Foreign Assets Control (“OFAC”) and know-your client (“KYC”) rules and regulations. If any of these third-party exchanges no longer meet our standards or if there is a decrease in reputable third-party exchanges, we may need to find additional counterparties and enter into additional agreements that could be on less favorable terms, which could have a material adverse effect on our business, financial condition or the results of our operations.
Similar paragraph at 2 of 31 other Crypto companies:
FWDI,
NAKAWe face risks relating to the custody of our Solana tokens, including the loss or destruction of private keys required to access our Solana tokens and cyberattacks or other data loss relating to our Solana tokens, including smart contract related losses and vulnerabilities.
We hold our Solana tokens with select regulated custodians that have duties to safeguard our private keys. In light of the significant amount of Solana tokens we anticipate that we will hold, we may need to engage additional custodians to achieve a greater degree of diversification in the custody of our Solana tokens as the extent of potential risk of loss is dependent, in part, on the degree of diversification. However, multiple custodians may utilize similar wallet infrastructure, cloud service providers or software systems, which could increase systemic technology risk.
Similar paragraph at 4 of 31 other Crypto companies:
DJT,
HYPD,
SBET,
XXIIf there is a decrease in the availability of digital asset custodians that we believe can safely custody our Solana tokens, for example, due to regulatory developments or enforcement actions that cause custodians to discontinue or limit their services in the United States, we may need to enter into agreements that are less favorable than our current agreements or take other measures to custody our Solana tokens, and our ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected. While we will conduct due diligence on our custodians and any smart contract platforms we may use, there can be no assurance that such diligence will uncover all risks, including operational deficiencies, vulnerabilities or legal noncompliance.
Currently, the insurance that covers losses of our Solana holdings may cover none or only a small fraction of the value of the entirety of our Solana holdings, and there can be no guarantee that such insurance will be maintained as part of the custodial services we have or that such coverage will cover losses with respect to our Solana. Moreover, our use of custodians exposes us to the risk that the Solana our custodians hold on our behalf could be subject to insolvency proceedings and we could be treated as a general unsecured creditor of the custodian, inhibiting our ability to exercise ownership rights with respect to such Solana. Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage we maintain related to our Solana. The legal framework governing digital asset ownership and rights in custodial or insolvency contexts remains uncertain and continues to evolve, which could result in unexpected losses, protracted recovery processes or adverse treatment in insolvency proceedings.
Solana tokens are controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet in which the Solana is held. While the Solana blockchain ledger requires a public key relating to a digital wallet to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the Solana held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, accessed by an unauthorized party, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custodians will be able to access the Solana held in the related digital wallet. Furthermore, we cannot provide assurance that our digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised as a result of a cyberattack. The Solana and blockchain ledger, as well as other digital assets and
blockchain technologies, have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For more information on cybersecurity threats, please see the risk factor titled, “If we or the third parties with whom we work experience a security breach, cyber incident, or vulnerability impacting our systems or our data, or if unauthorized parties obtain access to our Solana, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our Solana and our financial condition and results of operations could be materially adversely affected.”
As part of our treasury management strategy, we may engage in staking, restaking, or other permitted activities that involve the use of “smart contracts” or decentralized applications. The use of smart contracts or decentralized applications entails certain risks including risks stemming from the existence of an “admin key” or coding flaws that could be exploited, potentially allowing a bad actor to issue or otherwise compromise the smart contract or decentralized application, potentially leading to a loss of our Solana tokens. Like all software code, smart contracts are exposed to risk that the code contains a bug or other security vulnerability, which can lead to loss of assets that are held on or transacted through the contract or decentralized application. Smart contracts and decentralized applications may contain bugs, security vulnerabilities or poorly designed permission structures that could result in the irreversible loss of Solana tokens or other digital assets. Exploits, including those stemming from admin key misuse, admin key compromise, or protocol flaws, have occurred in the past and may occur in the future.
Similar paragraph at 1 of 31 other Crypto companies:
HYPDOur Solana holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
Historically, the Solana 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. During times of market instability, we may not be able to sell our Solana at favorable prices or at all. For example, a number of Solana trading venues temporarily halted deposits and withdrawals in 2022, although the Coinbase exchange (a major U.S.-based crypto exchange) has, to date, not done so. As a result, our Solana holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, Solana we hold with our custodians and transact with our trade execution partners will 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. For example, U.S. banks are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor in the case of the bank’s insolvency. U.S. broker-dealers are covered by the Securities Investor Protection Corporation, which ensures recovery of the securities by the depositor. In contrast, cryptocurrency custodians do not offer such protections. If a custodian were to become insolvent, it is possible that we face delays or difficulties obtaining our digital assets. Moreover, there have been a number of instances in which custodians have used customer funds to fund their own operations. If that were the case with our custodian and the custodian were to become insolvent and file for bankruptcy, we may not be able to obtain all of the digital assets that we had deposited with the custodian. Even if we were to obtain our digital assets, it may require a considerable amount of time, which could adversely impact our financial stability. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered Solana or otherwise generate funds using our Solana holdings, including in particular during times of market instability or when the price of Solana has declined significantly. If we are unable to sell our Solana, enter into additional capital raising transactions, including capital raising transactions using Solana as collateral, or otherwise generate funds using our Solana holdings, or if we are forced to sell our Solana at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.
If we or the third parties with whom we work experience a security breach, cyber incident, or vulnerability impacting our systems or our data, or if unauthorized parties obtain access to our Solana, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our Solana and our financial condition and results of operations could be materially adversely affected.
In the ordinary course of our business, we and the third parties with whom we work, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual property,
trade secrets and our Solana (collectively, sensitive information). Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties with whom we work. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors. Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we, the third parties with whom we work, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our business.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats. In particular, severe ransomware attacks are becoming increasingly prevalent — particularly for companies like ours that are engaged in critical infrastructure or manufacturing — and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of and theft of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Remote work has increased risks to our information technology systems and data, as our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.
Similar paragraph at 1 of 31 other Crypto companies:
NAKAWe rely on third parties to operate critical business systems to process sensitive information in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, content delivery to customers, and other functions. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work). We have not and may not in the future, however, detect and remediate all such vulnerabilities including on a timely basis. Further, we have and may in the future experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident.
Similar paragraph at 1 of 31 other Crypto companies:
NAKA
investigation costs, regulatory penalties and fines, and legal proceedings. Our insurance coverage may not be adequate to cover all the costs related to such cybersecurity incidents.
Similar paragraph at 2 of 31 other Crypto companies:
GEMI,
NAKASecurity breaches and cyberattacks are of particular concern with respect to our Solana. Solana and other blockchain-based cryptocurrencies and the entities that provide services to participants in the Solana ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For example, in October 2021 it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers. Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400 million in digital assets from customers. A successful security breach or cyberattack could result in:
a partial or total loss of our Solana in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our Solana;
improper disclosure of data and violations of applicable data privacy and other laws; or
significant regulatory scrutiny, investigations, fines, penalties, and other legal, class action lawsuits or mass arbitration demands, regulatory, contractual and financial exposure.
Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader Solana ecosystem or in the use of the Solana network to conduct financial transactions, which could negatively impact the market price of Solana and in turn negatively impact our financial condition and results of operations and the market price of our common stock.
The Blockchain protocols, including some of the networks and protocols of the Solana tokens we hold, are supported by foundations and/or founding teams that may influence the development of our the Blockchain protocols and could adversely affect the value of the Solana tokens we hold in our treasury.
The Blockchain protocols, including certain of the networks and protocols of Solana tokens we hold, are supported by foundations and/or founding teams. In contrast to certain Blockchain assets where governance decisions are largely made by a decentralized group of individuals, the development of Solana tokens and protocols may be disproportionately influenced by these foundations and/or founding teams. For example, Solana Labs, Inc. (“Solana Labs”) and the Solana Foundation support the Solana project and play a significant role in advancing the overall growth and development of the ecosystem. They can propose amendments to the Solana network’s source code, but implementation generally depends on adoption by the network’s validators and users. To the extent Solana Labs and/or the Solana Foundation propose any amendments to the Solana network’s source code that are adopted by users of the Solana network, the Solana network will be subject to new source code that may adversely affect the value of SOL. As a result, their decisions could negatively impact the value of the Solana tokens we hold in our treasury.
We face significant risks relating to disruptions, forks, 51% attacks, hacks, network disruptions, or other adverse events or other compromises to the cryptocurrency blockchains, which could materially and adversely impact our business, financial condition and results of operations.
Similar paragraph at 1 of 31 other Crypto companies:
CORZBlockchain networks are maintained by decentralized networks of participants, and as such are susceptible and vulnerable to a variety of risks, including disruptions, security breaches, and fundamental technical issues. Both networks are vulnerable to attacks by malicious actors who gain control of a significant portion of the network’s mining hash rate, a scenario commonly referred to as a 51% attack. In such an event, the attacker could double-spend transactions, reverse previously confirmed transactions, or otherwise disrupt the normal operations of the network. Successful 51% attacks have historically undermined trust in affected blockchain networks and could materially decrease the value of cryptocurrency assets.
