Crypto assets

Certain states may also impose licensing requirements relating to blockchain technologies and digital assets. Although we are not directly involved in the custody, trading or exchange of digital assets and instead rely on a third-party provider, regulatory frameworks governing digital assets continue to evolve and may subject us to additional licensing or compliance obligations.

Read in the 10-K filed May 21, 2026 ↗

Because we do not custody digital assets directly and do not maintain insurance covering such assets—and our third-party provider does not maintain separate insurance coverage for customer digital assets—customers transacting in digital assets through our platform may suffer uninsured losses with limited recourse. Any regulatory action, licensing deficiency or customer losses associated with digital asset activities could result in enforcement actions, litigation, reputational harm and adverse impacts on our business.

Read in the 10-K filed May 21, 2026 ↗

The Bitcoin markets have historically experienced significant volatility in price, limited liquidity and trading volumes, relative anonymity, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges and other risks inherent in its entirely electronic, virtual form and decentralized network. Our Bitcoin holdings could significantly impact our financial results and the market price of our listed securities. Our Bitcoin strategy has not

Read in the 10-K filed Mar 24, 2026 ↗

To mitigate against the risk of this exposure, these agreements typically include a feature requiring the party that is out-of-the-money (on the basis of the MtM of the transactions), whether the Company or the derivative counterparty, to pledge collateral for all or some portion of the MtM of outstanding derivatives. In certain circumstances, the pledged collateral may be contractually permitted to be rehypothecated, repledged, used and/or commingled by the counterparty. The ability to commingle or rehypothecate may obscure legal title to the underlying collateral, particularly in the case of pledged digital assets. If the custodian of our collateral becomes subject to bankruptcy or liquidation proceedings, our ability to reclaim such collateral may be subject to competing claims from other creditors. In addition, if our transactions are early terminated or unwound following an event of default or termination event, including one resulting from the insolvency of a counterparty, our claim for any termination value against such counterparty will be a general unsecured claim to the extent not covered by the value of the collateral pledged to the Company. In such instances, any remaining claim will be subject to the claims of competing creditors. If we acquire U.S. Dollar-denominated stablecoins, we may be exposed to certain risks associated with such stablecoins.

Read in the 10-K filed Mar 24, 2026 ↗

We operate in highly regulated industries and, despite our efforts to comply with applicable legal requirements, like all companies in our industries, we must adapt to frequent changes in laws and regulations, and face complexity in interpreting and applying evolving laws and regulations to our business, heightened scrutiny of the conduct of financial services firms and increasing penalties for violations of applicable laws and regulations. We might fail to establish and enforce procedures that comply with applicable legal requirements and regulations. We might be adversely affected by new laws or regulations, changes in the interpretation of existing laws or regulations, or more rigorous enforcement. Furthermore, the U.S. Congress continues to consider potential legislation relating to digital assets and cryptocurrencies. For example, on July 17, 2025, the House of Representatives passed the CLARITY Act, which seeks to provide for a system of regulation of the offer and sale of digital assets by the SEC and CFTC and establish a provisional registration regime. The CLARITY Act is currently under consideration by the U.S. Senate, where the Senate Committee on Banking, Housing, and Urban Affairs released preliminary discussion drafts on July 22, 2025, September 5, 2025, and January 12, 2026, of its proposed “Digital Asset Market Clarity Act” that builds upon the CLARITY Act. On January 29, 2026, the Senate

Read in the 10-K filed Feb 18, 2026 ↗

As a result of our acquisition of Bitstamp, we now provide additional cryptocurrency products and services to institutional customers both in parts of the U.S. and internationally, including products and services such as retail lending, on-exchange lending, off-exchange settlement, post-trade settlement, and perpetual futures exchange. These offerings to certain institutional clients expose us to risks we have not historically faced at scale, including credit risk.

Read in the 10-K filed Feb 18, 2026 ↗

We hold all settled cryptocurrencies in custody on behalf of customers in two types of wallets: (i) hot wallets, which are managed online, and (ii) cold wallets, which are managed entirely offline and require physical access controls. With the exception of Bitstamp (discussed below), Robinhood does not utilize third-party custodians for settled cryptocurrencies, but does integrate proprietary technology from a third-party industry-standard vendor into the systems Robinhood uses to support the custody, transfer and

Read in the 10-K filed Feb 18, 2026 ↗

We currently facilitate customer trades for certain cryptocurrencies that we have analyzed under applicable internal policies and procedures and, for cryptocurrencies supported on our RHC and Bitstamp US platforms, that we believe are not securities under relevant U.S. federal and state securities laws. Determining whether any given cryptocurrency is a security is a highly complex, fact-driven analysis, which may change and evolve over time based on changes in the cryptocurrency and its related ecosystem and on evolving legal and regulatory developments. Different parties may reach different conclusions about the outcome of this analysis based on the same facts. The analysis may become clearer depending on the outcome in certain cases currently pending in varying stages of litigation. The SEC Staff has indicated that the determination of whether or not a cryptocurrency is a security depends on the characteristics and use of that particular asset. The SEC, individual Commissioners and the SEC Staff have previously taken positions that certain cryptocurrencies are “securities” in the context of settled or litigated enforcement actions. Although the SEC had not historically provided advance confirmation on

Read in the 10-K filed Feb 18, 2026 ↗

the status of any particular cryptocurrency as a security, speeches by senior officials at the SEC have indicated that the SEC generally does not consider Bitcoin or Ether to be securities and Staff of the SEC’s Division of Corporation Finance published statements clarifying that the Division does not view the offers and sales of certain “stablecoins” and “meme coins” to constitute securities transactions. Moreover, SEC Staff have authored informal, non-binding “no-action” letters to the promoters of a handful of digital assets to the effect that the Staff would not recommend enforcement action to the SEC on the basis that transactions in such digital assets, as described to the Staff by their respective promoters, are securities transactions, including with respect to the issuance of tokens in connection with internet and energy decentralized physical infrastructure projects and a consumer finance rewards program. However, such statements and views are not official policy statements by the SEC and reflect only the SEC Staff’s and speakers’ views, which are not binding on the SEC or any court or other agency (including, for instance, the NYDFS, which recently published a consumer alert concerning meme coins that did not opine on whether meme coins constituted securities but warned consumers of the risks of such coins), may be withdrawn at any time without notice or comment by the SEC or its senior officials, cannot be generalized to any other cryptocurrency, and might evolve (including, for instance, recently enacted legislation provides guidelines for the regulation of stablecoins in the U.S., which may differ from the views set forth in the SEC Staff statement regarding stablecoins). With respect to all cryptocurrencies other than Bitcoin and Ether, there is less certainty about whether they would be viewed as securities under the applicable federal and state securities laws. However, on November 12, 2025, SEC Chairman Paul Atkins stated during a speech that it is his view that “most crypto tokens trading today are not themselves securities,” further specifying his view that, subject to certain qualifications, he does not believe certain “digital commodities,” “network tokens,” “digital collectibles,” or “digital tools” constitute securities and that he anticipates the Commission will consider establishing a clear token taxonomy in the coming months. However, such statement is not binding on the SEC or any court or other agency. Additionally, U.S. regulators have expressed concerns about cryptocurrency platforms adding multiple new coins, some of which they may view as unregistered securities. Additionally, the current presidential administration and control of Congress in the U.S. present considerable uncertainty as to cryptocurrency regulations and how regulators will apply the securities laws to cryptocurrencies and what changes Congress may enact with respect to cryptocurrencies. Although our policies and procedures are intended to enable us to make risk-based assessments regarding the likelihood that a particular cryptocurrency could be deemed a security under applicable laws, including federal securities laws, our assessments are not definitive legal determinations as to whether a particular digital asset is a security under such laws. Accordingly, regardless of our conclusions, we could be subject to legal or regulatory action in the event the SEC, a state regulator, or a court were to assert or determine that a cryptocurrency supported by our RHC or Bitstamp US platforms is a “security” under U.S. law.

Read in the 10-K filed Feb 18, 2026 ↗

For example, in June 2023, the SEC charged Binance and, separately, Coinbase with operating their respective cryptocurrency trading platforms as unregistered national securities exchanges, brokers, and clearing agencies, also alleging that certain cryptocurrencies supported on their respective platforms are securities. The charges also implicated Coinbase’s staking-as-a-service program and its non-custodial wallet. In November 2023, the SEC brought similar charges against Kraken, alleging that it operated as an unregistered securities exchange, brokerage and clearing agency. In February 2025, March 2025, and May 2025, each of Coinbase, Kraken, and Binance, respectively, entered into a court-approved joint stipulation with the SEC to dismiss each of the SEC’s lawsuits against such parties with prejudice. Several other digital assets market participants, including us, have also announced that the SEC informed them that the SEC was terminating its investigation or enforcement action into their firm. Also, in April 2025, the Office of the Deputy Attorney General issued a memorandum (the “April DOJ Memo”), setting out new enforcement priorities for digital asset-related investigations and prosecutions by the DOJ. The April DOJ Memo directed prosecutors not to “target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations”. The April DOJ Memo explained that the DOJ will instead prioritize cases against individuals who cause financial harm to digital asset investors and consumers and/or use digital assets in furtherance of other criminal conduct. The decisions by regulators not to bring enforcement actions provides, and any other action, settlement, or related investigation by regulators, might provide, additional guidance on the legal status of cryptocurrencies as securities more generally, which has affected and might significantly affect the actual or perceived regulatory status and value of cryptocurrencies we currently support or might support in the future. On January 21, 2025, the SEC announced that then-Acting Chairman Mark Uyeda “launched a

Read in the 10-K filed Feb 18, 2026 ↗

crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets.” The task force is focused on helping the SEC “draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.” The SEC formed the Crypto Task Force to provide clarity on the application of the federal securities laws to the crypto asset market and to recommend practical policy measures that aim to foster innovation and protect investors. Since formation, the Crypto Task Force has accepted written submissions on various cryptocurrency-related topics from industry participants; hosted roundtables on topics relating to security status, trading, custody, tokenization, DeFi, and financial surveillance and privacy; and has held meetings with interested stakeholders. On July 31, 2025, SEC Chairman Paul Atkins announced the launch of “Project Crypto,” described as “a Commission-wide initiative to modernize the securities rules and regulations to enable America’s financial markets to move on-chain.” In connection with this initiative, Chairman Atkins indicated that he has asked the Crypto Task Force to work on developing proposals to implement recommendations in the July 30, 2025, President’s Working Group on Digital Asset Markets Report, as well as a potential innovation exemption. While these developments are positive, the Crypto Task Force’s work remains in the early stages, and no formal rulemaking or exemptions have been proposed or adopted to date. In addition, notwithstanding recent positive developments involving the SEC, DOJ, and other federal regulators, state regulators retain independent authority to enforce their own securities laws, which may differ from or be interpreted more expansively than federal law. As a result, a state regulator could determine that a particular digital asset, product, or service constitutes a security under state law, even if the SEC has elected not to pursue enforcement action, the SEC has provided informal guidance or assurances to the contrary, or the asset, product, or service is otherwise excluded from the definition of a security at the federal level. Moreover, private litigants may assert claims under federal or state securities laws based on similar theories, regardless of the positions taken by federal regulators.

Read in the 10-K filed Feb 18, 2026 ↗

registration, which could severely limit its liquidity, usability, and transactability. Moreover, the networks on which such supported cryptocurrencies are used might be required to be regulated as securities intermediaries, and subject to applicable rules, which could effectively render the network impracticable for its existing purposes. In addition, our growth might be adversely affected if we are not able to expand our RHC platform to include additional cryptocurrencies that the SEC has determined to be securities or that we believe are likely to be determined to be securities.

