LITSLite Strategy
Lite Strategy, Inc. (Nasdaq: LITS) is a pharmaceutical company that has historically developed novel and differentiated cancer therapies. 10-K, Item 1
- Headquarters
- San Diego, CA
- CEO
- Justin J. File
- Next results
- around Feb 16, 2027
4 paragraphs in Risk Factors of the 10-K filed Sep 28, 2026 with nothing like them in the 10-K filed Sep 26, 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.
We intend to monitor our assets and income in order to conduct our business activities in a manner such that we do not fall within the definition of “investment company” under the 1940 Act or would qualify under one of the exemptions or exclusions
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adequate preventative measures. Further, there has been an increase in such activities due to the increase in work-from-home arrangements. The risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential proliferation of malware into systems unrelated to such conflicts. Any future breach of our operations or those of others in the Litecoin industry, including third-party services on which we rely, could materially and adversely affect our financial condition and results of operations.
Similar paragraph at 1 of 31 other Crypto companies: DFDVRead in the 10-K ↗
We expect to continue to incur operating and net losses, as we develop and seek development and/or commercial relationships with other partners for our drug candidates. In addition, because we hold LTC as a primary reserve asset, fluctuations in the market price of LTC, including declines below our acquisition costs, may materially affect our financial condition and results of operations and could increase or contribute to our net losses. The market price of LTC has historically been volatile, and we cannot predict future LTC prices or the effect that changes in the value of our LTC holdings may have on our financial results.
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We may incorporate the use of AI into our business, operations and offerings in ways which present opportunities as well as challenges and risks, particularly as AI can produce hallucinations and AI agents may take undesired actions, if used.AI systems or input data issues could present inaccurate information, privacy, reputational and other issues and liability. A number of jurisdictions have implemented (or will implement) AI-related laws which may adversely effect our business. For example, the EU AI Act, which has extra-territorial effect like the GDPR, imposes penalties up to the greater of: (i) €35 million; or (ii) 7% of an entire group's total annual worldwide turnover.
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New in the latest 10-Q
33 paragraphs in the 10-Q filed Nov 5, 2026 with nothing like them in the 10-Q filed May 13, 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.
Financial statements and notes
receivable, net Loss on derivative liabilities, net (1,172) — Change in fair value of SAFE and Token Warrants 44 — Interest and dividend income 36 100 Total other income, net 1,502 100 Net income (loss) $ 16,023 $ (3,639) Net income (loss) per share: Basic $ 0.48 $ (0.12) Diluted $ 0.48 $ (0.12) Weighted-average shares used in computing net income (loss) per share: Basic 33,169 29,475 Diluted 33,179 29,475
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We are subject to various risks including market risk, liquidity risk, and other risks related to our concentration in a single asset, LTC. Investing in LTC is highly speculative and volatile.
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Our investment in the SAFE provides us with the right to participate in future equity financings of a private company and token warrants provide us with the right to purchase two percent of the total network tokens developed (Token Warrants) (the SAFE and Token Warrants are herein referred to as the SAFE Investment). We accounted for the SAFE Investment under ASC 321, Investments - Equity Securities. The SAFE Investment contains multiple settlement provisions which could require bifurcation under ASC 815, Derivatives and Hedging (ASC 815). Rather than separately value each settlement provision, we elected the fair value option for the SAFE Investment under ASC 825, Financial Instruments, which requires financial instruments to be remeasured to fair value each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations. The fair value estimate includes significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
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Warrants Shares used in calculating diluted net income (loss) per share 33,179 29,475
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Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities.
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Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
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Level 3 - Unobservable inputs that are supported by little or no market activities and that are significant to the fair value of the assets or liabilities.
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Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. We review the fair value hierarchy classification at each reporting period. As of September 30, 2026 and June 30, 2026, we had no financial assets or liabilities measured at fair value on a nonrecurring basis.