Additionally, forks, or splits in the underlying protocol, may occur when participants fail to reach consensus on proposed upgrades or changes. Forks can lead to the creation of duplicate networks, confusion among market participants, dilution of the original network’s value, and disruption of the network’s operations. Hard forks, in particular, can materially and adversely impact the perceived stability and value of digital assets, leading to reduced demand and price declines.
Further, hacks and other security breaches targeting the core infrastructure of blockchain networks or major participants, such as exchanges and custodians, could severely impact the reputation and market confidence in these networks. Exploits of protocol-level vulnerabilities could also compromise the integrity of the cryptocurrency blockchains, resulting in a substantial loss of value.
The success and growth of cryptocurrency assets depend significantly on their continued security, stability, and scalability. Any technical failures, consensus breakdowns, governance disputes, or regulatory interventions that diminish confidence in the networks or impair their functionality could lead to a material decline in their market prices, which could materially and adversely impact our business, financial condition and results of operations. A sustained or significant decrease in the price or liquidity of cryptocurrencies, whether due to 51% attacks, forks, hacks, network disruptions, or other adverse events, could negatively impact our business, financial condition, and results of operations. Furthermore, even the perception that any of these events could occur may lead to significant market volatility and price declines, adversely affecting our business, financial condition and results of operations
Our Solana treasury reserve business model exposes us to various risks, including the following:
● Solana and other digital assets are subject to significant legal, commercial, regulatory, and technical uncertainty, and our Solana strategy subjects us to enhanced regulatory oversight;
● regulatory changes could impact our ability to operate validators in the future should we decide to do so or receive rewards;
● regulatory scrutiny of the Company’s activities may increase, potentially limiting our operations; potential litigation risks exist related to smart contract vulnerabilities, validator operations, or our business activities;
● uncertainty around Solana’s regulatory status may impact our ability to list on certain exchanges;
● changes in political administration may not guarantee a favorable regulatory environment for Solana; and
● increased regulatory focus on Layer-1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements.
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The Tokenization of our Class A common stock could introduce risks and uncertainties that adversely affect the market for, and the trading price of, our Class A common stock, among other potential consequences.
We are evaluating the feasibility of enabling onchain holding and trading of our Class A common stock (“Tokenized HSDT”). While Tokenized HSDT would provide an additional mechanism for investors to hold and trade shares in the Company, which may improve settlement efficiency and increase accessibility, it could also introduce new risks and uncertainties that could adversely affect the market for, and the trading price of, both Tokenized HSDT and Nasdaq-listed Class A common stock (“Traditional HSDT”).
Similar paragraph at 1 of 31 other Crypto companies:
GLXYThe market for tokenized securities is nascent, and there can be no assurance that a liquid or orderly market for Tokenized HSDT will develop or be sustained. Blockchain-based mechanisms, like decentralized exchanges, may have significantly less liquidity, volume, transparency or regulatory oversight compared to national securities exchanges, such as Nasdaq. This could fragment liquidity across platforms, impair price discovery, widen bid-ask spreads, and lead to prolonged price discrepancies between Tokenized and Traditional HSDT—especially where arbitrage is limited by operational or regulatory constraints.
Similar paragraph at 2 of 31 other Crypto companies:
GEMI,
GLXYOn October 17, 2025, we entered into a Digital Transfer Agency Agreement with Superstate Services LLC as our digital asset transfer agent, pursuant to which it has agreed to create and maintain an “Allowlist” of wallet addresses of individuals and entities who have completed onboarding requirements and are permitted to hold, transfer and facilitate transfers of Tokenized HSDT. As a result, access to Tokenized HSDT will be restricted to holders who meet the onboarding requirements of our digital transfer agent, potentially limiting investor participation and market depth, and resulting in greater price volatility.
Similar paragraph at 2 of 31 other Crypto companies:
FWDI,
GLXYFurthermore, market intermediaries may face unclear or evolving obligations when interacting with tokenized securities such as Tokenized HSDT, and the application of the U.S. federal securities laws and other regulations to the trading of tokenized securities remains uncertain. This may prevent or discourage market intermediaries from holding, transacting, or facilitating transactions in Tokenized HSDT, further limiting liquidity. Reduced liquidity in Tokenized HSDT, whether due to general investor unfamiliarity, uncertain demand, operational friction, inefficient linkages between the markets for Tokenized HSDT and Traditional HSDT or otherwise, could result in lower trading prices for Tokenized HSDT, and such negative price signaling from the market for Tokenized HSDT could adversely impact the trading price of Traditional HSDT. In addition, if regulatory authorities determine that the platforms, mechanisms or participants involved in the secondary trading of Tokenized HSDT do not comply with applicable law, we or such intermediaries could face enforcement actions or fines or be required to unwind or restructure aspects of the project. These risks could lead to diminished investor confidence, reduced participation in the trading of Tokenized HSDT, and corresponding negative effects on the trading price, volatility and/or liquidity of Traditional HSDT.
Similar paragraph at 2 of 31 other Crypto companies:
GEMI,
GLXYTokenized HSDT would also be subject to the broader risks associated with digital assets, including cybersecurity, technological failures, and operational risks, which could affect our reputation, financial condition, and operating results. As of March 30, 2026, the Company has not issued Tokenized HSDT.
Similar paragraph at 2 of 31 other Crypto companies:
GEMI,
GLXYWe and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, rules, and industry standards, as well as policies, contracts and other obligations related to data privacy and security. Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to enforcement or litigation (including class claims) and mass arbitration demands, fines or penalties, a disruption of clinical trials or commercialization of products, reputational harm, or other adverse business effects.
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GMEIn the ordinary course of business, we process sensitive information. Accordingly, we are, and may in the future become, subject to numerous data privacy and security obligations, such as various federal, state, local and foreign data privacy and security laws, regulations, guidance, and industry standards as well as external and internal privacy and security policies, contracts and other obligations that apply to data privacy and security and our processing of personal data and the processing of personal data on our behalf.
In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act) and other similar laws (e.g., wiretapping laws). For example, the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations, imposes requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH, through its implementing regulations, makes certain of HIPAA’s privacy and security standards directly applicable to business associates, defined as a person or organization, other than a member of a covered entity’s workforce, that creates, receives, maintains or transmits protected health information for or on behalf of a covered entity for a function or activity regulated by HIPAA as well as their covered subcontractors.
In the past few years, numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018 (“CCPA”), applies to personal data of consumers, business representatives, and employees who are California residents, and requires covered companies to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages. The CCPA and other comprehensive U.S. state privacy laws exempt some data processed in the context of clinical trials, but these developments may further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties with whom we work. Such laws, if they become applicable to us in the future, may significantly impact our business activities, exemplifying the vulnerability of our business to evolving regulatory environment related to personal data and protected health information. Similar laws are being considered in other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.
Outside the United States, an increasing number of laws, regulations and industry standards govern privacy, data protection, information security and cross-border personal data transfers. For example, the European Union’s General Data Protection Regulation (“EU GDPR”) and the United Kingdom’s GDPR (“UK GDPR”) (collectively, “GDPR”) impose strict requirements for processing personal data. Under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to €20,000,000 under the EU GDPR / 17.5 million pounds sterling under the UK GDPR, or up to 4% annual total revenue, in each case, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries. In particular, the European Economic Area (“EEA”) and the United Kingdom (“UK”) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate. Some jurisdictions have adopted, and others may in the future adopt, similarly stringent data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto (which allows for transfers for relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States. If there is no lawful manner for us to transfer personal data from the EEA, UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we may face significant adverse consequences, including the interruption or degradation of our operations (such as by limiting our ability to conduct clinical trial activities in Europe and elsewhere), the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, the inability to transfer data and work with partners, vendors and other third parties, increased exposure to regulatory actions, substantial fines and penalties, and injunctions against processing or transferring personal data necessary to operate our business. Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups. Some European regulators have also ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.
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DJTAdditionally, the U.S. Department of Justice issued a rule entitled the Preventing Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, which places additional restriction on certain data transactions involving countries of concern (e.g., China, Russia, Iran) and covered persons (i.e., individuals and entities who are designated as such by the U.S. Attorney General or considered “foreign persons” and are majority owned by, organized under the laws of, a primary resident in, or a contractor of, a covered person or country of concern, as
applicable) ) that may impact certain business activities such as vendor engagements, sale or sharing of data, employment of certain individuals, and investor agreements. Violations of the rule could lead to significant civil and criminal fines and penalties. The rule applies regardless of whether data is anonymized, key-coded, pseudonymized, de-identified or encrypted, which presents particular challenges for companies like ours and may impact our ability to engage in transactions or agreements with certain third parties in the future.
In addition, privacy advocates and industry groups have proposed, and may in the future propose, standards with which we are legally or contractually bound to comply. We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. We publish privacy notices and other statements regarding data privacy and security. Regulators in the United States are increasingly scrutinizing these statements, and if any of our privacy notices or related materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
Furthermore, our employees and personnel may use generative artificial intelligence (“AI”) technologies to perform their work, and the disclosure and use of personal data in such technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws and regulations regulating generative AI. Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. If we are unable to use AI technologies, it could make our business less efficient and result in competitive disadvantages.