Read in the 10-K filed Feb 18, 2026 ↗

In June 2025, we announced that RHC will be offering crypto staking services to eligible customers in certain jurisdictions in the U.S. In several enforcement actions filed by the SEC under the prior administration, the SEC alleged that certain companies had offered staking services to retail customers for various digital assets as unregistered securities or acted as unregistered securities broker-dealers in facilitating offers or sales of third-party staking services in violation of the registration provisions of the Securities Act or the Exchange Act. For example, as described under “-Risks Related to Cryptocurrency Products and Services-In the U.S., any particular cryptocurrency’s status as a “security” is subject to a high degree of uncertainty and if we have not properly characterized one or more cryptocurrencies, we might be subject to regulatory scrutiny, investigations, fines, and other penalties,” in 2023 the SEC charged Kraken, Coinbase and Binance with offering and selling digital asset staking-as-a-service programs to retail customers as unregistered investment contract schemes in violation of the Securities Act. In June 2024, the SEC charged Consensys Software Inc. with acting as an underwriter of unregistered securities in violation of the Securities Act and as an unregistered broker in violation of the Exchange Act by marketing the Lido and Rocket Pool third-party liquid staking-as-a-service programs to retail customers through Consensys’ “Metamask Staking” platform. As noted above, the litigation against Binance, Coinbase, and Kraken has been dismissed, and the SEC filed a stipulation to dismiss its lawsuit against Consensys with prejudice in March 2025.

Read in the 10-K filed Feb 18, 2026 ↗

The cryptocurrency accounting rules and regulations that we must comply with are complex and subject to interpretation by the FASB, the SEC, and various bodies formed to promulgate and interpret

Read in the 10-K filed Feb 18, 2026 ↗

The cryptocurrency industry is rapidly evolving, and the tokenization of real-world assets is a nascent development in the industry. Accordingly, there remains considerable regulatory uncertainty regarding how transactions, products, services or offerings involving tokenized real-world assets, including tokenized financial instruments, are or should be regulated. While certain lawmakers, regulators and other public officials in the U.S. and in foreign jurisdictions have previously made statements or issued guidance relating to the legal and regulatory framework applicable to tokenized real-world assets, the legal and regulatory framework is still in the early stages, is continuing to evolve rapidly and remains uncertain and fragmented across jurisdictions. For example, in July 2025, SEC Commissioner Hester M. Peirce issued a statement noting that tokenized securities are still securities, and therefore transactions involving tokenized securities are subject to federal securities laws. Advisory committees and staff of the CFTC have also discussed exploring a potential regulatory framework for tokenization of assets, including tokenized collateral.

Read in the 10-K filed Feb 18, 2026 ↗

The Robinhood Stock Token offering and the Private Company Stock Token Promotion also involved, and could involve, operational risks, in addition to existing cryptocurrency risks. They have relied on, and could rely on, accurate and timely price data, functioning systems for custody and valuation, and clear communication to customers about how the tokens work. If these systems fail, or if customers misunderstand that the tokens don’t represent actual securities, we could face regulatory action, legal exposure, or reputational harm.

Read in the 10-K filed Feb 18, 2026 ↗

fully 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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

In 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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

The lack of legal recourse and insurance for digital assets increases the risk of total loss in the event of theft or destruction.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

Although 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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

The 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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

Security 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:

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

Blockchain 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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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

Read in the 10-K filed Mar 31, 2026 ↗

● 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;

Read in the 10-K filed Mar 31, 2026 ↗

● increased regulatory focus on Layer-1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements.

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Tokenized 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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

Regulatory uncertainty and evolving treatment of digital assets could adversely affect our business.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

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.

Read in the 10-K filed Mar 31, 2026 ↗

In addition, although we consolidate American Bitcoin’s results of operations in our financial statements, the presence of minority shareholders, separate management teams, contractual arrangements, fiduciary responsibilities, and regulatory constraints, among other things, limits our control over its operations, governance, and strategic decisions. Conflicts of interest may arise between us and minority shareholders or other stakeholders, and the resolution of such conflicts may not be favorable to us. Further, as we are the majority owner of American Bitcoin’s capital stock, we are also exposed to risks associated with the actual or perceived value of that equity interest. The market price of American Bitcoin’s Class A common stock has been, and may continue to be, volatile and subject to significant fluctuations due to a variety of factors, including changes in Bitcoin prices, market sentiment toward digital asset-related businesses, operating performance, regulatory developments, capital structure, liquidity, and broader equity market conditions. The value of our equity ownership in American Bitcoin may decline significantly, which could result in impairment charges or other adverse impacts to our financial statements, and we may not be able to monetize our ownership interest on favorable terms, or at all. In addition, market perception of American Bitcoin, including investor sentiment, media coverage, or developments affecting its business or industry, may also influence investor perception of Hut 8 and could adversely affect the market price and trading volatility of our common stock. Our investment in American Bitcoin is also subject to the risks described in American Bitcoin’s filings with the SEC, including the risk factors set forth therein, which, if realized, could adversely affect the value of our ownership interest. Any such decline in value, increased volatility, or adverse market perception could have a material adverse effect on our business, financial condition, results of operations, reputation, brand, and liquidity.

Read in the 10-K filed Feb 25, 2026 ↗

In this evolving landscape, we compete directly with cloud services providers, digital infrastructure developers, and large-scale Bitcoin miners. The nature of competition varies across the layers of our platform:

Read in the 10-K filed Feb 25, 2026 ↗

further reductions in mining rewards of Bitcoin, including block reward halving events;

Read in the 10-K filed Feb 25, 2026 ↗

In addition, we and American Bitcoin have adopted ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires us and American Bitcoin to measure our Bitcoin holdings at fair value in our balance sheets, with gains and losses in the fair value of our Bitcoin recognized in net income for each reporting period. Therefore, volatility and fluctuations in the price of Bitcoin has caused, and may in the future cause, our and American Bitcoin’s quarterly results to fluctuate significantly, which could have an adverse effect on our and American Bitcoin’s financial results and the value of our and American Bitcoin’s securities.

Read in the 10-K filed Feb 25, 2026 ↗

Although our and American Bitcoin’s custodians, digital asset trading platforms, counterparties, and other third-party providers employ various security measures to mitigate the risk of loss, damage, or theft, neither they nor we can guarantee that such events will not occur, whether as a result of cyberattacks, malicious activity, computer or human error, natural disasters, terrorist acts, or other events. Digital asset trading platforms and counterparties have experienced hacks, security breaches, insolvencies, and operational failures in the past, including instances where platforms were undercapitalized or over-exposed, such as FTX, and may lack adequate insurance or otherwise be unable or unwilling to compensate us or American Bitcoin for losses. In addition, malicious actors may be able to intercept or divert our or American Bitcoin’s Bitcoin during transactions, transfers, or pledging activities. Given the significant amount of Bitcoin we and American Bitcoin hold and expect to continue to hold, any actual or perceived loss, whether temporary or permanent, could adversely affect our and American Bitcoin’s business, financial condition, and results of operations. Furthermore, as Bitcoin transactions are generally irreversible, any Bitcoin that is stolen, lost, or incorrectly transferred may be irretrievable, leaving us or American Bitcoin with limited or no effective means of recovery.

Read in the 10-K filed Feb 25, 2026 ↗

We and American Bitcoin also face credit and counterparty risk in connection with custodied, stored, or pledged Bitcoin. For example, we currently pledge Bitcoin to Coinbase in connection with our Coinbase credit facility and American Bitcoin currently pledges Bitcoin to BITMAIN in connection with the purchase of mining equipment. Our and American Bitcoin’s ability to monitor the financial condition and operational stability of counterparties such as Coinbase and BITMAIN is limited, and any recovery efforts could be time-consuming, costly, and uncertain. If any such counterparty were to fail to perform its obligations, experience financial distress, or become subject to insolvency or bankruptcy proceedings, we or American Bitcoin could face delays in, or losses associated with, the recovery of our or American Bitcoin custodied, stored, or pledged Bitcoin, which could have a material adverse effect on our and American Bitcoin’s business, financial condition, and results of operations.

Read in the 10-K filed Feb 25, 2026 ↗

In addition to Bitcoin, we have acquired 100 million World Liberty Financial, Inc. tokens (the “WLFI Tokens”), which are subject to many of the same risks applicable to Bitcoin and other digital assets, including price volatility, limited liquidity, regulatory uncertainty, technological risks, cybersecurity risks, and changes in market sentiment. Unlike Bitcoin, our WLFI Tokens are subject to an indefinite lock-up, with a minimum of twelve months from the purchase date, and may not be freely transferable. The WLFI Tokens are also subject to the governance procedures of the World Liberty Financial, Inc. protocol, which may be amended or administered in the discretion of World Liberty Financial, Inc. or its affiliates. As a result, we may have limited ability to influence decisions affecting the WLFI Tokens or its underlying protocol, and the value, utility, or transferability of the WLFI Tokens could be adversely affected by governance actions or other decisions beyond our control.

Read in the 10-K filed Feb 25, 2026 ↗

Investors may view our common stock or American Bitcoin’s Class A common stock as an alternative to an investment in an exchange-traded products (“ETPs”), and choose to purchase shares of a spot Bitcoin ETP instead of such securities, which could impact the price of our common stock and/or American Bitcoin’s Class A common stock. They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to Bitcoin that is generally not subject to federal income tax at the entity level as we or American Bitocin will be, or the other risk factors applicable to an operating business. Additionally, unlike spot Bitcoin ETPs, we and American Bitcoin (i) do not seek for our securities to track the value of the underlying Bitcoin we hold before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the Exchange Act, including Regulation M, and other securities laws, which enable ETPs to continuously align the value of their shares to the price of the underlying assets they hold through share creation and redemption, (iii) are Delaware corporations rather than statutory trusts, and do not operate pursuant to a trust agreement that would require us to pursue one or more stated investment objectives, and (iv) are not required to provide daily transparency as to our Bitcoin holdings or our daily net asset value.

Read in the 10-K filed Feb 25, 2026 ↗

Regulatory changes reclassifying Bitcoin as a security could lead to our or certain of our subsidiaries’ classification as an “investment company” under the Investment Company Act of 1940 (the “1940 Act”) and could adversely affect the market price of Bitcoin and the market price of our listed securities.

Read in the 10-K filed Feb 25, 2026 ↗

Our assets, and the assets of our consolidated subsidiary, American Bitcoin, are concentrated in Bitcoin holdings. While senior SEC officials have stated their view that Bitcoin is not a “security” for purposes of the federal securities laws, a contrary determination by the SEC could lead to our and/or American Bitcoin’s classification as an “investment company” under the 1940 Act. Such a change could require us and/or American Bitcoin (i) to register as an “investment company” under the 1940 Act, which would subject us and/or American Bitcoin to significant additional regulation that could have a material adverse effect on our business operations, financial condition, results of operations and stock price or (ii) to change our and/or American Bitcoin’s business or seek regulatory relief such that we and/or American Bitcoin are not required to register as an “investment company” under the 1940 Act, including by acquiring operating assets with cash and/or Bitcoin on hand or liquidating investment securities or Bitcoin or seeking a no-action letter from the SEC. Liquidating investment securities or Bitcoin could result in losses, and there is no guarantee that we or American Bitcoin could obtain a no-action letter from the SEC. In addition, if Bitcoin 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 Bitcoin and in turn adversely affect the market price of our listed securities.