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basis During the three months ended September 30, 2025, we did not have any financial assets measured at fair value using Level 3 significant unobservable inputs. The following tables provide a reconciliation of all financial assets measured at fair value, during the three months ended September 30, 2026, using Level 3 significant unobservable inputs (in thousands): Level 3 Assets SAFE Token Warrants Balance as of June 30, 2026 $ 400 $600 Change in fair value on derivative instruments 44 - Balance as of September 30, 2026 $ 444 $600
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The following table presents the change in carrying amount of our digital assets (in thousands): Three Months Ended September 30, 2026 2025 Balance beginning of period $ 27,272 $ - ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Purchases of digital assets 7,913 100,000 Change in fair value of digital assets: Realized loss on sale of digital assets (1,443) - Realized loss upon transfer of digital assets as collateral (4,190) - Unrealized gain (loss) on digital assets 22,531 (631) Digital assets transferred as collateral (4,903) - Disposition of digital assets (1,000) - Balance end of period $ 46,180 $ 99,369
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During the three months ended September 30, 2025, we recorded employee termination benefits of $0.1 million within general and administrative expense.
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11. Stockholders’ Equity Description of Capital Stock Our total authorized share capital is 226,100,000 shares consisting of 226,000,000 shares of common stock and 100,000 shares of preferred stock, $0.01 par value per share.
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On February 20, 2024, we entered into a capital on demand sales agreement (On Demand Sales Agreement) with JonesTrading Institution Services LLC, pursuant to which we could offer and sell shares having an aggregate offering price of up to $25.0 million. We did not offer or sell any shares of common stock under the On Demand Sales Agreement. Effective July 21, 2025, we terminated the On Demand Sales Agreement.
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On July 22, 2025, we entered a Sales Agreement with Titan Partners Group LLC, a division of American Capital Partners LLC (in such capacity, the Agent), pursuant to which we may sell, from time to time, at our option, up to $100.0 million in aggregate principal amount of an indeterminate amount of shares (the ATM Shares) of common stock, through the Agent (ATM Program). We will pay the Agent a commission of 3.5% of the gross sales price of the ATM Shares sold pursuant to the Sales Agreement.
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Any ATM Shares to be offered and sold under the Sales Agreement will be issued and sold (i) by methods deemed to be an at-the-market offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, if authorized by us and (ii) pursuant to the February 2024 Shelf Registration Statement as supplemented by a prospectus supplement, filed with the SEC on July 23, 2025.
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During fiscal year 2026, 882,924 shares of our common stock have been issued and sold under our ATM Program for aggregate net proceeds of $4.6 million. No shares have been issued or sold under our ATM Program during fiscal year 2027 thus far.
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The cooperation agreement, dated as of October 31, 2023, with Anson Funds Management LP and Cable Car Capital LLC (the Cooperation Agreement) among other nonfinancial items, provided for a capital return to stockholders in the form of a dividend in the amount of $1.75 per share of common stock that was declared on November 6, 2023, to stockholders of record at the close of business on November 17, 2023. The total dividend of $11.7 million was paid on December 6, 2023, and was recorded as a reduction of additional paid-in capital in the condensed consolidated statements of stockholders' equity, as we have an accumulated deficit, rather than retained earnings. Effective July 22, 2025, in conjunction with the closing of the Offering, the parties to the Cooperation Agreement mutually agreed to terminate the Cooperation Agreement.
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Warrants issued in the Offering are exercised in full. Each holder of the Pre-Funded Warrant's ability to exercise its Pre-Funded Warrants in exchange for shares of common stock was subject to certain beneficial ownership limitations set forth therein. On July 24, 2025, Pre-Funded Warrants for the purchase of 2,084,509 shares of common stock were exercised for a de minimis amount of cash proceeds. During fiscal year 2026, we issued 3,938,209 shares of common stock upon cashless exercises of 3,938,360 Pre-Funded Warrants at which time all Pre-Funded Warrants issued in the PIPE were fully exercised.