Obligations related to data privacy and security (including individuals’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. As a result, preparing for and complying with these obligations requires significant resources and may necessitate changes to our information technologies, systems and practices, as well as those of any third parties that process personal data on our behalf.
Although we endeavor to comply with our applicable privacy and security obligations, we may at times fail (or be perceived to have failed) to do so. Moreover, despite our efforts, we may not be successful in achieving compliance if our employees, third-party collaborators, service providers, contractors or consultants fail to comply with such obligations, which could negatively impact our business operations and compliance posture. If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable obligations related to data privacy and security, we could face significant consequences including, but not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits and inspections, and similar); litigation (including class-related claims) and mass arbitration demands; additional reporting requirements and/or oversight; temporary or permanent bans or restrictions on all or some processing of personal data; orders to destroy or not use personal data; and imprisonment of company officials. In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations. Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: interruptions or stoppages in our business operations (including clinical trials); inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations.
Similar paragraph at 1 of 31 other Crypto companies:
NAKA
Generally, global macroeconomic conditions remain uncertain, largely due to the effects of geopolitical conflicts in the Middle East, disruptions in the banking system and financial markets, high inflation, sustained high interest rates, and unpredictable trade policies, including U.S. tariffs imposed or threatened to be imposed, any retaliatory actions taken by other countries, and uncertainties regarding the ability to obtain refunds for previously paid tariffs that have subsequently been invalidated, customs regulations and other trade restrictions. Trade disputes, trade restrictions, tariffs and other geopolitical tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also negatively impact customer demand for our products or services, delay purchases or renewals, limit expansion opportunities with customers, limit our access to capital, or otherwise negatively impact our business and operations. Ongoing tariff, trade restrictions and macroeconomic uncertainty has and may continue to contribute to volatility in the price of our Class A common stock.
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New developments occur rapidly, and we anticipate that we will face increasing competition as new companies enter our market.
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We have exposure to digital assets through a thirty party investment vehicle, and therefore, rely, and will continue to rely, on such third-party custodian and fund managers to manage our SOL and cannot exercise direct control with respect to that SOL. For example, we hold an investment in a series fund (the “Digital Asset Fund Investment”), a pooled investment vehicle whose sole purpose is to acquire, hold, stake, and manage Locked SOL tokens subject to contractual and protocol-level lock-up restrictions. Our interest represents an membership interest in the Digital Asset Fund Investment and does not constitute direct ownership of the underlying SOL tokens. The underlying locked tokens held in Digital Asset Fund Investment are subject to monthly unlocks at relatively even intervals and amounts with the final unlock in January 2028. Such third-party investment vehicle may determine to cease providing services to us at any time, which would affect our business and results of operations. Additionally, we rely, and will continue to rely, on third-party research institutions, collaborators and consultants. Such third-party research institutions, collaborators and consultants may determine to cease providing services to us at any time, which would delay our product development and commercialization efforts.
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Regulatory uncertainty and evolving treatment of digital assets could adversely affect our business.
The regulatory treatment of digital assets such as SOL remains subject to uncertainty. Although recent interpretive guidance from the SEC and CFTC suggests that certain digital assets, including SOL, may be treated as digital commodities rather than securities, such guidance is not binding on courts or other regulatory authorities and may be modified or withdrawn.
If SOL were ultimately determined to constitute a security under U.S. federal or state securities laws, or if transactions involving SOL were deemed to involve the offer or sale of securities, we could become subject to additional registration, reporting, and compliance obligations, as well as restrictions on our ability to acquire, hold, transfer, or dispose of SOL. In such a scenario, certain market participants, including trading venues, custodians, and other service providers, may limit or cease support for SOL, which could reduce liquidity, limit our ability to transact on favorable terms, or require us to seek alternative service providers or restructure aspects of our operations.
Conversely, if SOL is treated as a digital commodity, it may be subject to regulation by the CFTC and other authorities governing commodities markets, as well as evolving requirements applicable to market participants in digital asset ecosystems. Changes in regulatory treatment or the imposition of new rules, interpretations, or enforcement actions could increase our compliance costs, impose operational constraints, or otherwise adversely affect our business, financial condition, and results of operations.
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6 more
device can be costly and time consuming, and we may not be able to successfully obtain pre-market reviews on a timely basis, if at all.
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The US federal healthcare Anti-Kickback Statute prohibits any person from, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in cash or in kind, to
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Conflicts of interest may arise because certain of our directors hold, or may in the future hold, a management or board position with Summer Wisdom Holdings Limited and Pantera Capital Management LP.
Pantera Capital Management L.P., a Delaware limited partnership (“Pantera”), and Summer Wisdom Holdings Limited, a Cayman Islands exempted company (“Summer”) are our stockholders and together hold [ ]% of our Class A common stock. From time to time, certain of our directors are, and may become, partners, directors or officers of Summer and
Pantera. In particular, as of the date of this Form 10-K, Joseph Chee serves as our Executive Chair while being a founder of Summer since 2017, and Comso Jiang serves as a member of our Board while being a general partner of Pantera. The interests of such directors in Summer or Pantera, respectively, and us could create, or appear to create, conflicts of interest with respect to decisions involving both us and Summer or Pantera that could have different implications for them and us. On September 15, 2025, we entered into a Strategic Advisor Agreement (the “Strategic Advisor Agreement”) with Pantera Capital and Summer, pursuant to which we engaged each of Pantera and Summer to provide strategic advice and guidance relating to the Company’s business, operations, growth initiatives and industry trends in the crypto technology sector for an initial term of two (2) years, which term automatically renews for successive periods of one (1) year each. Additionally, on September 15, 2025, we entered into a Trading Advisory Agreement (the “Trading Advisory Agreement”) with Pantera, pursuant to which we engaged Pantera to manage the investment of substantially all of ours digital assets, digital asset derivatives, cash and other assets for an initial term of ten (10) years, which term automatically renews for successive periods of one (1) year each, subject to the mutual agreement of us and Pantera. Conflicts of interest could also arise if we enter into any new arrangements with Summer or Pantera in the future.
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On April 1, 2025, the Company received the Extension Notice from Nasdaq notifying the Company that, following the hearing process with respect to the Company’s deficiency with the Minimum Bid Price Requirement, Nasdaq granted the Company an extension, until June 30, 2025 to regain compliance with the Minimum Bid Price Requirement as well as the Stockholders’ Equity Requirement.
On June 3, 2025, the Company received formal notification from Nasdaq confirming that we had regained compliance with the Minimum Bid Price Requirement following our reverse split at a ratio of 1-for-15, which became effective May 2, 2025 (the “May 2025 Reverse Stock Split”).
On July 2, 2025, a reverse split at a ratio of 1-for-50 became effective (the “July 2025 Reverse Stock Split”).
On July 7, 2025, the Company received formal notification from Nasdaq that, following the completion of the issuance and sale of an aggregate of 52,241 shares of the Company’s common stock, pre-funded warrants to purchase up to 3,131 shares of common stock and accompanying common warrants to purchase up to 55,372 shares of common stock (the
“2025 Offering”), the Company has regained compliance with the Stockholders Equity Requirement. Consequently, following receipt of such notification, the Company is now in compliance with all applicable criteria for continued listing on the Nasdaq Capital Market, and pursuant to Nasdaq Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor until July 7, 2026.
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We also believe that delisting would likely result in decreased liquidity and/or increased volatility in our Class A common stock and could harm our business and future prospects. In addition, we believe that, if our Class A common stock is delisted, our stockholders would likely find it more difficult to obtain accurate quotations as to the price of the Class A common stock and it may be more difficult for stockholders to buy or sell our Class A common stock at competitive market prices, or at all.
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Upon the exercise of our outstanding warrants, holders of our Class A common stock may experience immediate dilution and the market price of our common stock may be adversely affected.
As of March 27, 2026, there were (i) warrants to purchase 619 shares of our Class A common stock issued and outstanding at a weighted average price of $6.888 per share, (ii) pre-funded warrants to purchase 20,166,021 shares of our Class A common stock issued and outstanding at a weighted average price of $0.001 per share, (iii) stapled warrants to purchase 73,941,196 shares of our Class A common stock issued and outstanding at an exercise price of $10.134 per share, (iv) advisor warrants to purchase 7,394,119 shares of our Class A common stock issued and outstanding at a price of $0.001 per share, (v) Series A warrants to purchase up to 485 shares of our Class A common stock at an exercise price of $1,687.50 per share, (vi) Series C warrants to purchase up to 4,969 shares of the Company’s Class A common stock and Series D warrants to purchase up to 3,312 shares of our Class A common stock at an exercise price of $563.25 and (vii) inducement warrants to purchase up to 190 shares of our Class A common stock at an exercise price of $1,856.25 per share. If any portion of the outstanding warrant is exercised for shares of our Class A common stock when the market price is higher than the exercise price prior to the expiration dates, our stockholders may experience immediate dilution and the market price of our Class A common stock may be adversely affected.