Read in the 10-K filed Feb 25, 2026 ↗

The Hyperliquid blockchain, exchange and related products launched in early 2023, and the HYPE token launched in November 2024. When we refer to HYPE, we are referring to HYPE tokens and liquid staking tokens derived from HYPE tokens (“LSTs”). We also hold other digital assets. Hyperliquid is an early-stage project with a limited operating history. Developers, validators, traders and market makers may not adopt Hyperliquid’s technology, and we believe that Hyperliquid’s adoption will likely depend on significant platform and product development and differentiation in a highly competitive market. A failure to scale, unexpected technical flaws, privacy issues or the lack of engagement could materially reduce demand for HYPE and adversely affect its value.

Read in the 10-K filed Mar 30, 2026 ↗

The price of HYPE has exhibited sudden and significant fluctuations due to shifts in market sentiment, speculative trading, macroeconomic trends, technology-related disruptions and regulatory announcements. Because digital asset trading markets are relatively new, largely unregulated and, at times, subject to limited liquidity, HYPE has experienced and may continue to experience larger or more frequent price swings than traditional asset classes. A rapid decrease in the price of HYPE - whether the result of negative perception, a lack of stability on the digital asset trading platforms on which HYPE trades, market manipulation of cryptocurrency trading platforms by customers, a cyber-security incident, regulatory action or other factors-could materially reduce the value of any HYPE we hold, force us to recognize impairment charges, and depress the market price of our securities.

Read in the 10-K filed Mar 30, 2026 ↗

investment and trading activities such as (i) trading activities of highly active retail and institutional users, speculators and investors or (ii) actual or expected significant dispositions of HYPE by large holders, including the expected liquidation of digital assets seized by governments or associated with entities that have filed for bankruptcy protection, or associated with tokens vested by the Hyperliquid core team;

Read in the 10-K filed Mar 30, 2026 ↗

negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, HYPE, Hyperliquid or the broader digital assets industry;

Read in the 10-K filed Mar 30, 2026 ↗

competition from other decentralized exchanges or digital assets that exhibit comparable or better speed, security, scalability or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets;

Read in the 10-K filed Mar 30, 2026 ↗

a decrease in the price of other digital assets, to the extent the decrease in the price of such other digital assets may cause a decrease in the price of HYPE or adversely affect investor confidence in digital assets generally;

Read in the 10-K filed Mar 30, 2026 ↗

regulatory, legislative, enforcement and judicial actions that adversely affect access to, functionality of or performance of Hyperliquid and its associated products such as cryptocurrency perpetual futures, the price, ownership, transferability, trading volumes, legality or public perception of, HYPE or other Layer 1 blockchains, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from accessing the Hyperliquid decentralized exchange and its associated products or operating in a manner that allows them to continue to deliver services to the digital assets industry;

Read in the 10-K filed Mar 30, 2026 ↗

The price of our listed securities has been and is likely to continue to be volatile, and with the adoption of our cryptocurrency treasury strategy in 2025, we expect to continue to see additional volatility in our stock price. In addition, if investors view the value of our listed securities as dependent upon or linked to the value or change in the value of our HYPE holdings, the price of HYPE may significantly influence the market price of our listed securities. The price of HYPE has historically been, and is likely to continue to be, volatile.

Read in the 10-K filed Mar 30, 2026 ↗

The digital asset ecosystem is characterized by rapid technological innovation and evolution, short development cycles, and intense competition among Layer 1 blockchains and related infrastructure providers. Numerous alternative cryptocurrencies, blockchains, and DeFi platforms are vying for market share in areas such as perpetual futures trading, staking, and on-chain liquidity provision, which are core to the Hyperliquid ecosystem and its HYPE token. As of February 28, 2026, HYPE was the eleventh largest digital asset by market capitalization (excluding stablecoins), as tracked by CoinMarketCap.com, based on circulating market capitalization. As of February 28, 2026, the top eleven digital assets tracked by CoinMarketCap.com (excluding stablecoins) had a total market capitalization of approximately $1.82 trillion (including the approximately $7.5 billion market cap of HYPE, based on circulating market capitalization), as calculated using market prices and total available supply of each digital asset.

Read in the 10-K filed Mar 30, 2026 ↗

HYPE faces competition from a wide range of digital assets, including Bitcoin and Ether, and from existing protocols, such as Aptos and Sei, as well as new entrants that are currently being developed. Many consortiums and financial institutions are also researching and investing resources into private or permissioned blockchain platforms rather than open platforms like the Hyperliquid network. As 99% of Hyperliquid’s revenues are currently allocated to the Assistance Fund for the repurchase of HYPE tokens, a decline in revenue could have a material impact on the demand for HYPE tokens. In addition, HYPE is supported by fewer trading platforms than more established digital assets, such as Bitcoin and Ether, which could impact its liquidity. Further, the Hyperliquid network is in direct competition with other smart contract platforms, such as the Ethereum, Solana, Avalanche and Cardano networks. Competition from the emergence or growth of alternative digital assets or other smart contract platforms could have a negative impact on the demand for, and price of, HYPE, and thereby adversely affect the value of our HYPE holdings.

Read in the 10-K filed Mar 30, 2026 ↗

Certain digital assets, such as Bitcoin, use a “proof-of-work” consensus algorithm. The genesis block on the Bitcoin blockchain was mined in 2009, and Bitcoin’s blockchain has been in operation since then. Many newer blockchains enabling smart contract functionality use a newer consensus algorithm known as “proof-of-stake.” While their proponents believe that they may have certain advantages, the “proof-of-stake” consensus mechanisms and governance systems underlying many newer blockchain protocols, including the Hyperliquid network, and their associated digital assets – including our HYPE holdings – have not been tested at scale over as long of a period of time or subject to as widespread use or adoption as, for example, Bitcoin’s proof-of-work consensus mechanism has. This could lead to these blockchains, and their associated digital assets, having undetected vulnerabilities, structural design flaws, suboptimal incentive structures for network participants (e.g., validators), technical disruptions or a wide variety of other problems, any of which could cause these blockchains not to function as intended, lead to outright failure to function entirely causing a total outage or disruption of network activity, or cause the blockchains to suffer other operational problems or reputational damage, leading to a loss of users or adoption or a loss in value of the associated digital assets, including our HYPE holdings. Over the long term, there can be no assurance that the proof-of-stake blockchain on which our HYPE holdings rely will achieve widespread scale or adoption or perform successfully. Any failure to do so could negatively impact the price of HYPE and the value of our HYPE holdings.

Read in the 10-K filed Mar 30, 2026 ↗

The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of HYPE and adversely affect our business.

Read in the 10-K filed Mar 30, 2026 ↗

As a result of our HYPE treasury strategy, our assets are concentrated in our HYPE holdings. Accordingly, the emergence or growth of digital assets other than HYPE may have a material adverse effect on our financial condition. There are numerous alternative digital assets and many entities, including consortiums and financial institutions, that are researching and investing resources into private or permissioned blockchain platforms or digital assets, that do not use proof-of-stake consensus mechanism like the Hyperliquid network, or use different technical innovations that build upon or improve the proof-of-stake consensus mechanism. For example, in late 2022, the Ethereum network transitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly less computing power than proof-of-work mining. The Ethereum network has completed another major upgrade since then and may undertake additional upgrades in the future. If the mechanisms for validating transactions in Ethereum and other alternative digital assets are perceived as superior to proof-of-stake, those digital assets could gain market share relative to HYPE.

Read in the 10-K filed Mar 30, 2026 ↗

We plan to use a portion of our capital raised that is not required to provide working capital for our ongoing operations to invest in HYPE. The price of HYPE has been subject to significant price fluctuations and is highly volatile. Moreover, digital assets 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 our HYPE holdings.

Read in the 10-K filed Mar 30, 2026 ↗

Any increase or decrease in the fair value of HYPE will require us to recognize unrealized gains or losses, which 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 securities. In addition, the application of generally accepted accounting principles in the United States with respect to digital assets remains uncertain in some respects, and any future changes in the manner in which we account for our HYPE holdings could have a material adverse effect on our financial results and the market price of our securities.

Read in the 10-K filed Mar 30, 2026 ↗

In addition, if investors view the value of our securities as dependent upon or linked to the value or change in the value of our HYPE holdings, the price of such digital assets may significantly influence the market price of our securities.

Read in the 10-K filed Mar 30, 2026 ↗

Historically, cryptocurrency markets have 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 their entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our digital asset holdings at favorable prices or at all. Further, we use custody infrastructure providers and transact with trade execution partners. Currently, we do not deposit our digital assets directly with a custodian but instead use a self-custody approach using infrastructure provided by a custodian. These entities do not have the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation. For example, U.S. banks are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor in the case of the bank’s insolvency. In addition, U.S. broker-dealers are covered by the Securities Investor Protection Corporation (“SIPC”), which ensures recovery of the securities by the depositor. In contrast, cryptocurrency custody infrastructure providers do not offer such protections. If such a provider were to become insolvent, it is possible that, while the assets are not in custody of a third party, we could face delays or difficulties with respect to the management of our digital assets.

Read in the 10-K filed Mar 30, 2026 ↗

Apart from the risk of insolvency of the custody infrastructure provider, there is also a risk of custodians causing operational difficulty, typically in connection with a security incident, regulatory compliance or technical issues, and may be unresponsive to customers attempting to retrieve their funds. In such events, it may be difficult to reach a representative to assist with unfreezing assets and we may not be able to sell or use our digital assets.

Read in the 10-K filed Mar 30, 2026 ↗

Additionally, the secondary market for borrowing against digital assets is not well developed. We may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered digital assets or otherwise generate funds using our digital assets, especially during times of market instability or when the price of digital assets has declined significantly. If we are unable to sell our digital assets, enter into additional capital raising transactions using digital assets as collateral or otherwise generate funds using our digital assets, or if we are forced to sell our digital assets at a significant loss in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

Read in the 10-K filed Mar 30, 2026 ↗

Competition from central bank digital currencies (“CBDCs”) and emerging payments initiatives involving financial institutions could adversely affect the price of HYPE and other digital assets.

Read in the 10-K filed Mar 30, 2026 ↗

Central banks in various countries have introduced digital forms of legal tender. China’s CBDC project, known as Digital Currency Electronic Payment, has reportedly been tested in a live pilot program conducted in multiple cities in China. Central banks representing at least 130 countries have published retail or wholesale CBDC work ranging from research to pilot projects. Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could have an advantage in competing with, or replace, HYPE and other cryptocurrencies as a medium of exchange or store of value. Central banks and other governmental entities have also announced cooperative initiatives and consortia with private sector entities, with the goal of leveraging blockchain and other technology to reduce friction in cross-border and interbank payments and settlement, and commercial banks and other financial institutions have also recently announced a number of initiatives of their own to incorporate new technologies, including blockchain and similar technologies, into their payments and settlement activities, which could compete with, or reduce the demand for, HYPE. As a result of any of the foregoing factors, the price of HYPE could decrease, which could adversely affect the value of our HYPE holdings.