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The following Pre-Funded Warrants were issued to GSR as settlement of the Asset-based Fee (in millions, except number of warrants issued):
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The following GD Advisory Fee Warrants were issued to Green Dragon as settlement of the Annual Advisory Fee (in millions, except except number of warrants issued):
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lieu of cash: Year 1(1) 234,149 $0.8 $ - $ 0.2 Year 2(2) 566,721 $0.5 $ 0.1 $ - ________ (1) These warrants were exercised on October 29, 2026, see Note 15. Subsequent Events for additional information. (2) The vested portion of this warrant was exercised on October 29, 2026, see Note 15. Subsequent Events for additional information. Other Warrants As of September 30, 2026, we have a warrant to purchase 102,513 shares of our common stock issued to Torreya Partners LLC. The warrant is fully vested, exercisable at a price of $6.80 per share and expires in October 2027. No warrants were exercised as of September 30, 2026.
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assets receivable, net Loss on derivative liabilities, net 1,172 - 1,172 - 1,172 Change in fair value of SAFE and (44) - (44) - (44)
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Token Warrants Interest and dividend income(2) - - - (36) (36) Total operating (income) expense and (17,513) 64 (17,449) 1,426 (16,023)
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(2) Interest and dividend income are solely attributable to our cash and cash equivalents.
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(2) Interest and dividend income are solely attributable to our cash and cash equivalents.
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- Covered Call Options) The following table summarizes our activities with such affiliates of our Board during the three months ended September 30, 2026 and 2025 (in thousands): For the Three Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────── General and administrative expense recognized $516 $ 473 Change in fair value of digital assets $2,594 $ -
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Stock Buy Back Program During October 2026, we repurchased 825,181 shares of our common stock at a weighted-average purchase price (excluding excise tax) of $1.27 per share.
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Our drug candidate pipeline includes voruciclib, an oral CDK9 inhibitor and zandelisib, an oral, selective PI3Kδ inhibitor.
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We are currently evaluating voruciclib in a pre-clinical development program for nononcologic diseases and commenced these activities in the second quarter of fiscal year 2026. Preliminary ex vivo study results showed modulation of immune cell subsets, which support further development in animal models.
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Change in fair value of digital assets increased by $17.5 million to a gain of $16.9 million for the three months ended September 30, 2026, compared to a loss of $0.6 million for the three months ended September 30, 2025.
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(1) For the three months ended September 30, 2026, the gain was primarily attributable to an approximate 60% increase in the price of LTC.
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As more fully described in Note 8. Derivatives, we invested in a SAFE and Token Warrants during the fiscal quarter ended June 30, 2026. The fair value of the SAFE and Token Warrants is determined in accordance with ASC 820 Fair Value Measurement (ASC 820) and includes significant unobservable inputs. The significant assumptions used in the valuation include the estimated value of the underlying network tokens, the probability of a dissolution event, the relative probabilities assigned to potential non-dissolution outcomes, and the implied volatility utilized in valuing the Token Warrant. Changes in these assumptions could result in an increase or decrease in the estimated fair value of the SAFE and Token Warrants. The most impactful of the unobservable inputs are the network token valuation and the probability of dissolution.
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Share sales and buybacks
(2) Average price paid includes costs associated with the repurchases, excluding the 1% excise tax as a result of the Inflation Reduction Act of 2022.
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The 10-Q's risk factors against the 10-K
Item 1A of the 10-Q filed Nov 5, 2026 against Item 1A of the 10-K filed Sep 28, 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.
What the 10-Q itself says about its risk factors:
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There have been no material changes in our risk factors from those included in our 2026 Annual Report.
1 paragraph in the 10-Q's Item 1A, and none of them adds, rewords or quietly edits a paragraph of the 10-K's.
Work on LITS in a spreadsheet:
Excel workbook (a sheet per section, ten years by column, charts, links to the filings) ·
CSV.
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