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New in the latest 10-Q
108 paragraphs in the 10-Q filed Aug 14, 2026 with nothing like
them in the 10-Q filed May 15, 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.
10-Q
Delaware 36-4787690 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1650 Market Street, Suite 3600, PMB 17139084 19103 Philadelphia, Pennsylvania (Zip Code) (Address of principal executive offices)
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Financial statements and notes
Stockholders' Equity Mezzanine Equity Class A Common Stock Additional Treasury Stock Accumulated Accumulated Redeemable
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Stockholders' Equity Mezzanine Equity Class A Common Stock Additional Treasury Stock Accumulated Accumulated Redeemable
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In connection with the PoNS Asset Sale, in April 2026, the Company terminated the employment of certain employees supporting the PoNS business, for which severance was offered and paid to such employees totaling $ 1.4 million. On May 12, 2026, the Company entered into separation agreements with the Company's former Chief Executive Officer and former Chief Financial Officer and it paid lump-sum severance of $ 3.0 million and $ 2.4 million, respectively. Together with the $ 1.4 million of PoNS-related severance described above, severance expense was $ 6.8 million and presented in "General and administrative expenses" in the unaudited condensed consolidated statement of operations and comprehensive loss for each of the three and six months ended June 30, 2026. The agreements did not accelerate or otherwise modify the former officers' equity awards; vested options remain exercisable under their original terms and unvested awards were forfeited as of the separation date. See Note 10.
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Certain amounts recorded in the prior period unaudited condensed consolidated financial statements have been reclassified to conform to the current period financial statement presentation. These reclassifications had no effect on previously reported operating results.
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On April 21, 2025, at the annual meeting of stockholders the stockholders of the Company approved a potential reverse stock split at a ratio of 1-to-2 to 1-to-30. The Board subsequently approved a reverse stock split of 1-for-15, which became effective on May 2, 2025 (the “May 2025 Reverse Stock Split”).
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On May 23, 2025, at a special meeting of stockholders the stockholders of the Company approved a potential reverse stock split at a ratio of 1-to-2 to 1-to-250. The Board subsequently approved a reverse stock split of 1-for-50, which became effective on July 1, 2025 (the “July 2025 Reverse Stock Split” and together with the May 2025 Reverse Stock Split, the “Reverse Stock Splits”).
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The Company applies the guidance in Accounting Standards Codification (“ASC") 480-10-S99, Classification and Measurement of Redeemable Securities, to determine the appropriate classification of redeemable equity instruments. Shares of Class A common stock that are redeemable upon the occurrence of events that are not solely within the control of the Company are classified as mezzanine equity, presented on the unaudited condensed consolidated balance sheets between total liabilities and permanent stockholders' equity.
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Mezzanine equity is initially measured at the gross proceeds allocated to the redeemable shares, reduced by (i) the fair value of the associated put option derivative liability recognized at inception and (ii) direct share issuance costs allocated to the redeemable shares. The carrying value of the mezzanine equity is accreted toward the contractual redemption value to the extent that the combined carrying value of the mezzanine equity and the associated put option derivative liability is less than the accreted contractual redemption value at the reporting date.
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The Company's option contracts are freestanding derivative instruments and have not been designated under hedge accounting. Premiums received at options contract inception are initially recorded on the unaudited condensed consolidated balance sheets, and subsequently reflected in earnings consistent with the subsequent fair value changes of the related options. The fair value of these written options is measured using standard option-pricing models incorporating SOL spot prices, time to expiration, and volatility. Because no observable market implied-volatility surface for SOL is available, volatility is estimated using trailing realized volatility of SOL and is not corroborated by observable market data. Accordingly, the options are classified as Level 3 within the fair value hierarchy. Changes in the fair value of the options are recognized on the unaudited condensed consolidated statements of operations and comprehensive loss within “Loss on digital asset derivatives”. Outstanding derivative liabilities as of June 30, 2026 are presented on the condensed balance sheets within "Accrued and other current liabilities".
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Premiums received and paid on option contracts, cash settlements of option contracts, and cash posted and returned as margin collateral are presented within investing activities on the unaudited condensed consolidated statements of cash flows. Changes in the fair value of the options are non-cash and are reversed in the reconciliation of net loss to net cash used in operating activities.
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Operating segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s Chief Executive Officer views the Company’s operations and manages its business based solely on consolidated financial results and does not evaluate these operating segments separately, therefore, the Company has a single reporting segment and the determination of the single segment is consistent with the information provided to the CODM. The CODM reviews assets as presented on the consolidated balance sheets and reviews significant segment expenses in the same manner that they are reviewed on the consolidated statement of operations and comprehensive loss.
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As of June 30, 2026, the Company’s holdings of digital assets were concentrated with two custodians used by the Company to hold digital assets, including unrestricted SOL (“Unlocked SOL”), which unless qualified otherwise, shall only refer to unrestricted SOL tokens that are readily transferable on-chain on the Solana network or staked SOL subject to the normal unbonding period and restricted SOL subject to contractual lock-up (“Locked SOL”). The Company primarily holds SOL at custodians but may also hold cash and cash equivalents. As of June 30, 2026, the Company held $ 2.7 million in fiat currency at custodians which is presented on the unaudited condensed consolidated balance sheets within "Cash and cash equivalents". The Company does not hold a significant portion of digital assets at an exchange. As of June 30, 2026, the Company held less than 1 % of the total supply of SOL.
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Certain digital assets, digital assets receivable and digital assets underlying equity investments are subject to sale restrictions through lock-up schedules typically associated with lock-up agreements with digital asset foundations such as the Solana Foundation.
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(1) Includes realized losses of $ 7.0 million for the three months ended March 31, 2026. Does not include losses from digital assets receivable or digital asset fund investment.
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(2) Includes realized losses of $ 25.4 million for the three months ended June 30, 2026. Does not include losses from digital assets receivable or digital asset fund investment.
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In connection with the Company’s OTC SOL put options strategy, the Company pledges or transfers SOL to institutional counterparties to collateralize the underlying transactions. During the three and six months ended June 30, 2026, these transactions were governed by long-form confirmations and International Swaps and Derivatives Association agreements (together, “ISDA Agreements”). Under the ISDA Agreements, the Company’s SOL are pledged as collateral and can be rehypothecated, re-pledged, or otherwise deployed by the derivative counterparties. The Company’s transfer of digital assets into digital assets collateral receivable is a derecognition event and the Company recognizes a realized loss on digital assets upon derecognition of the pledged SOL (see Note 3).
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The Company's outstanding SOL put option contracts as of June 30, 2026 are collateralized by 31,436 of the Company’s SOL, which have been transferred to an institutional counterparty. These 31,436 tokens are presented in aggregate as approximately $ 2.3 million in “Digital assets collateral receivable” on the unaudited condensed consolidated balance sheets as of June 30, 2026. Due to (i) the Company's limited historical loss experience for digital assets collateral receivable, (ii) the counterparty being an institutional counterparty and (iii) the short tenor of the outstanding options contracts there is no expected credit loss recorded as of June 30, 2026.
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The Company enters into over-the-counter ("OTC") option contracts referencing the price of SOL in connection with managing the risk and return profile of its digital asset treasury. The primary underlying risk exposure of these contracts is SOL price risk. The contracts are not designated as hedging instruments under ASC 815-20. The Company writes put options to generate premium income on its treasury holdings, and enters into call option spreads to obtain participation in increases in the price of SOL. During the six months ended June 30, 2026, the Company (i) wrote SOL put options, receiving premium in exchange for the obligation to pay at maturity any excess of the strike price over the settlement price, and (ii) entered into SOL call option spreads, purchasing near-the-money calls and simultaneously writing further out-of-the-money calls of equal size and maturity for a net premium paid, obtaining participation in increases in the price of SOL up to the strike price of the written calls. All contracts were cash-settled, except one written put option that provided for physical settlement and expired unexercised, and all were collateralized by SOL (see Note 6) and U.S. dollars posted as initial and variation margin. U.S. dollars posted as margin collateral of $ 0.2 million as of June 30, 2026, are included in "Prepaid expenses and other current assets".
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As of June 30, 2026, the Company’s outstanding SOL put option contracts referenced 288,805 SOL with strike prices ranging from $ 63.00 to $ 69.30 and maturities extending through July 10, 2026. See Note 8 for information regarding the fair value measurement of these contracts. On July 10, 2026, the SOL put options expired out-of-the-money.
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In connection with the April 2026 Registered Direct Offering, the Company granted the Purchasers the right to require the Company to repurchase their shares upon certain qualifying events. The Put Options were issued as consideration in that offering rather than for risk management purposes, and their primary underlying risk exposure is the price of the Company's Class A common stock. The Put Options are freestanding derivative instruments classified as liabilities and are not designated as hedging instruments. See Note 9 for the terms of the Put Option Agreements and the related mezzanine equity classification.