Read in the 10-K filed Mar 30, 2026 ↗

The Company operates an options strategy on the price of HYPE to mitigate risk and enhance yield on its digital asset treasury. The Company executes its options strategies through agreements with institutional counterparties. Confirmations of transaction activity are executed among the Company and its counterparties. In 2025, the Company only executed out of the money covered call option agreements, on the price of HYPE sold against and collateralized by HYPE owned by the Company (including liquid staking tokens such as HiHYPE and kHYPE). Executing covered calls limits upside appreciation potential on the Company’s corresponding digital assets. In addition, these covered call agreements are typically collateralized 100% by the Company’s underlying digital assets. This means the Company is restricted from selling, transferring, or otherwise deploying corresponding HYPE tokens while posted as collateral under open positions. In the first quarter of 2026, the Company also sold out of the money puts on the price of HYPE. Selling

Read in the 10-K filed Mar 30, 2026 ↗

Hyperion Institutional HYPE (“HiHYPE”), Kinetiq Staked HYPE (“kHYPE”) and Kinetiq Market HYPE (“kmHYPE”) are liquid staking tokens (each, an “LST”) designed by Kinetiq that enable the Company to access HyperEVM DeFi. Each LST evidences ownership of the Company’s deposited HYPE, the underlying digital asset of such LST, and automatically accrues staking rewards denominated in HYPE. Liquid staking allows the Company to earn native staking rewards while maintaining access to liquidity on its digital assets that can be used for additional strategies on- and off-chain.

Read in the 10-K filed Mar 30, 2026 ↗

The Hyperliquid network is based, in part, upon the development and deployment of smart contracts, which are self-executing contracts with the terms of the agreement written into software code. Like any 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. The smart contract is deployed on Hyperliquid and, as such, may contain a bug or other vulnerability that may lead to the loss of, or inability to access, digital assets held in the smart contract. The Company currently relies on Kinetiq for its liquid staking solution. The smart contract code written by Kinetiq was audited by Code4rena, Spearbit, Pashov Audit Group and Zenith. Nevertheless, there is no guaranty against a bug or other vulnerability leading to a loss of digital assets.

Read in the 10-K filed Mar 30, 2026 ↗

HYPE, the Hyperliquid network and other digital assets are novel and are subject to significant legal and regulatory uncertainty.

Read in the 10-K filed Mar 30, 2026 ↗

HYPE and other digital assets are relatively novel, have not been in existence for an extended period of time, and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and 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 HYPE or the ability of individuals or institutions such as us to own or transfer HYPE.

Read in the 10-K filed Mar 30, 2026 ↗

in January 2025, President Trump signed an Executive Order instructing a working group comprised of representatives from key federal agencies to evaluate measures that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries. This area continues to evolve and additional regulations are likely to be issued in the future, the effect of which cannot be predicted at this time;

Read in the 10-K filed Mar 30, 2026 ↗

in April 2023, the European Union adopted Markets in Crypto Assets Regulation, a comprehensive digital asset regulatory framework for the issuance and use of digital assets, like bitcoin;

Read in the 10-K filed Mar 30, 2026 ↗

in China, the People’s Bank of China and the National Development and Reform Commission have outlawed cryptocurrency mining and declared all cryptocurrency transactions illegal within the country, and

Read in the 10-K filed Mar 30, 2026 ↗

It is not possible to predict whether or when new laws will be enacted that change the legal framework governing digital assets or provide additional authorities to the SEC or other regulators, or whether or when any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact the value of digital assets generally and HYPE specifically. The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of HYPE, as well as our ability to hold or transact in HYPE, and in turn adversely affect the market price of our listed securities.

Read in the 10-K filed Mar 30, 2026 ↗

Our HYPE and other digital assets treasury strategy subjects us to enhanced regulatory oversight.

Read in the 10-K filed Mar 30, 2026 ↗

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 between Russia and Ukraine. While we have implemented 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 HYPE and other digital assets 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 HYPE or other digital assets from bad actors that have used HYPE or other digital assets to launder money or persons subject to sanctions, we may be subject to regulatory proceedings, and any further transactions or dealings in HYPE or other digital assets by us may be restricted or prohibited.

Read in the 10-K filed Mar 30, 2026 ↗

A portion of our HYPE or other digital assets may serve as collateral securing our outstanding indebtedness, and we may incur additional indebtedness or enter into other financial instruments in the future that may be collateralized by our HYPE or other digital assets. We may also consider pursuing strategies to create income streams or otherwise generate funds using our HYPE or other digital assets. These types of digital assets-related transactions are the subject of enhanced regulatory oversight. These and any other digital assets-related transactions we may enter into, beyond simply acquiring and holding digital assets, 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.

Read in the 10-K filed Mar 30, 2026 ↗

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. The FTX collapse may have increased regulatory focus on the digital assets industry. Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting HYPE, as well as enforcement actions involving or impacting our trading venues, counterparties and custody infrastructure providers, may impose significant costs or significantly limit our ability to hold and transact in HYPE. However, it is important to note that Hyperliquid—the exchange to which HYPE is native—is intended to be more decentralized than FTX, such that a single entity is unlikely to exert complete control over the entire system. For example, unlike FTX when it filed for bankruptcy protection, Hyperliquid’s assets are custodied on-chain (not centrally by a single entity), order matching on Hyperliquid occurs transparently via on-chain mechanisms (not fully off-chain), Hyperliquid is governed by a set of approximately 24 validators (not a single individual), and Hyperliquid’s on-chain states (e.g., positions, collateral, and funding rates) are publicly available such that users can audit the system.

Read in the 10-K filed Mar 30, 2026 ↗

We have implemented a process for analyzing the U.S. federal securities law status of HYPE and other cryptocurrencies as guidance and case law continue to evolve. As part of this process, we take into account a number of factors, including the various definitions of what constitutes a “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as court rulings, regulatory reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. In July 2025, the SEC announced “Project Crypto” which is expected to result in rulemakings and/or other authoritative guidance on how to determine whether digital assets are or are not “securities” for purposes of U.S. federal securities laws and in March 2026, the SEC issued the SEC Interpretive Release. Public statements by Chairman Atkins suggest that the SEC is considering further regulatory safe harbors. Further, it appears that the current United States Congress is inclined toward increased flexibility regarding the regulatory treatment of digital assets. We expect this area of regulation will develop rapidly during this Administration, and we plan to continually monitor developments in this area as they evolve.

Read in the 10-K filed Mar 30, 2026 ↗

While we recognize that any new regulatory framework for digital assets promulgated by the SEC, such as the SEC Interpretive Release, may not be based on all of the elements of the Howey test, we believe more generally that HYPE does not otherwise have the characteristics of a “security” for purposes of the U.S. federal securities laws. The views of the SEC and other regulators, and Congress, regarding the proper classification of HYPE and other digital assets may evolve over time, based in part on assessments of a multitude of factors over which we have no control. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion that HYPE should not be classified as a security, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that HYPE or any other digital asset we might hold is a “security.” If HYPE is alleged or ultimately determined to be a security, the viability of Hyperliquid, HYPE and our own business model would be materially and adversely affected. In such event, we would likely be required to register as an investment company under the Investment Company Act, and would also be at risk of enforcement proceedings and lawsuits against us, which could result in potential injunctions, cease-and-desist orders, fines and penalties. Such developments would adversely affect our business, results of operations, financial condition and prospects.

Read in the 10-K filed Mar 30, 2026 ↗

HYPE and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive questions under the Investment Company Act. There is a risk that assets or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes of the Investment Company Act, which would increase the percentage of securities held by us for Investment Company Act purposes. The SEC has requested information from a number of participants in the digital assets’ ecosystem regarding the potential application of the Investment Company Act to their businesses. For example, in an action unrelated to the Company, in February 2022, the SEC issued a cease-and-desist order under the Investment Company Act to BlockFi Lending LLC (“BlockFi”), in which the SEC alleged that BlockFi was operating as an unregistered investment company because it issued securities and also held more than 40% of its total assets, excluding cash, in investment securities, including the loans of digital assets made by BlockFi to institutional borrowers.

Read in the 10-K filed Mar 30, 2026 ↗

We face risks relating to the custody of our HYPE and other digital assets, such as the loss or destruction of private keys required to access our HYPE and cyberattacks or other data loss relating to our HYPE, including smart contract-related losses and vulnerabilities.

Read in the 10-K filed Mar 30, 2026 ↗

We hold our HYPE and other digital assets in self-custodied wallet addresses using infrastructure provided by Anchorage Digital Bank (a regulated custodian), as well as hardware wallet providers. Our wallet infrastructure does not restrict our ability to reallocate our HYPE and other digital assets among our wallet addresses, and our HYPE and other digital assets may be concentrated with a single custodian or custodial infrastructure provider from time to time. In light of the significant amount of HYPE that we hold, we expect to continually seek to engage additional custody infrastructure providers to achieve a greater degree of diversification in the custody of our HYPE as the extent of potential risk of loss is dependent, in part, on the degree of diversification. However, multiple custody infrastructure providers may utilize similar wallet infrastructure, cloud service providers or software systems, which could

Read in the 10-K filed Mar 30, 2026 ↗

HYPE is 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 HYPE is held. While the Layer 1 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 HYPE held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custody infrastructure providers will be able to access the HYPE held in the related digital wallet. Furthermore, we cannot provide assurance that our digital wallets, nor the digital wallets of our custody infrastructure providers, will not be compromised as a result of a cyberattack. The HYPE 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.

Read in the 10-K filed Mar 30, 2026 ↗

The digital assets held by us are not insured. The market for such insurance is in the early stages. Further, banking institutions will not accept our digital assets and they are therefore not insured by the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”). Therefore, a loss may be suffered with respect to our digital assets that is not covered by insurance and we may not be able to recover any of our carried value in these digital assets if they are lost or stolen or suffer significant and sustained reduction in conversion spot price. If we are not otherwise able to recover damages from a malicious actor in connection with these losses, our business and results of operations may suffer, which may have a material negative impact on the price of our securities. The limited rights of legal recourse available to us and our lack of insurance protection for risk of loss of our digital assets exposes us and our shareholders to the risk of loss of our digital assets for which no person may ultimately be held liable and we may not be able to recover our losses. Any uninsured losses may have an adverse effect on our results of operations, financial condition and prospects.

Read in the 10-K filed Mar 30, 2026 ↗

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, which could lead to a loss of our HYPE. 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 HYPE 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.

Read in the 10-K filed Mar 30, 2026 ↗

Our participation in on-chain activities related to validating and DeFi partnerships, such as our HYPE Asset Use Service agreements, exposes the company to slashing risk, which may result in partial loss of staked digital assets. Slashing is an enforcement mechanism that financially penalizes blockchain network validators for behavior that endangers network security or reliability. Slashing may occur due to validator misbehavior, software flaws, operational mistakes or changes to network governance, with tokens permanently forfeited and not recoverable. Such losses could have a material adverse effect on our financial condition and reputation. While we seek to mitigate these risks through legal contracts, internal controls and counterparty diligence, residual risk remains due to factors beyond our control.

Read in the 10-K filed Mar 30, 2026 ↗

HYPE and other digital assets are subject to significant legal, commercial, regulatory and technical uncertainty, and our HYPE strategy subjects us to enhanced regulatory oversight;

Read in the 10-K filed Mar 30, 2026 ↗

uncertainty around the regulatory status of digital assets, including HYPE, may impact our ability to list on certain exchanges;

Read in the 10-K filed Mar 30, 2026 ↗

changes in political administration may not guarantee a favorable regulatory environment for digital assets;

Read in the 10-K filed Mar 30, 2026 ↗

future SEC actions or court decisions could retroactively classify digital assets as a security, potentially leading to penalties or forced unwinding of transactions; and

Read in the 10-K filed Mar 30, 2026 ↗

increased regulatory focus on Layer 1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements.

Read in the 10-K filed Mar 30, 2026 ↗

We may engage in distinct digital asset financing strategies in which we will leverage our digital asset holdings to acquire additional amounts of the same leveraged digital assets, and may do so on a compounded basis, which will increase our exposure to smart-contract, operational and counterparty risks.

Read in the 10-K filed Mar 30, 2026 ↗

We may engage in digital asset leverage strategies to acquire additional amounts of HYPE. As part of this strategy, we may borrow digital assets by pledging our own HYPE holdings as collateral, deploy these borrowed assets to acquire additional amounts of HYPE, and subsequently re-pledge the newly acquired HYPE to further engage in these leveraged transactions. As each of these transactions will be effectuated on chain, the strategy may expose us to significant smart-contract vulnerabilities and operational risks. The smart contracts that are used for purposes of these transactions may contain undiscovered bugs, logical errors or economic vulnerabilities that could be exploited by malicious actors or that could cause the contracts to perform in unintended ways, resulting in partial or total loss of our collateral and borrowed assets. In addition, the strategy may subject us to counterparty risk through the platforms we utilize to facilitate leveraging strategies including, among others, insolvency of the platform, coding errors and cyberattacks. Finally, lenders customarily require that collateral ratios be maintained within narrowly defined thresholds and may exercise broad contractual discretion to impose additional margin requirements or to liquidate collateral without notice when those thresholds are breached. We may also incur losses if the interest that accrues on our borrowings significantly exceeds the revenue generated by the borrowed HYPE.

Read in the 10-K filed Mar 30, 2026 ↗

The U.S. federal income tax treatment of rewards from staking digital assets such as HYPE remains uncertain and is currently under the subject of debate and regulatory attention. Under current guidance by the Internal Revenue Service (“IRS”), staking rewards are generally treated as ordinary income upon receipt. If regulation or policy changes, or the interpretation or enforcement thereof, results in adverse tax treatment of rewards from staking HYPE, we could be subject to increased audits by the IRS and additional tax liabilities.

Read in the 10-K filed Mar 30, 2026 ↗

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 HYPE. The prices of digital assets have historically been subject to significant price fluctuations and are highly volatile. In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), which we have adopted.

Read in the 10-K filed Mar 30, 2026 ↗

HYPE trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many HYPE trading venues that 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 HYPE trading venues, including prominent exchanges that handle a significant volume of HYPE trading and/or are subject to regulatory oversight, in the event one or more HYPE trading venues cease or pause for a prolonged period the trading of HYPE or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

Read in the 10-K filed Mar 30, 2026 ↗

The SEC alleged as part of its June 5, 2023, complaint against Binance that Binance committed strategic and targeted “wash trading” through its affiliates to artificially inflate the volume of certain digital assets traded on its exchange. The SEC has also brought 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 HYPE market is significantly smaller than expected and that the United States makes up a significantly larger percentage of the HYPE market than is commonly understood. Any actual or perceived wash trading in the HYPE market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of our HYPE.

Read in the 10-K filed Mar 30, 2026 ↗

Negative perception, a lack of stability in the broader digital currency markets and the closure, temporary shutdown or operational disruption of HYPE trading venues, lending institutions, institutional investors, institutional miners, custodians, or other major participants in the HYPE ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy or any other reason, may result in a decline in confidence in HYPE and the broader digital currency ecosystem and greater volatility in the price of HYPE. For example, in 2022, each of Celsius Network, Voyager Digital, Three Arrows Capital, FTX and BlockFi filed for bankruptcy, following which digital assets significantly declined. In addition, in June 2023, the SEC announced enforcement actions against Coinbase and Binance, two providers of large trading venues for digital assets, which similarly was followed by a decrease in the market price of digital assets. These were followed in November 2023 by an SEC enforcement action against Payward Inc. and Payward Ventures Inc., together known as Kraken, another large trading venue for digital assets. While the complaint against Coinbase was dismissed in February 2025, the complaint against Payward Inc. and Payward Ventures Inc. was dismissed with prejudice in March 2025, and the complaint against Binance was dismissed in May 2025, the SEC or other regulatory agencies may initiate similar actions in the future. As the price of our listed securities may be affected by the value of our HYPE holdings, the failure of a major participant in the digital currency ecosystem could have a material adverse effect on the market price of our listed securities.

Read in the 10-K filed Mar 30, 2026 ↗

3 See https://www.interactivebrokers.com/lib/cstools/faq/#/content/182856890 for more information on the availability of cryptocurrencies for trading through our platform.

Read in the 10-K filed Feb 27, 2026 ↗

In May 2025, we acquired a digital asset custody business now known as ICE Digital Trust, LLC. Our new initiatives in connection with our digital asset custody business present operational, reputational, and financial risks, including increased risk of a security breach, system failure, or in connection with a decline in demand for digital assets.

Read in the 10-K filed Feb 5, 2026 ↗

Additionally, custodial platforms are prime targets for hackers. A breach of our custody systems could lead to the theft of customer assets and unauthorized transfers, for which the company might be held liable, and traditional insurance may not adequately cover losses related to digital assets. Further, our ownership of a digital asset custody business may also involve dependencies on decentralized or other third party blockchain services and the protocols, which we do not control and in turn may expose us to new and evolving technological risks.

Read in the 10-K filed Feb 5, 2026 ↗

The digital asset industry is subject to rapidly evolving and uncertain regulations at both the state and federal levels. Changes in laws or enforcement patterns, such as those related to anti-money laundering (AML) and tax reporting, could impact our ability to operate the business. Further, recent developments in the digital asset economy have led to increased volatility in digital asset markets, which in turn may increase the potential for loss of confidence in the digital asset ecosystem, or negative publicity surrounding digital assets impacting our reputation.

Read in the 10-K filed Feb 5, 2026 ↗

The recently enacted GENIUS Act in the U.S. establishes a framework for regulating stablecoins and legislative proposals in the U.S. and EU that, if enacted, will regulate digital assets and could adversely affect our ability to compete if they permit different standards or requirements for certain entities or technologies.

Read in the 10-K filed Feb 5, 2026 ↗

Moreover, the legislative and regulatory landscape continues to evolve to include alternative payment types, including digital and cryptocurrencies. The regulatory environment for crypto assets, stablecoins, and digital currencies is rapidly evolving, with increased oversight from federal and state regulatory agencies. Recent developments, including the GENIUS Act, and other legislative initiatives, bring increased oversight and more robust compliance obligations including consumer protection, anti-money laundering, sanctions compliance, operational resilience and recordkeeping requirements. We closely monitor legislative and regulatory changes to ensure any existing or new business models, product offerings, and risk and compliance programs adapt to new requirements. Any failure to comply with such laws and regulations could expose us to liability, regulatory scrutiny and/or reputational damage. Rapid changes to cryptocurrency laws and regulations could increase the costs and complexity of compliance, including associated recordkeeping costs, or could require us to change our business practices in a timeframe or manner adverse to our business. As we make significant investments in research, development, and marketing for new products in emerging technologies in an uncertain and rapidly changing regulatory landscape, we may not achieve immediate or expected returns.

Read in the 10-K filed Aug 28, 2026 ↗

•Our bitcoin lending and other digital asset management activities expose us to credit, market, liquidity and operational risks, and a material portion of our bitcoin holdings is subject to these risks;

Read in the 10-K filed Mar 2, 2026 ↗

•During periods of market stress and extreme volatility, we may be unable to timely liquidate or hedge our bitcoin or related positions, and exchange-driven liquidations or auto-deleveraging could materially and adversely affect our liquidity, results of operations and financial condition;

Read in the 10-K filed Mar 2, 2026 ↗

•Our expansion into AI and HPC may divert resources from our core Bitcoin mining operations, limit our power capacity for mining, and introduce operational complexity;

Read in the 10-K filed Mar 2, 2026 ↗

Our bitcoin lending and other digital asset management activities expose us to credit, market, liquidity and operational risks, and a material portion of our bitcoin holdings is subject to these risks.

Read in the 10-K filed Mar 2, 2026 ↗

We generate income through bitcoin lending arrangements. As of December 31, 2025, approximately 9,377 bitcoin were loaned to third parties under such arrangements, representing a material portion of our total bitcoin holdings. Lending bitcoin involves significant counterparty credit risk, particularly in a highly volatile market. Our lending counterparties are not rated by nationally recognized statistical rating organizations and are not investment-grade institutions. Although we conduct internal credit evaluations and monitoring, these processes may not accurately assess a counterparty’s financial condition or ability to perform its obligations.

Read in the 10-K filed Mar 2, 2026 ↗

Borrowers may fail to repay their loans due to market downturns, liquidity constraints, fraud, operational failures or other financial challenges. Because our bitcoin loans are generally unsecured, they would rank subordinate to secured indebtedness if a borrower became insolvent. In the event of a default, bankruptcy or other adverse event affecting a counterparty, we may be unable to recover a portion or all of the loaned bitcoin, which could result in substantial losses and materially and adversely affect our financial condition and results of operations.

Read in the 10-K filed Mar 2, 2026 ↗

During periods of market stress and extreme volatility, we may be unable to timely liquidate or hedge our bitcoin or related positions, and exchange-driven liquidations or auto-deleveraging could materially and adversely affect our liquidity, results of operations and financial condition.

Read in the 10-K filed Mar 2, 2026 ↗

Our business model depends, in part, on our ability to sell bitcoin to fund operating expenses and capital investments and, as applicable, to manage risk through trading and hedging activities. In stressed markets, the ability to execute routine spot sales, reduce positions, or hedge exposure can be impaired by exchange outages, degraded market quality, fragmented liquidity, or exchange risk controls that limit trading. Periods of acute volatility can cause order books to thin rapidly as market makers withdraw, spreads widen, and prices dislocate across venues. At the same time, certain centralized exchanges may experience interface failures, throttling of order intake, rejection of “reduce-only” or risk reducing orders, delayed deposits and withdrawals, and other infrastructure constraints. In these conditions, we may be unable to sell bitcoin or adjust hedges at intended sizes or prices, or at all, precisely when we need liquidity most.

Read in the 10-K filed Mar 2, 2026 ↗

If we are unable to sell bitcoin, unwind positions, or establish or maintain hedges during such periods, our liquidity could be adversely affected and our exposure to further price movements could increase. Our reliance on third-party exchanges and intermediaries and the concentration of liquidity in a limited number of venues may further limit our ability to respond quickly to market stress. Any of the foregoing could materially and adversely affect our results of operations, cash flows and financial condition, including by increasing realized losses, delaying planned sales of bitcoin, or reducing our capacity to fund operating or capital needs.

Read in the 10-K filed Mar 2, 2026 ↗

We compete in the highly competitive market for certain operational aspects of our Bitcoin mining business, including, but not limited to, the acquisition of new miners, obtaining low-cost electricity, obtaining clean energy sources, obtaining access to energy sites with reliable sources of power and evaluating new technology developments in the industry. Evolving industry standards, rapid price changes and product obsolescence impact the market and its various participants, including us. Our competitors include many domestic and foreign companies, many of which have substantially greater financial, marketing, personnel and other resources than we do, which may cause us to be at a competitive disadvantage. The success of our Bitcoin mining business will be dependent upon our

Read in the 10-K filed Mar 2, 2026 ↗

In February 2026, our wholly owned subsidiary entered into a Strategic Agreement with Starwood to develop, lease and market a specified list of our existing U.S. bitcoin mining data centers (excluding properties held in existing third-party joint ventures). The arrangement contemplates the achievement of specified triggers, such as the procurement of an executable lease with a qualifying hyperscaler tenant, followed by an election by each party whether to proceed with development. A decision is required within 24 months after closing (subject to a potential 12-month extension if Starwood is engaged in active bona fide negotiations with at least one hyperscaler tenant), even if the specified triggers have not been achieved, and Starwood may determine at any time that development of a property is not commercially feasible. There can be no assurance that required milestones will be achieved within the contemplated timeframes, on acceptable terms, or at all.