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Derivatives not designated as hedging instruments Balance sheet location June 30, 2026 December 31, 2025 Digital asset (SOL) price contracts — written put options Accrued and other current liabilities $299 $ Equity contracts — RDO put options Derivative liability 4,207 — ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Total derivative liabilities $4,506 $
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The Company does not offset derivative assets and derivative liabilities on the unaudited condensed consolidated balance sheets. Under the ISDA Agreements, amounts owed between the parties may be set off, and posted collateral may be applied against outstanding obligations, only upon an event of default or termination event with respect to the other party. Because these rights are conditional, the Company presents derivative assets and liabilities on a gross basis. The Put Options are not subject to a master netting arrangement.
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The following table presents the gross and net amounts of the Company's OTC SOL option contracts, which are subject to enforceable master netting arrangements under the ISDA Agreements, as of June 30, 2026 (in thousands):
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OTC SOL Options Gross amount of recognized derivative liabilities $ 299 Gross amounts offset in the balance sheet — Net amount presented in the balance sheet 299 Collateral pledged not offset in the balance sheet (299) Net amount $ —
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(1) Of the total gains and losses included in earnings, a gain of $ 56 thousand in "Loss on digital asset derivatives" and a loss of $ 322 thousand in "Change in fair value of derivative liability" are attributable to derivative instruments still held as of June 30, 2026.
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Certain of the Company's derivative instruments contain provisions that could accelerate settlement or increase collateral requirements upon a deterioration in financial condition. The Put Options may be exercised upon a failure of the Company's net debt to total capitalization ratio to remain at or below 30 %. Under the ISDA Agreements governing the OTC SOL options, a single-day decline of 25 % or more in the net equity of the Company's subsidiary that is party to those agreements, or a default on indebtedness of $ 100,000 or more, constitutes an additional termination event, upon which the minimum transfer amount for collateral demands is reduced to zero, the counterparty's obligation to return posted collateral is suspended, and the counterparty may liquidate posted collateral and terminate outstanding transactions.
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As of June 30, 2026, the aggregate fair value of derivative liabilities containing such features was $ 4.5 million, consisting of $ 4.2 million of Put Options, against which no collateral was posted, and $ 0.3 million of OTC SOL options, against which the Company has posted collateral with a fair value of $ 2.6 million. Had these features been triggered as of June 30, 2026, the amount required to settle the Put Options would have been $ 8.1 million; posted collateral exceeded the net liability under the OTC SOL options, and no additional collateral would have been required.
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The following table presents the Company's financial assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of June 30, 2026 (in thousands):
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**Underlying assets subject to contractual sales restriction. See Notes 4 and 5.
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***Represents the fair value of written OTC SOL put option contracts outstanding as of June 30, 2026, which are included within "Accrued and other current liabilities" on the unaudited condensed consolidated balance sheets. Fair value is estimated using standard option-pricing models incorporating SOL spot prices, implied volatility, and time to expiration. See Notes 2 and 7.
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****Represents the fair value of put option agreements entered into in connection with the April 2026 Registered Direct Offering, which are included within "Derivative liability" on the unaudited condensed consolidated balance sheets. Fair value is estimated using an option lattice model. See Notes 2 and 9.
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Premiums received for OTC put option derivative liabilities at inception are initially recorded on the unaudited condensed consolidated balance sheets, and subsequently reflected in earnings consistent with the subsequent fair value changes of the related options. The fair value of these written options is measured using standard option-pricing models incorporating SOL spot prices, time to expiration, and volatility. Because no observable market implied-volatility surface for SOL is available, volatility is estimated using trailing realized volatility of SOL and is not corroborated by observable market data. Accordingly, the options are classified as Level 3 within the fair value hierarchy.
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The fair value of the RDO put option derivative liability is estimated using an option lattice model incorporating assumptions related to the likelihood and timing of qualifying exercise triggering events, the contractual repurchase price, the risk-free rate, expected volatility of the Company's Class A common stock, and the contractual internal rate of return floor of 7.0 % per annum. The put options are classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs, primarily expected volatility. The RDO put option derivative liability is presented in "Derivative liability" on the unaudited condensed consolidated balance sheets.
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Written Put Option Derivative Liability RDO Put Option Derivative Liability Implied volatility - range 71.5% - 80.9% 72.8% Implied volatility - weighted average(1) 73.2% n/a
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(1) The weighted average implied volatility is calculated by weighting each contract's implied volatility by the relative fair value of that contract.
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The fair value measurements of the OTC SOL put options and the Put Options incorporate volatility assumptions that are not observable in the market. An increase in the volatility assumption used would increase the fair value of the related derivative liability, and a decrease would reduce it. Because the repurchase price of the Put Options accretes at a rate in excess of the risk-free rate, exercise prior to the latest available exercise date would not be economically advantageous to the holders. Accordingly, the fair value of the Put Options is not significantly sensitive to assumptions regarding the timing of exercise.
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Purchased Call Options Fair Value as of December 31, 2025 $ — Purchases 1,147 Settlements — Total loss included in earnings (1,147) Fair Value as of June 30, 2026 $ —
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(1) Amounts presented in parentheses reduce the carrying amount of the related derivative. Accordingly, parenthetical amounts in the derivative liabilities roll-forward represent gains included in earnings. See Note 7 for the statement of operations line items in which these gains and losses are recognized.
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The 3,076,922 shares of Class A common stock issued in the April 2026 Registered Direct Offering are classified as mezzanine equity because the holders have the right, under certain conditions, to require the Company to repurchase such shares at the offering price plus a contractual 7.0 % per annum internal rate of return. Certain triggering events that would allow holders to exercise such repurchase rights are not solely within the control of the Company.
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The redemption value of the Registered Direct Offering shares was $ 8.1 million as of June 30, 2026 which is less than the combined fair value of the associated put option derivative liability of $ 4.2 million and the carrying value of the mezzanine equity of $ 4.0 million as of June 30, 2026. Accordingly, no accretion of the mezzanine equity carrying value was required during the period.
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In June 2025, the Company completed a registered offering of common stock, pre-funded warrants and accompanying common warrants, together with warrants issued to the placement agent (collectively, the "2025 Warrants"). The common warrants contained a provision permitting holders to receive twice the number of shares issuable on a cash exercise without additional payment, and provided for exercise price resets on the fifth trading day and tenth calendar day after issuance, with a corresponding increase in the number of shares issuable such that the aggregate exercise price remained unchanged.
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Because of that provision, the common warrants did not qualify for equity classification and were recorded as a derivative liability of $ 3.4 million at issuance, measured using a Monte Carlo simulation model. Offering costs of $ 0.5 million allocated to the derivative liability were expensed. The exercise price and share resets resulted in a loss of $ 6.2 million recognized in "Change in fair value of derivative liability." Expected volatility of 99.95 % was the significant unobservable input used at issuance and at each remeasurement date; the remaining inputs were observable. The derivative liability was reclassified to equity upon exercise of the warrants during 2025 and had no fair value as of June 30, 2026.
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The aggregate gross proceeds to the Company were $ 9.1 million, before deducting placement agent fees and other expenses of $ 1.2 million and repayment of promissory notes of $ 1.56 million. Maxim Group LLC served as placement agent and received a cash fee of 7 % of gross proceeds plus reimbursement of legal fees of up to $ 100 thousand.
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On April 24, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”) pursuant to which the Company sold, in a private placement (the “2025 Private Placement”), unsecured 20 % original issue discount promissory notes with an aggregate principal amount of $ 1.56 million (the “Notes”) with a maturity date of the earlier of a) July 24, 2025, b) the closing date of the Company’s next registered offering of securities on Form S-1. The Purchase Agreement also provides for the issuance of an aggregate of 1,760 shares of common stock of the Company, par value $ 0.001 per share (the “Private Placement Shares”) to the Purchasers. The transaction closed on April 25, 2025.
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Maxim Group LLC served as the placement agent in the 2025 Private Placement, pursuant to the terms of a placement agency agreement and received 7 % of the gross proceeds of the Offering and reimbursement of the legal fees of its counsel of up to $ 15 thousand.
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The Company may issue stock-based compensation awards under the Company’s 2022 Equity Incentive Plan (as amended, the “2022 Plan”) or the Company’s 2021 Inducement Plan (as amended, the “Inducement Plan”), as described more fully in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 31, 2026.
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As of June 30, 2026, the remaining shares available for grant were 10,669,709 under the 2022 Plan and 192 under the Inducement Plan. During the six months ended June 30, 2026, the Company granted 168,372 stock options out of the 2022 Plan and no stock options out of the Inducement Plan. The options vest over one to three years and expire ten years after the grant date. A total of 847 stock options were granted under the 2022 Plan during the six months ended June 30, 2025.
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The grant date fair values of the stock options were estimated using the Black-Scholes option pricing model using the following weighted average assumptions:
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The following table summarizes restricted stock unit ("RSU') activity during the six months ended June 30, 2026:
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In connection with the 2025 PIPE Offerings, the Company entered into the Strategic Advisory Agreement with Pantera and Summer. Under the terms of the agreement, the Advisors will provide strategic advisory services in connection with the expansion and diversification of the Company’s core business through integration of cryptocurrency and digital asset strategies in its product offerings and as part of its SOL treasury management strategy for two years. As consideration for these services, Pantera and Summer received the Advisor Warrants to purchase shares of the Company’s Class A common stock as discussed in more detail in Note 9.