Read in the 10-K filed Mar 2, 2026 ↗

If Starwood elects to proceed with development of a property after procuring a qualifying lease and we elect not to proceed, we will be required to sell our rights to the powered land at the applicable asset to Starwood, which could require us to dispose of valuable property interests at a time or on terms that we would not otherwise choose. In addition, following a specified lock-out period, either party may have the right to force the sale of a joint venture property, subject to a right of first offer in favor of the other party. The exercise of such rights could result in asset dispositions at times that do not align with our preferred investment horizon or prevailing market conditions. Moreover, although we expect either to continue our Bitcoin mining operations at applicable properties pursuant to a rent-free lease or to be compensated to relocate, development activities or relocation could result in operational disruptions, downtime, increased costs or loss of mining capacity. As a result of these and other factors, the Strategic Agreement may not achieve its intended objectives and could have a material adverse effect on our business, financial condition and results of operations.

Read in the 10-K filed Mar 2, 2026 ↗

Our expansion into AI and HPC may divert resources from our core Bitcoin mining operations, limit our power capacity for mining, and introduce operational complexity.

Read in the 10-K filed Mar 2, 2026 ↗

While we intend to continue our Bitcoin mining operations, the allocation of resources to support AI and HPC development may reduce the capital, personnel, infrastructure and power capacity available for our mining business. In particular, the diversion of power capacity to AI and HPC workloads may limit our ability to deploy that power for Bitcoin mining, which is a highly competitive and capital-intensive industry. As a result, we may be unable to expand our deployed hashrate at the pace of our competitors, potentially diminishing our market share and profitability. Expanding into AI and HPC may also increase operational complexity and place additional demands on our management, technical and support teams, which could negatively affect our overall performance, strategic execution and profitability.

Read in the 10-K filed Mar 2, 2026 ↗

This business expansion introduces uncertainties that could impact our liquidity and capital resources. Increased capital expenditure requirements for new AI, HPC and data center infrastructure projects may accelerate cash deployment and increase short-term liquidity needs. The timing of cash inflows may shift, as hosting and leasing revenues generally materialize after construction completion and customer onboarding, resulting in a lag between capital investment and revenue realization. We may need to seek additional financing through debt, equity, or infrastructure-oriented funding to meet project-scale capital demands or to preserve bitcoin holdings during periods of market volatility.

Read in the 10-K filed Mar 2, 2026 ↗

The legal landscape for digital assets remains uncertain, and third parties may assert intellectual property claims related to blockchain technology, digital asset transactions, mining processes or source code. For example, in May 2025, Malikie Innovations Ltd., a non-practicing entity, filed a lawsuit against us in the United States District Court for the Western District of Texas alleging that our Bitcoin mining operations infringe certain patents relating to cryptographic technologies used in the Bitcoin network. We have filed motions to dismiss certain claims, petitions for ex parte reexamination of the asserted patents with the United States Patent and Trademark Office, and a motion to stay the litigation pending the outcome of those reexaminations. The litigation remains ongoing.

Read in the 10-K filed Mar 2, 2026 ↗

Digital asset networks are open-source projects and, although there is an influential group of leaders in, for example, the Bitcoin network community known as the “Core Developers,” there is no official developer or group of

Read in the 10-K filed Mar 2, 2026 ↗

Although bitcoin is currently widely regarded as a commodity and is regulated as such by the Commodity Futures Trading Commission, future legislative, regulatory or judicial developments could alter its legal classification. If bitcoin were determined to constitute a “security” under the Securities Act of 1933, as amended (the “Securities Act”) or other federal securities laws, our activities involving bitcoin, including mining, holding and disposition, could become subject to additional regulatory requirements.

Read in the 10-K filed Mar 2, 2026 ↗

Such a determination could affect the operation of bitcoin trading platforms, custodians and other market participants on which we rely, and could impose new compliance obligations on us. In addition, if bitcoin were deemed to be a security and we were determined to be engaged primarily in the business of investing, reinvesting or trading in securities, or if we were deemed to hold “investment securities” in excess of applicable thresholds, we could be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), unless an exclusion were available. Registration under the Investment Company Act would subject us to substantial regulation and compliance requirements, which could materially increase our operating costs and restrict our business activities.

Read in the 10-K filed Mar 2, 2026 ↗

State securities regulators may also take positions regarding the classification of digital assets under state law that differ from federal interpretations, which could subject us to additional regulatory requirements.

Read in the 10-K filed Mar 2, 2026 ↗

Bitcoin trading venues operate under varying regulatory regimes, and in some jurisdictions may be subject to limited oversight, inconsistent disclosure requirements or evolving regulatory standards. Governance, transparency, internal controls and risk management practices differ significantly across trading platforms. As a result, confidence in bitcoin markets could decline if prominent exchanges experience fraud, insolvency, cybersecurity incidents, operational failures or government-imposed restrictions.

Read in the 10-K filed Mar 2, 2026 ↗

Moreover, our Bitcoin mining, AI or HPC operations may be negatively impacted by new land use and property laws, regulations or taxes enacted by state or local governments. Governmental authorities have and may continue to pursue and implement legislation and regulation that seeks to limit greenhouse gas emissions and noise generated by our facilities, which could adversely affect our ability to source electricity, mine Bitcoin or provide AI inference in a potentially material manner.

Read in the 10-K filed Mar 2, 2026 ↗

non-governmental organizations, and other actors related to the energy resources consumed in the bitcoin mining process; and (v) activities relating to other cryptocurrencies, including “meme coins”;

Read in the 10-K filed Feb 19, 2026 ↗

•developments affecting other companies pursuing a bitcoin strategy similar to ours, such as the abandonment of the strategy by such other companies, the failure by such other companies to satisfy their debt or other financial obligations, market concerns as to the viability or creditworthiness of such other companies, the loss or disposition of substantial bitcoin by such other companies, regulatory or legal judgments or actions against such other companies due to their adoption of a bitcoin strategy, or any other similar actions or negative outcomes impacting such other companies, whether due to any of the various risk factors described herein or for any other reason;

Read in the 10-K filed Feb 19, 2026 ↗

•in September 2025, Nasdaq reportedly announced new informal interpretations of its rules that require certain Nasdaq-listed companies to obtain shareholder approval before engaging in certain transactions, such as private placements for the purpose of acquiring digital assets or accepting in-kind contributions of digital assets in exchange for equity;

Read in the 10-K filed Feb 19, 2026 ↗

•in July 2025, President Trump signed into law the Guiding and Establishing National Innovation for US Stablecoins Act (“GENIUS Act”), establishing a legislative framework for the regulation of payment stablecoins and marking the first federal legislation for the regulation of digital assets in the U.S.;

Read in the 10-K filed Feb 19, 2026 ↗

Although the complaints against Coinbase, Inc., Payward Inc., Payward Ventures Inc. and Binance Holdings Ltd. have been dismissed, the SEC, CFTC, foreign governments, states, or other regulatory agencies may initiate similar actions in the future, which could materially affect the price of bitcoin and our ability to own or transfer bitcoin.

Read in the 10-K filed Feb 19, 2026 ↗

It is not possible to predict whether or when new laws and regulations will change the legal framework governing digital assets or expand the authority of the SEC, the CFTC, or other regulators, or whether or when any other federal, state or foreign bodies will take similar actions. For example, the proposed CLARITY Act discussed above could, if it became law, grant the CFTC additional regulatory and supervisory powers with respect to spot digital assets, including bitcoin, as “digital commodities” and potentially impose additional registration, disclosure, reporting, and business conduct requirements on us. In addition, we cannot predict the nature or market effects of any future laws or expansion of oversight, including the impacts to the functioning of digital asset markets, the willingness of financial and other institutions to provide services to the digital assets industry, or the value of digital assets generally and bitcoin specifically. The consequences of any new legal requirements relating to digital assets could adversely affect the market price of bitcoin and our ability to hold or transact in bitcoin, and in turn adversely affect our business, financial condition and results of operations, and the market price of our listed securities. Furthermore, as more companies adopt strategies with respect to bitcoin or digital assets similar to ours, governments and regulatory agencies may be prompted to enact new laws, regulations, or interpretations, which may adversely affect our bitcoin strategy.

Read in the 10-K filed Feb 19, 2026 ↗

Bitcoin has no physical existence beyond the record of transactions on the Bitcoin blockchain. As a result, factors such as malicious attacks by miners, inadequate mining fees to incentivize validation of bitcoin transactions, hard “forks” of the Bitcoin blockchain into multiple blockchains, and advances in digital computing, algebraic geometry, and quantum computing could undermine the integrity of the Bitcoin blockchain and negatively affect the price of bitcoin and, in turn, our business, financial condition, results of operations, and the trading price of our listed securities.

Read in the 10-K filed Feb 19, 2026 ↗

Additionally, other companies have recently adopted bitcoin strategies similar to ours, providing investors with further potential alternative means of gaining exposure to bitcoin. Fund sponsors also offer bitcoin futures exchange-traded funds (“ETFs”) and leveraged bitcoin futures ETFs, which offer different types of economic exposure to bitcoin. Based on how we are viewed in the market relative to ETPs, other companies that have adopted a strategy similar to ours with respect to bitcoin, bitcoin futures ETFs, leveraged bitcoin futures ETFs, and similar vehicles, any premium or discount in our class A common stock relative to the value of our bitcoin holdings may increase or decrease differently than that of such other vehicles in response to changes in market conditions. Although our listed securities also include preferred stocks, which provide investors with economic exposure to bitcoin and the opportunity to earn dollar- or Euro- denominated yield returns, to the extent that investors are seeking an investment with exposure to bitcoin and a dollar- or Euro- denominated yield return, investors may choose to allocate to certain funds that pursue yield-based strategies based on trading derivatives of our class A common stock or bitcoin rather than purchasing our preferred stocks, as the former may, from time to time, produce higher yields than our preferred stock.

Read in the 10-K filed Feb 19, 2026 ↗

In November 2025, we issued STRE Stock, which is a Euro-denominated preferred stock instrument listed for trading on the Official List of the Luxembourg Stock Exchange and the Euro MTF market of the Luxembourg Stock Exchange. As a result of such listing, we are subject to certain disclosure and other requirements under applicable EU regulations. We intend to continue to seek access to non-U.S. capital markets, list or admit our securities to trading on additional foreign exchanges, or otherwise expand the distribution of our securities in foreign jurisdictions, and we may become subject to additional regulatory oversight, disclosure obligations, conduct requirements and review of our bitcoin strategy and digital asset activities in those jurisdictions. Any such additional non-U.S. regulatory oversight could increase our compliance and reporting costs, constrain our flexibility in implementing our bitcoin strategy, or otherwise adversely affect our business, financial condition and results of operations.

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Negative perception, a lack of stability in the broader bitcoin markets and the closure, temporary shutdown or operational disruption of bitcoin trading venues, lending institutions, institutional investors, institutional miners, custodians, or other

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Historically, the bitcoin 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

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Further, the bitcoin that we hold with our custodians and transact with our trade execution partners does 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.

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•changes to or failure by us to meet our targets or published guidance for our bitcoin strategy, capital plan, and financial results;

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We are subject to a putative class action lawsuit (related to the certificate of amendment we filed on July 7, 2025 with the Secretary of State of Delaware to the STRK Stock certificate of designations) in which our board of directors are also defendants (the “Dodge Class Action”). See “Commitments and Contingencies – Shareholder Action” in Note 9 and Note 12, “Redeemable Preferred Stock”, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report for additional information. If the Dodge Class Action is concluded in a manner adverse to us and we ultimately incur substantial costs or damages not covered by our directors’ and officers’ liability insurance, such an outcome could have a material adverse effect on our financial condition and business. We have also previously been subject to other stockholder actions alleging deficiencies in our disclosure with respect to the anticipated profitability of our bitcoin-focused investment strategy and treasury operations, and the various risks associated with bitcoin’s volatility, though such actions were voluntarily dismissed without the payment of any settlement amounts or any adverse judgments against us. The Dodge Class Action (and any other future stockholder litigation matters) could adversely impact our reputation and divert management’s attention and resources from other priorities, including the execution of our bitcoin strategy, which could have a material adverse effect on our business.

Read in the 10-K filed Feb 19, 2026 ↗

Index providers and other benchmark administrators may adopt, modify or interpret eligibility criteria or methodology changes in ways that limit or exclude us from their published indices or benchmarks. Such changes may be made at their discretion and with little or no advance notice or opportunity for consultation. For example, in October 2025, MSCI, Inc. (“MSCI”) announced a proposal to exclude from the MSCI Global Investable Market Indexes ("MSCI Indexes") companies whose primary business involves bitcoin or other digital asset treasury activities and whose digital asset

Read in the 10-K filed Feb 19, 2026 ↗

Despite our current intention, which is to adjust the monthly regular dividend rate per annum in such a manner as we believe will maintain STRC Stock’s trading price at or close to its stated amount of $100 per share, since we are permitted to exercise our right to adjust the monthly regular dividend rate per annum for any reason, the trading price of STRC Stock could be significantly volatile. For example, we could choose to adjust the monthly regular dividend rate per annum for reasons not directly related to the fair market value of our bitcoin holdings, the credit spreads on our other debt and preferred stock instruments, or the interest rate environment. Accordingly, the trading profile of our STRC Stock could be significantly different than that of our other securities or other securities with variable dividend or interest rate features.

Read in the 10-K filed Feb 19, 2026 ↗

We are shifting our business strategy from healthcare operations to a Bitcoin company with a Bitcoin treasury, which represents a fundamental change in our risk profile and may not be successful.

Read in the 10-K filed Mar 30, 2026 ↗

Prior to 2026, our primary business focus was on healthcare operations, in particular patient-centered holistic pain management medical services. In connection with our merger with Nakamoto Holdings, Inc., we added Bitcoin treasury operations to our business strategy, though our healthcare operations remained our core business. Then, in early 2026, we changed our name from Kindly MD, Inc. to Nakamoto Inc. to represent the pivot in our corporate strategy to focus on the acquisition and holding of Bitcoin as our primary treasury reserve asset. Following this pivot, we subsequently completed both the BTC Merger and UTXO Merger to support this shift in business strategy, as those companies are also in the Bitcoin ecosystem. Further, the Company now intends to exit its legacy healthcare business. This transition in business strategy and operations involves several risks:

Read in the 10-K filed Mar 30, 2026 ↗

Abandonment of Established Revenue Streams: By exiting our healthcare business, we are moving away from industry-specific revenue streams that provided a degree of predictability. Our future financial performance will now be primarily driven by the market price of Bitcoin, which is notoriously volatile and subject to factors entirely outside our control, and the performance of our Bitcoin-related operations, which may also be positively or negatively impacted by the price of Bitcoin. Legacy Liabilities: Despite our pivot, we may be subject to potential “tail” liabilities related to our former healthcare operations, including potential medical malpractice claims, HIPAA data breach liabilities, or clinical trial disputes. The costs associated with defending or settling these legacy claims could diminish the cash reserves we intend to allocate toward our Bitcoin strategy. Investor Base Misalignment: Investors who purchased our stock for exposure to the healthcare sector may sell their shares as a result of this strategy shift, leading to increased downward pressure on our Common Stock price and heightened volatility during the transition period. Execution Risk: We may be unable to successfully divest or liquidate our remaining healthcare assets at favorable valuations, which could limit our ability to execute our Bitcoin acquisition targets on our planned timeline.

Read in the 10-K filed Mar 30, 2026 ↗

Our Bitcoin strategy exposes us to various risks, including risks associated with Bitcoin.

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Bitcoin is a highly volatile asset. Bitcoin is a highly volatile asset that has traded below $61,000 per Bitcoin and above $125,000 per Bitcoin on the Coinbase exchange (a major U.S.-based crypto exchange) (“Coinbase”) in the 12 months preceding the date of this Annual Report on Form 10-K. The trading price of Bitcoin significantly decreased during prior periods, and such declines may occur again in the future. For example, the price of Bitcoin declined by approximately 77%, from a high of about $69,000 in November 2021 to approximately $16,000 in November 2022, before increasing by more than 300% to over $65,000 in March 2024. As of October 6, 2025, the price of Bitcoin was approximately $125,000, and as of February 5, 2026, the price of Bitcoin was approximately $60,000. These price swings illustrate the substantial fluctuations Bitcoin may experience over short and long time periods, and future performance may differ materially from past results.

Read in the 10-K filed Mar 30, 2026 ↗

Bitcoin is a relatively new asset class with a limited history. Bitcoin is a digital asset that was introduced in 2009 and remains in the early stages of adoption compared to traditional currencies and assets. It lacks a long track record of performance and is subject to rapidly evolving regulatory, technological, and economic conditions. Unlike fiat currencies such as the U.S. Dollar or Euro, Bitcoin is not formally recognized legal tender in most jurisdictions and is not supported by any sovereign authority or central bank. This lack of governmental backing could diminish confidence in Bitcoin’s long-term viability and increase volatility and speculative risk.

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Bitcoin is reliant on relatively new computer technology. Bitcoin operates through a decentralized, peer-to-peer network of computers using open-source software to verify and record transactions on a public ledger known as the Bitcoin blockchain. The absence of a central governing authority means that Bitcoin is reliant on the continued operation and integrity of this decentralized network. Bitcoin may be subject to changes in its underlying blockchain protocol, including “hard forks,” which result in divergent versions of the blockchain and potentially new digital assets. There is no assurance that we will be able to claim, access, or benefit from such forks or other developments, and there may be legal, technical, or operational uncertainties associated with them.

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Bitcoin does not pay interest or dividends. Bitcoin does not pay interest or other returns and we can only generate cash from our Bitcoin holdings if we sell our Bitcoin or implement strategies to create income streams or otherwise generate cash by using our Bitcoin holdings. Even if we pursue any such strategies, we may be unable to create income streams or otherwise generate cash from our Bitcoin holdings, and any such strategies may subject us to additional risks.

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Our Bitcoin holdings may significantly impact our financial results and the market price of our listed securities. Our Bitcoin holdings may significantly affect our financial results. If we increase our overall holdings of Bitcoin in the future, our Bitcoin holdings may have an even greater impact on our financial results and the market price of our listed securities.

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Our assets are concentrated in Bitcoin. The vast majority of our assets are concentrated in our Bitcoin holdings. The concentration of our assets in Bitcoin may limit our ability to mitigate risk that could otherwise be achieved by holding a more diversified portfolio of treasury assets.

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We may purchase Bitcoin using proceeds from equity and debt financings or from operations. Our ability to achieve the objectives of our Bitcoin strategy depends in significant part on the profitability of our operating businesses and our ability to obtain equity and debt financing. If our businesses are not profitable or 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 Bitcoin strategy.

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We will likely need to purchase Bitcoin from a limited number of exchanges or dealers. Bitcoin markets rely on a limited number of exchanges and dealers for liquidity. If these counterparties suspend withdrawals, become insolvent, or experience technical outages, we may not be able to sell Bitcoin when needed, regardless of market prices.

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Our Bitcoin strategy has not been tested over an extended period or under various market conditions. We implemented a Bitcoin strategy following the closing of the merger by and among Nakamoto Holdings Inc., Kindly Holdco Corp., and Kindly MD, Inc. (the “Nakamoto Merger”). We intend to continually examine the risks and rewards of our strategy to acquire and hold Bitcoin. Our strategy has not been tested over an extended period or under various market conditions. For example, we believe Bitcoin, due to its fixed supply, has the potential to serve as a hedge against inflation in the long term. However, if Bitcoin prices were to decrease or our Bitcoin strategy otherwise proves unsuccessful, our financial condition, results of operations, and the market price of our listed securities would be materially adversely impacted.

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We are subject to counterparty risks related to exchanges, custodians, and other digital asset industry participants. We intend to purchase Bitcoin through a limited number of exchanges or dealers such as Payward Interactive, Inc., a Florida corporation doing business as Kraken (“Kraken”), Anchorage Digital and Coinbase, which we believe are reputable. If these counterparties suspend withdrawals, become insolvent, or experience technical outages, we may not be able to sell Bitcoin when needed. We have implemented measures designed to mitigate counterparty risks, including purchasing Bitcoin through reputable U.S.-based exchanges, storing substantially all Bitcoin with institutional-grade custodians, and negotiating contractual arrangements to protect our property interests. 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, Office of Foreign Assets Control and know-your customer 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. However, custodial arrangements for digital assets are not as well-established as those for traditional assets, and our ability to enforce claims against custodians in bankruptcy is uncertain. If our custodially-held Bitcoin were considered property of our custodians’ estates in insolvency proceedings, we could be treated as a general unsecured creditor, potentially resulting in loss of value. The broader digital assets industry has experienced high-profile bankruptcies, closures, and regulatory enforcement actions that have negatively impacted adoption rates and created additional counterparty risks.

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Changes in the accounting treatment of our Bitcoin holdings could have significant accounting impacts, including increasing the volatility of our results. Accounting Standards Update (“ASU”) 2023-08 requires us to measure our Bitcoin holdings at fair value in our statement of financial position, and to recognize gains and losses from changes in the fair value of its Bitcoin holdings in net income each reporting period. ASU 2023-08 requires us to provide certain interim and annual disclosures with respect to our Bitcoin holdings. Due in particular to the volatility in the price of Bitcoin, the adoption of ASU 2023-08 could have a material impact on our financial results, increase the volatility of our financial results, and affect the carrying value of our Bitcoin holdings on our balance sheet. ASU 2023-08 could also have adverse tax consequences. These impacts could in turn have a material adverse effect on our financial results and the market price of our listed securities.

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Bitcoin is a highly volatile asset, and our operating results and market price may significantly fluctuate due to the highly volatile nature of the price of Bitcoin and erratic market movements.