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During the three and six months ended June 30, 2026, the Company recognized pass-through expenses from Summer of $ 51 thousand and $ 57 thousand, respectively, which is permissible under the Strategic Advisory Agreement and is classified under selling, general and administrative operating expense in the statement of operations. As of June 30, 2026, there were no amounts payable to Summer related to the Strategic Advisory Agreement.
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In connection with the 2025 PIPE Offerings, the Company entered into a Trading Advisory Agreement (the “Trading Advisory Agreement”) with Pantera, pursuant to which the Company engaged Pantera to manage the investment of substantially all of Company’s digital assets, digital asset derivatives, cash and other assets for an initial term of ten ( 10 ) years, which term automatically renews for successive periods of one ( 1 ) year each, subject to the mutual agreement of the Company and Pantera. The management fees pursuant to the Trading Advisory Agreement shall be equal to: (a) 1.0 %, if the Client’s Assets Under Management is less than or equal to $ 1 billion, (b) 0.75 % per annum of assets under management (“AUM”) if AUM is more than $ 1 billion but less than or equal to $ 5 billion and (c) 0.50 % per annum of AUM if AUM is more than $ 5 billion.
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During the three and six months ended June 30, 2026, the Company recognized $ 0.5 million and $ 1.1 million, respectively, in trading advisory fees in connection with the Trading Advisory Agreement for the management fee for Company AUM by Pantera and is classified under selling, general and administrative operating expense in the statement of operations. As of June 30, 2026, the Company has a balance of $ 0.1 million in accounts payable due to Pantera under the Trading Advisory Agreement.
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The Company continues to assess the realizability of its deferred tax assets at each reporting date. Based on the weight of available evidence, management concluded that it is not more likely than not that the Company’s net deferred tax assets will be realized and, accordingly, the Company continues to maintain a full valuation allowance as of June 30, 2026.
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On March 17, 2026, Solana Company (Hong Kong) Limited entered into a share purchase agreement to acquire, directly or indirectly, all of the issued share capital of a Hong Kong trust company. The acquisition closed on July 15, 2026. The total purchase price for the acquisition was $ 2 million, consisting of 50 % payable in cash, $ 0.5 million of which was paid as a deposit during the second quarter of 2026 and the remaining $ 0.5 million was paid in July 2026, and 50 % equity consideration, pursuant to which 597,086 shares of our Class A common stock were issued to the Sellers.
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Subsequent to June 30, 2026, pursuant to the Company’s Stock Repurchase Program, see Note 9, the Company repurchased 488,575 shares of its Class A common stock at a weighted-average purchase price of $ 1.77 per share. The Company also repurchased, in a private transaction, 226,172 of its Class A common stock at a price of $ 1.64 per share.
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We launched our own SOL validator cluster in July 2026. As of the date of this Form 10-Q, external parties have delegated 0.5 million SOL to stake on our cluster.
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On March 17, 2026, Solana Company (Hong Kong) Limited entered into a share purchase agreement to acquire, directly or indirectly, all of the issued share capital of a Hong Kong trust company. The acquisition closed on July 15, 2026. The total purchase price for the acquisition was $ 2 million, consisting of 50 % payable in cash, $0.5 million of which was paid as a deposit during the second quarter of 2026 and the remaining $0.5 million paid in July 2026, and 50 % equity consideration, pursuant to which 597,086 shares of our Class A common stock were issued to the Sellers.
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Loss on digital asset derivatives was $0.7 million in the second quarter of 2026, compared to none in the prior-year period, reflecting net premiums and fair value changes on the written SOL put option contracts and SOL call option spread positions entered into under the Company's OTC SOL options strategy, which commenced during the second quarter of 2026.
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The change in fair value of derivative liabilities was a loss of $0.3 million for the three months ended June 30, 2026, compared with a loss of $6.0 million for the same period in 2025. The decrease was primarily attributable to the reclassification to equity of the derivative warrant liabilities from our 2022 public offering and our June 2025 public offering upon exercise in the second quarter of 2025. As a result, the put option issued in connection with the Registered Direct Offering was the only derivative liability recorded in this caption during the second quarter of 2026.
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Gain on sale of business was $3.1 million in the second quarter of 2026, compared to none in the prior-year period, relating entirely to the PoNS Asset Sale that closed on April 8, 2026.
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Financing costs were $0.1 million in the second quarter of 2026, compared to $0.4 million in the prior-year period. The decrease was primarily attributable to the absence of non-cash costs recognized in the prior-year period in connection with the January 2025 warrant inducement and related note financing.
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Loss on digital asset derivatives was $0.7 million in the first half of 2026, compared to none in the prior-year period, reflecting net premiums and fair value changes on the written SOL put option contracts and SOL call option spread positions entered into under the Company's OTC SOL options strategy, which commenced during the second quarter of 2026.
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The change in fair value of derivative liabilities was a loss of $0.3 million in the first half of 2026, compared with a loss of $5.9 million for the same period in 2025. The decrease was primarily attributable to the reclassification to equity of the derivative warrant liabilities from our 2022 public offering and our June 2025 public offering upon exercise in the first half of 2025. As a result, the put option issued in connection with the Registered Direct Offering was the only derivative liability recorded in this caption for the six months ended June 30, 2026.
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Gain on sale of business was $3.1 million in the first half of 2026, compared to none in the prior-year period, relating entirely to the PoNS Asset Sale that closed on April 8, 2026.
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Financing costs were $0.1 million in the first half of 2026, compared to $0.4 million in the prior-year period. The decrease was primarily attributable to the absence of non-cash costs recognized in the prior-year period in connection with the January 2025 warrant inducement and related note financing.
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In connection with the Registered Direct Offering in April 2026, we entered into put option agreements with the purchasers, which we have recorded as a derivative liability of $4.2 million as of June 30, 2026. These put options represent a contingent cash obligation if exercised and may affect our future liquidity.
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Net cash provided by investing activities was $10.9 million for the six months ended June 30, 2026, compared to nil for the same period in the prior year. The primary sources of cash were $13.3 million in proceeds from the sale of digital assets, $4.2 million in net proceeds from the PoNS Asset Sale, and $1.1 million in proceeds from premiums on digital asset derivative contracts, partially offset by $5.5 million in digital asset purchases and $1.5 million in payments for digital asset derivative contract settlements, $0.5 million for deposit on acquisition of a business and 0.2 million net posted collateral.
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We have issued and may continue to issue financial instruments that require us to account for such instruments in accordance with Accounting Standard Codification (“ASC”) 480 Distinguishing Liabilities from Equity and/or ASC 815 Derivatives and Hedging. If determined to be classified as an asset or a liability, we will remeasure the fair value of the financial instruments at each balance sheet date. If the financial instruments are determined to be classified as equity, the
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fair value of the instruments will be measured as of the date of issuance and will not be subject to remeasurement at each balance sheet date.
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We use the lattice and Black-Scholes option-pricing models to value derivative financial instrument liabilities. These models use Level 3 inputs in the fair value hierarchy established by ASC 820 - Fair Value Measurement.
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Risk Factors
We operate a Solana validator, which may significantly impact our reported revenues and increase our compliance costs.
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We currently earn rewards from the Solana network through staking of our SOL and operating a validator. Our validator operations may result in a significant impact in our reported revenues as a result of applying revenue recognition guidance to the validator resulting in us recognizing staking rewards earned through our validator operations on a gross basis. The change in reported revenues may impact our annual revenues and our ability to qualify as a Smaller Reporting Company ("SRC") in the future. If we were to no longer qualify as an SRC, we may be subject to increased compliance costs associated with Sarbanes-Oxley Act Section 404(b).
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Our validator operations on the Solana network are subject to significant operational, technological, economic, reputational and regulatory risks, and any disruption, underperformance or adverse development affecting our validator or the Solana network could reduce or eliminate our staking rewards and adversely affect our business, financial condition and results of operations.
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In addition to the revenue recognition considerations described above, we earn rewards on the Solana network by operating a validator and staking SOL. A validator is a node that participates in the Solana network’s proof-of-stake consensus by voting on the state of the network and, when selected as a leader, producing blocks. Our rewards are derived from newly issued (inflationary) SOL, a share of network transaction and priority fees and, to the extent we operate the applicable software, maximal extractable value ("MEV") rewards. The amount of rewards we earn depends on the total amount of SOL staked to our validator (including both SOL we own and any SOL delegated to us by third parties), the commission rates we charge, our validator’s performance and uptime, the overall level of network activity, and protocol-level parameters that are outside our control. Because a substantial portion of the costs of operating a validator - including SOL-denominated vote transaction costs and high-performance hardware, bandwidth and personnel costs - are fixed and are incurred regardless of the rewards we earn, a decline in rewards, in the price of SOL, or in the amount of SOL staked to our validator could cause our validator operations to become unprofitable.
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Operational risks. Our ability to earn rewards depends on operating our validator reliably and continuously. If our validator experiences downtime, becomes "delinquent" (for example, by failing to vote or to remain sufficiently current with the network), misses assigned leader slots, produces blocks late or empty, or otherwise underperforms relative to other validators, we will earn fewer or no rewards for the affected periods, and any delegators whose stake is delegated to us will likewise earn reduced rewards, which may cause them to move their stake to other validators. Validator performance is commonly measured by metrics such as vote credits, skip rate and uptime, and underperformance on these metrics can reduce both our rewards and our eligibility for delegated stake, including stake delegated through the Solana Foundation Delegation Program (the "SFDP") or similar programs, while our fixed operating costs continue to accrue. Substantially all of our validator rewards depend on the operation of a single validator identity, and although we maintain redundant infrastructure intended to reduce downtime, a failure affecting that validator could disrupt those rewards until service is restored.
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Technological and software risks. We rely on validator client software developed and maintained by third parties (currently the Jito-Solana client, a distribution of the Agave validator client that incorporates maximal extractable value ("MEV") functionality, and we may in the future use or evaluate other clients such as Firedancer) and on our ability to configure, monitor, upgrade and operate that software correctly. Software bugs, defects, security vulnerabilities, incompatibilities, failed or delayed upgrades, or errors in our own operational practices could cause our validator to go offline, to vote incorrectly, to produce invalid or duplicate blocks, or to fall out of consensus, any of which could result in lost rewards and, if protocol-level penalties are adopted in the future (as described below), a potential loss of staked SOL. Concentration of the network on a limited number of software clients also creates the risk that a defect in a widely used client could cause a network-wide disruption that affects our validator.
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Cybersecurity and private key management risks. Operating a validator requires us to generate, secure and use cryptographic private keys, including our validator identity key and the authorities associated with our vote and stake accounts. If these keys are lost, stolen, or otherwise compromised, or if our systems are subject to unauthorized access, an attacker could misappropriate our SOL or staking rewards, cause our validator to sign conflicting or malicious messages (which could expose us to any future slashing penalties), or disrupt our operations. Any failure of our cybersecurity, key management or operational security controls could result in significant losses and reputational harm.
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Third-party infrastructure and custody dependencies. We depend on third-party data centers, colocation and hosting providers, hardware suppliers, bandwidth and internet service providers, and, with respect to a portion of our SOL, third-party custodians and staking or infrastructure providers. We do not control these third parties, and their failure, insolvency, service interruption, price increases, or termination of services, or any breach or failure of their systems or controls, could impair our ability to operate our validator, cause us to miss rewards, or result in the loss of, or inability to access, our SOL. We depend on validator infrastructure located in a single metropolitan area, and a localized outage, natural disaster, power or network disruption, or adverse regulatory or legal development affecting that location could impair or halt our ability to operate our validator.
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Network congestion and outages. The Solana network has in the past experienced, and may in the future experience, periods of congestion, degraded performance, and full or partial network outages. During any such event, our validator may be unable to vote or produce blocks, we may earn no rewards for the affected period, the market price of SOL may decline, and confidence in the Solana network, and in validators operating on it, including us, may be harmed.
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Protocol changes and governance. The Solana network is subject to change through a community-driven, stake-weighted governance process. In July 2026, the Solana community ratified a governance framework (referred to as the Solana Constitution and adopted as SGP-0001) that formalizes how network-level decisions are made, including through Solana Improvement Documents ("SIMDs"), which address technical specifications, and Solana Governance Proposals ("SGPs"), which capture stake-weighted directional decisions. SGPs may be advanced to an on-chain vote by validators representing a specified percentage of active stake and ratified by a supermajority of the stake that participates. Under this framework, changes to the protocol - such as reductions in the network’s inflation or "disinflation" schedule, changes to how transaction or priority fees are allocated or burned, the adoption of slashing or other validator penalties, changes to consensus or voting mechanics (including transitions to new consensus designs), or increases in the hardware, bandwidth, minimum-stake or other requirements to operate a validator - could be adopted and become binding on us, and could reduce the rate of staking rewards we earn, increase our costs, or make it more difficult or uneconomic for us to operate our validator. As a validator, we may cast governance votes, including with respect to SOL delegated to us (subject to the rights of delegators to override our vote), but our voting power reflects only the stake associated with our validator, and we have limited ability to influence, and no ability to control, whether or how the Solana protocol changes.
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Slashing and validator penalties. The Solana protocol does not currently impose automatic, protocol-enforced "slashing" penalties that confiscate a validator’s or its delegators’ staked SOL for downtime, delinquency, or other misbehavior; historically, the network has instead relied on informal, community-driven ("social") responses to serious validator misconduct. As a result, the principal consequences of validator downtime, delinquency or underperformance today are missed or reduced staking rewards, reduced commission revenue, reduced vote credits, and the potential loss of delegated stake, rather than the direct forfeiture of our SOL. However, proposals to introduce protocol-level slashing are under active consideration within the Solana community (including SIMD-0204, which would establish on-chain recording of slashable events, and SIMD-0212, which would introduce economic penalties) and would, if adopted through Solana’s governance process, initially focus on offenses such as duplicate block production and could later extend to voting violations. If protocol-level slashing or similar penalties are adopted in the future, a portion of the SOL we stake, and any SOL delegated to us, could be forfeited as a result of validator downtime, software or operational errors, key compromise, or other events, some of which may be outside our control, which could result in direct financial loss to us and to our delegators and could harm our reputation and ability to attract or retain delegated stake.
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Dependence on delegated stake; commission and fee pressure. A meaningful portion of the total stake supporting our validator’s economics may consist of SOL delegated to us by third parties, including stake delegated through the SFDP. Our ability to attract and retain delegated stake depends on factors such as our validator’s performance and uptime, the commission rates we charge, our reputation, the manner in which we exercise any governance voting rights associated with delegated stake, and our continued eligibility for delegation programs, which impose ongoing requirements (such as minimum performance levels, commission caps and decentralization criteria) that we may fail to satisfy and that may change over time. The Solana validator market is competitive, and validators compete in part on the basis of commission rates, which has created downward pressure on commissions. If we are unable to attract or retain sufficient delegated stake, if delegation programs reduce, condition or discontinue their support, or if competitive dynamics require us to reduce our commissions, our staking rewards and the profitability of our validator operations could decline, particularly given the fixed nature of our operating costs.
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Reputational risks. Our validator operations expose us to reputational risk. Validator downtime, underperformance, security incidents, missed rewards, or a perception that our validator is unreliable or poorly managed could damage our reputation within the Solana ecosystem and impair our ability to attract and retain delegated stake, which in turn could reduce our rewards and adversely affect our results of operations.
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Regulatory risks. The regulatory treatment of staking and validator services is evolving and uncertain. U.S. and non-U.S. regulators have in the past scrutinized, and may in the future scrutinize, staking, staking-as-a-service, and related activities, including under securities, commodities, money transmission, tax, and other laws. New or changed laws, regulations, guidance, or enforcement or judicial actions could restrict or prohibit our validator or staking activities, subject us to registration, licensing, disclosure, or compliance obligations, increase our costs, create liability (including with respect to stake delegated to us by third parties), or otherwise adversely affect our ability to operate our validator or the value of SOL.
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Any of the foregoing risks, individually or in combination, and any related decline in the market price of SOL, could reduce or eliminate our staking rewards, cause our validator operations to become unprofitable, require us to curtail or cease operating our validator, and materially and adversely affect our business, financial condition, results of operations, and the trading price of our Class A common stock.
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Item 6
3.1 Certificate of Conversion filed with the Delaware Secretary of State on July 18, 2018 (incorporated by reference to Exhibit 3.1 to the Form 10-Q filed August 9, 2018)
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3.2 Certificate of Incorporation, as corrected (incorporated by reference to Exhibit 3.1 to the Form 8-K filed October 30, 2018)
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3.3 Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on December 31, 2020)
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3.4 Certificate of Amendment to Certificate of Incorporation, as corrected (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on August 16, 2023)
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3.5 Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on April 30, 2025)
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3.6 Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on June 27, 2025)
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3.7 Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K filed September 18, 2025)
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3.8 Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on September 29, 2025)
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3.9 Third Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Form 8-K filed on September 29, 2025)
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4.1 Form of Securities Purchase Agreement, by and among Solana Company and the Purchasers, dated April 27, 2026 (incorporated by reference to Exhibit 4.1 to the Form 8-K filed on April 27, 2026)
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4.2 Form of Put Option Agreement, by and among Solana Company and the Purchasers, dated April 27, 2026. (incorporated by reference to Exhibit 4.2 to the Form 8-K filed on April 27, 2026)
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10.1† Offer Letter, dated as of March 13, 2026, by and between Solana Company and Agustina Gani Tjandrasuwita (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on April 9, 2026)
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10.2† Separation Agreement, dated as of April 8, 2026, by and between Solana Company and Antonella Favit-Van Pelt (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on April 13, 2026)
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10.3† Separation Agreement, dated as of May 12, 2026, by and between Solana Company and Dane C. Andreeff (incorporated by reference to Exhibit 10.3 to the Form 10-Q filed on May 15, 2026)
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10.4† Separation Agreement, dated as of May 12, 2026, by and between Solana Company and Jeffrey Mathiesen (incorporated by reference to Exhibit 10.4 to the Form 10-Q filed on May 15, 2026)
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10.5 Amended and Restated Sales Agreement, by and among Solana Company, Clear Street LLC and Maxim Group LLC, dated May 29, 2026 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on May 29, 2026)
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31.1# Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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31.2# Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1#* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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32.2#* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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104# Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
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The 10-Q's risk factors against the 10-K
Item 1A of the 10-Q filed Aug 14, 2026 against Item 1A of the 10-K filed Mar 31, 2026.
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.
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Below we are providing, in supplemental form, updates to our risk factors from those previously disclosed in Part I, Item 1A, “Risk Factors” of our 2025 Annual Report. Our risk factors disclosed in Part I, Item 1A of our 2025 Annual Report provide additional discussion regarding these supplemental risks and we encourage you to read and carefully consider all of the risk factors disclosed in Part I, Item 1A of our 2025 Annual Report, together with the below, for a more complete understanding of the risks and uncertainties material to our business. Except as set forth below, during the three months ended June 30, 2026, our risk factors have not changed materially from those risk factors previously disclosed in our 2025 10-K. In April 2026, we sold the assets related to our PoNS business, as discussed in more detail in Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q. Following such sale, we no longer view the risks and uncertainties disclosed in our 2025 10-K related to the PoNS business as material to our business.
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Added10-Q 2026-08-14 vs 10-K 2026-03-31
We operate a Solana validator, which may significantly impact our reported revenues and increase our compliance costs.
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Added10-Q 2026-08-14 vs 10-K 2026-03-31
We currently earn rewards from the Solana network through staking of our SOL and operating a validator. Our validator operations may result in a significant impact in our reported revenues as a result of applying revenue recognition guidance to the validator resulting in us recognizing staking rewards earned through our validator operations on a gross basis. The change in reported revenues may impact our annual revenues and our ability to qualify as a Smaller Reporting Company ("SRC") in the future. If we were to no longer qualify as an SRC, we may be subject to increased compliance costs associated with Sarbanes-Oxley Act Section 404(b).
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Our validator operations on the Solana network are subject to significant operational, technological, economic, reputational and regulatory risks, and any disruption, underperformance or adverse development affecting our validator or the Solana network could reduce or eliminate our staking rewards and adversely affect our business, financial condition and results of operations.
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
In addition to the revenue recognition considerations described above, we earn rewards on the Solana network by operating a validator and staking SOL. A validator is a node that participates in the Solana network’s proof-of-stake consensus by voting on the state of the network and, when selected as a leader, producing blocks. Our rewards are derived from newly issued (inflationary) SOL, a share of network transaction and priority fees and, to the extent we operate the applicable software, maximal extractable value ("MEV") rewards. The amount of rewards we earn depends on the total amount of SOL staked to our validator (including both SOL we own and any SOL delegated to us by third parties), the commission rates we charge, our validator’s performance and uptime, the overall level of network activity, and protocol-level parameters that are outside our control. Because a substantial portion of the costs of operating a validator - including SOL-denominated vote transaction costs and high-performance hardware, bandwidth and personnel costs - are fixed and are incurred regardless of the rewards we earn, a decline in rewards, in the price of SOL, or in the amount of SOL staked to our validator could cause our validator operations to become unprofitable.
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Operational risks. Our ability to earn rewards depends on operating our validator reliably and continuously. If our validator experiences downtime, becomes "delinquent" (for example, by failing to vote or to remain sufficiently current with the network), misses assigned leader slots, produces blocks late or empty, or otherwise underperforms relative to other validators, we will earn fewer or no rewards for the affected periods, and any delegators whose stake is delegated to us will likewise earn reduced rewards, which may cause them to move their stake to other validators. Validator performance is commonly measured by metrics such as vote credits, skip rate and uptime, and underperformance on these metrics can reduce both our rewards and our eligibility for delegated stake, including stake delegated through the Solana Foundation Delegation Program (the "SFDP") or similar programs, while our fixed operating costs continue to accrue. Substantially all of our validator rewards depend on the operation of a single validator identity, and although we maintain redundant infrastructure intended to reduce downtime, a failure affecting that validator could disrupt those rewards until service is restored.
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Technological and software risks. We rely on validator client software developed and maintained by third parties (currently the Jito-Solana client, a distribution of the Agave validator client that incorporates maximal extractable value ("MEV") functionality, and we may in the future use or evaluate other clients such as Firedancer) and on our ability to configure, monitor, upgrade and operate that software correctly. Software bugs, defects, security vulnerabilities, incompatibilities, failed or delayed upgrades, or errors in our own operational practices could cause our validator to go offline, to vote incorrectly, to produce invalid or duplicate blocks, or to fall out of consensus, any of which could result in lost rewards and, if protocol-level penalties are adopted in the future (as described below), a potential loss of staked SOL. Concentration of the network on a limited number of software clients also creates the risk that a defect in a widely used client could cause a network-wide disruption that affects our validator.
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Cybersecurity and private key management risks. Operating a validator requires us to generate, secure and use cryptographic private keys, including our validator identity key and the authorities associated with our vote and stake accounts. If these keys are lost, stolen, or otherwise compromised, or if our systems are subject to unauthorized access, an attacker could misappropriate our SOL or staking rewards, cause our validator to sign conflicting or malicious messages (which could expose us to any future slashing penalties), or disrupt our operations. Any failure of our cybersecurity, key management or operational security controls could result in significant losses and reputational harm.
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Third-party infrastructure and custody dependencies. We depend on third-party data centers, colocation and hosting providers, hardware suppliers, bandwidth and internet service providers, and, with respect to a portion of our SOL, third-party custodians and staking or infrastructure providers. We do not control these third parties, and their failure, insolvency, service interruption, price increases, or termination of services, or any breach or failure of their systems or controls, could impair our ability to operate our validator, cause us to miss rewards, or result in the loss of, or inability to access, our SOL. We depend on validator infrastructure located in a single metropolitan area, and a localized outage, natural disaster, power or network disruption, or adverse regulatory or legal development affecting that location could impair or halt our ability to operate our validator.
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Network congestion and outages. The Solana network has in the past experienced, and may in the future experience, periods of congestion, degraded performance, and full or partial network outages. During any such event, our validator may be unable to vote or produce blocks, we may earn no rewards for the affected period, the market price of SOL may decline, and confidence in the Solana network, and in validators operating on it, including us, may be harmed.
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Protocol changes and governance. The Solana network is subject to change through a community-driven, stake-weighted governance process. In July 2026, the Solana community ratified a governance framework (referred to as the Solana Constitution and adopted as SGP-0001) that formalizes how network-level decisions are made, including through Solana Improvement Documents ("SIMDs"), which address technical specifications, and Solana Governance Proposals ("SGPs"), which capture stake-weighted directional decisions. SGPs may be advanced to an on-chain vote by validators representing a specified percentage of active stake and ratified by a supermajority of the stake that participates. Under this framework, changes to the protocol - such as reductions in the network’s inflation or "disinflation" schedule, changes to how transaction or priority fees are allocated or burned, the adoption of slashing or other validator penalties, changes to consensus or voting mechanics (including transitions to new consensus designs), or increases in the hardware, bandwidth, minimum-stake or other requirements to operate a validator - could be adopted and become binding on us, and could reduce the rate of staking rewards we earn, increase our costs, or make it more difficult or uneconomic for us to operate our validator. As a validator, we may cast governance votes, including with respect to SOL delegated to us (subject to the rights of delegators to override our vote), but our voting power reflects only the stake associated with our validator, and we have limited ability to influence, and no ability to control, whether or how the Solana protocol changes.
Read it in the 10-Q at sec.gov ↗
Added10-Q 2026-08-14 vs 10-K 2026-03-31
Slashing and validator penalties. The Solana protocol does not currently impose automatic, protocol-enforced "slashing" penalties that confiscate a validator’s or its delegators’ staked SOL for downtime, delinquency, or other misbehavior; historically, the network has instead relied on informal, community-driven ("social") responses to serious validator misconduct. As a result, the principal consequences of validator downtime, delinquency or underperformance today are missed or reduced staking rewards, reduced commission revenue, reduced vote credits, and the potential loss of delegated stake, rather than the direct forfeiture of our SOL. However, proposals to introduce protocol-level slashing are under active consideration within the Solana community (including SIMD-0204, which would establish on-chain recording of slashable events, and SIMD-0212, which would introduce economic penalties) and would, if adopted through Solana’s governance process, initially focus on offenses such as duplicate block production and could later extend to voting violations. If protocol-level slashing or similar penalties are adopted in the future, a portion of the SOL we stake, and any SOL delegated to us, could be forfeited as a result of validator downtime, software or operational errors, key compromise, or other events, some of which may be outside our control, which could result in direct financial loss to us and to our delegators and could harm our reputation and ability to attract or retain delegated stake.
Read it in the 10-Q at sec.gov ↗
The first 12 of 16 are shown (at most 12 of each type).