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Bitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin are likely to influence our financial results and the market price of our listed securities, including having the potential to amplify our market price volatility relative to the price of Bitcoin. Our financial results and the market price of our listed securities would be adversely affected, and our business and financial condition would be negatively impacted, if the price of Bitcoin decreased substantially (as it has in the past), including as a result of:

Read in the 10-K filed Mar 30, 2026 ↗

decreased user and investor confidence in Bitcoin, including due to the various factors described herein; investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, miners and investors; (ii) actual or expected significant dispositions of Bitcoin by large holders, including the expected liquidation of digital assets associated with entities that have filed for bankruptcy protection and the transfer and sale of Bitcoins associated with significant hacks, seizures, or forfeitures; and (iii) actual or perceived manipulation of the spot or derivative markets for Bitcoin or spot Bitcoin ETPs; negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, Bitcoin or the broader digital assets industry, for example, (i) public perception that Bitcoin can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities; (ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major participants in the Bitcoin ecosystem; (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading Ltd. (“FTX Trading”) and its affiliates; and (iv) the actual or perceived environmental impact of Bitcoin and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the Bitcoin mining process; changes in consumer preferences and the perceived value or prospects of Bitcoin; competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets; since stablecoins are often used as a medium of exchange for Bitcoin purchases, a stablecoin’s substantial deviation from its intended peg or an unavailability of stablecoins may cause a decrease in the price of Bitcoin or adversely affect investor confidence in digital assets generally; developments relating to the Bitcoin protocol, including (i) changes to the Bitcoin protocol that impact its security, speed, scalability, usability, or value, such as changes to the cryptographic security protocol underpinning the Bitcoin blockchain, changes to the maximum number of Bitcoin outstanding, changes to the mutability of transactions, changes relating to the size of blockchain blocks, and similar changes, (ii) failures to make upgrades to the Bitcoin protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the Bitcoin protocol that introduce software bugs, security risks or other elements that adversely affect Bitcoin; disruptions, failures, unavailability, or interruptions in service of trading venues for Bitcoin, such as, for example, the announcement by the digital asset exchange FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy protection and the SEC enforcement action brought against Binance Holdings Ltd. (“Binance”), which was subsequently dismissed by the district court judge upon a joint request filed by the SEC and Binance on May 29, 2025;

Read in the 10-K filed Mar 30, 2026 ↗

the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, exchanges, trading venues, lending platforms, investment funds, or other digital asset industry participants, such as the filing for bankruptcy protection by digital asset trading venues FTX Trading and BlockFi and digital asset lending platforms Celsius Network and Voyager Digital Holdings in prior years, and the prior exit of Binance from the U.S. market as part of its settlement with the Department of Justice and other federal regulatory agencies; regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of Bitcoin, or that adversely affect the operations of or otherwise prevent digital asset custodians, exchanges, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry; further reductions in mining rewards of Bitcoin, including reductions due to block reward halving events, which are events that occur after a specific period of time that reduce the block reward earned by “miners” who validate Bitcoin transactions (the most recent reduction in mining rewards occurred in April 2024), which may cause a decline in support for the Bitcoin network; increases in the costs associated with Bitcoin mining, including increases in electricity costs and hardware and software used in mining, or new or enhanced regulation or taxation of Bitcoin mining, which could further increase the costs associated with Bitcoin mining, any of which may cause a decline in support for the Bitcoin network; transaction congestion and fees associated with processing transactions on the Bitcoin network; macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations; developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography used by the Bitcoin blockchain becoming insecure or ineffective; and changes in national and international economic and political conditions, including, without limitation, federal government policies, trade tariffs and trade disputes, the adverse impacts attributable to the current conflict between Russia and Ukraine and the economic sanctions adopted in response to the conflict, and the broadening of the Israel-Hamas conflict to other countries in the Middle East.

Read in the 10-K filed Mar 30, 2026 ↗

We face significant competition from companies with Bitcoin strategies and from spot Bitcoin ETPs.

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We face competition from other public companies with Bitcoin holdings and similar strategies, as well as spot exchange traded products (ETPs) that provide direct Bitcoin exposure. Many competitors have greater financial resources, more established operating histories, and broader access to capital markets. The SEC’s approval of spot Bitcoin ETPs in January 2024 (and spot Ether ETPs in May 2024) provides investors with alternatives that may be perceived as offering “pure play” exposure to Bitcoin without the risks of an operating business or entity-level taxation. Investors may choose ETPs over our Common Stock, potentially affecting demand and creating premium or discount volatility relative to our Bitcoin holdings. Unlike ETPs, we do not seek to track the value of underlying Bitcoin, do not benefit from certain Exchange Act exemptions, and are not required to provide daily transparency. Increased competition may lead to downward pressure on our Common Stock price and impair our ability to achieve strategic objectives.

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The tax treatment of Bitcoin and other digital assets is subject to significant uncertainty and evolving guidance from U.S. federal, state, and local tax authorities, as well as foreign tax authorities. Changes in tax laws, regulations, or interpretations could have a material impact on our business, including our ability to acquire, hold, or dispose of Bitcoin in a tax-efficient manner. For example, future legislation or regulatory guidance could result in the imposition of new or increased taxes on the acquisition, holding, or transfer of Bitcoin, or could require us to report additional information to tax authorities. In addition, differences in the tax treatment of digital assets across jurisdictions could create compliance challenges and increase our administrative and operational costs. Any adverse developments in the tax treatment of digital assets could reduce the attractiveness of our business model, increase our tax liabilities, and negatively affect our financial results and the value of our stock.

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The tax treatment of Bitcoin network forks, airdrops, and similar events is uncertain and could result in unexpected tax liabilities.

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The Bitcoin network may undergo “hard forks” that result in the creation of new digital assets, and we may receive “airdrops” of new tokens or digital assets as a result of our Bitcoin holdings. The U.S. federal income tax treatment of forks and airdrops is uncertain and evolving. The IRS has issued limited guidance indicating that receipt of new cryptocurrency from an airdrop generally results in taxable income equal to the fair market value of the new cryptocurrency at the time of receipt. However, significant uncertainty remains regarding the timing of income recognition, the determination of fair market value (particularly for newly created assets with limited trading history), the tax treatment of assets received from contested or contentious forks, and the treatment of forked or airdropped assets that we are unable to access or choose not to claim. We may be required to recognize taxable income from forks or airdrops even if we do not sell the new assets, which could create cash tax liabilities without corresponding liquidity. In addition, tracking the cost basis and holding periods of forked or airdropped assets can be complex, and errors or uncertainties in our tax reporting could result in penalties or additional tax liabilities. Changes in IRS guidance or tax law, or successful challenges by the IRS to our tax positions, could result in material adverse tax consequences.

Read in the 10-K filed Mar 30, 2026 ↗

Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.

Read in the 10-K filed Mar 30, 2026 ↗

Bitcoin and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to Bitcoin and other digital assets is unclear in certain respects, and 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 Bitcoin or the ability of individuals or institutions such as us to own or transfer Bitcoin.

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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 Bitcoin or the ability of individuals or institutions such as us to own or transfer Bitcoin. For example, within the past several years:

Read in the 10-K filed Mar 30, 2026 ↗

President Trump signed an executive order instructing a working group comprised of representatives from key federal agencies to evaluate measures that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries; the SEC’s Staff Accounting Bulletin No. 122, which rescinded Staff Accounting Bulletin No. 121, directs certain entities to evaluate and account for potential losses from safeguarding crypto assets using existing generally accepted accounting principles in the United States (“GAAP”) or IFRS guidance. It also emphasizes the importance of continued disclosures related to these obligations; the SEC has proposed changes to the SEC Custody Rule, which may require, if adopted, that public companies store their Bitcoin with a “qualified custodian,” which are typically banks, trust companies, or regulated broker-dealers that meet strict asset segregation and safeguarding standards; the European Union adopted Markets in Crypto Assets Regulation, a comprehensive digital asset regulatory framework for the issuance and use of digital assets, like Bitcoin; in June 2023, the United Kingdom adopted and implemented the Financial Services and Markets Act 2023, which regulates market activities in “cryptoassets”; in China, the People’s Bank of China and the National Development and Reform Commission have outlawed cryptocurrency mining and declared all cryptocurrency transactions illegal within the country. Other jurisdictions, including Egypt, Morocco and the Dominican Republic, have also made the use of Bitcoin illegal. If the use of Bitcoin is made illegal in other jurisdictions, particularly where Bitcoin is currently traded in heavy volumes, the available market for Bitcoin may contract. Additionally, if another government with considerable economic power were to ban digital assets or related activities, this could have further impact on the price of Bitcoin. As a result, the markets and opportunities discussed herein may not reflect the markets and opportunities available to us in the future.

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Since 2018, the SEC has initiated a number of crypto and digital-asset-related enforcement actions. While the SEC has since requested the dismissal of several of these cases, the SEC or other regulatory agencies may initiate similar actions in the future, which could materially impact the price of Bitcoin and our ability to own or transfer Bitcoin. In January 2025, the SEC launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets. Since then, the task force has sought written input and hosted roundtables with market participants to further task force goals of drawing clear regulatory lines, providing paths to registration, crafting disclosure frameworks, and deploying enforcement resources judiciously. We cannot predict the output of the new crypto task force or whether any recommendations will be adopted by the SEC or maintained under future administrations.

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It is not possible to predict whether, or when, new laws will be enacted that change the legal framework governing digital assets or provide additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact the value of digital assets generally and Bitcoin specifically. The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of Bitcoin, as well as our ability to hold or transact in Bitcoin, and in turn adversely affect the market price of our listed securities.

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Moreover, the risks of engaging in a Bitcoin treasury strategy are relatively novel and 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.

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The growth of the digital assets industry in general, and the use and acceptance of Bitcoin in particular, may also impact the price of Bitcoin and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of Bitcoin may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to Bitcoin, institutional demand for Bitcoin as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for Bitcoin as a store of value or means of payment, and the availability and popularity of alternatives to Bitcoin. Even if growth in Bitcoin adoption occurs in the near or medium-term, there is no assurance that Bitcoin usage will continue to grow over the long-term.

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The liquidity of Bitcoin may also be reduced and damage to the public perception of Bitcoin may occur if financial institutions were to deny or limit banking services to businesses that hold Bitcoin, provide Bitcoin-related services or accept Bitcoin as payment, which could also decrease the price of Bitcoin. The liquidity of Bitcoin may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for Bitcoin and other digital assets.

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The concentration of Bitcoin ownership and market dynamics may create additional risks.

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A significant portion of Bitcoin supply is held by a small number of holders, making the network more susceptible to manipulation. Malicious actors could potentially structure attacks to gain control of majority processing power, enabling double-spending, blocking transactions, or preventing valid new blocks. Unlike traditional securities markets, Bitcoin lacks a consolidated pricing mechanism, and prices can vary significantly across exchanges, creating opportunities for arbitrage or manipulation. The Bitcoin market may be susceptible to wash trading, spoofing, and other manipulative practices, particularly on unregulated exchanges. Bitcoin trading venues are relatively new and may experience fraud, security failures, or operational problems. Negative perception or instability in Bitcoin markets could result in a decline in confidence and greater price volatility, adversely affecting our Common Stock price.

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The emergence of competing digital assets and negative industry developments may adversely affect Bitcoin and our business.

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Various digital assets compete with Bitcoin, including alternative cryptocurrencies using different validation mechanisms (such as Ethereum’s proof-of-stake), stablecoins backed by fiat currencies, and central bank digital currencies (CBDCs) being developed by governments including China, the United States, the United Kingdom, and the European Union. If these alternatives are perceived as superior to Bitcoin, they could gain market share and decrease Bitcoin’s price. Additionally, the cryptocurrency industry has experienced high-profile negative developments including fraud, theft, Security Incidents, and platform failures. Negative publicity and heightened scrutiny of the industry could adversely impact investor sentiment toward us, even if we are not directly involved, potentially resulting in reduced stock demand, increased volatility, and difficulty raising capital.

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Our Bitcoin holdings may be less liquid than cash and may not serve as an adequate source of liquidity.

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The Bitcoin market has been characterized by significant volatility, limited liquidity and trading volumes compared to sovereign currency markets, and potential susceptibility to market abuse. During market instability, we may not be able to sell Bitcoin at favorable prices or at all. Bitcoin we hold with custodians will not enjoy the same protections as cash or securities deposited with Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation (“SIPC”) regulated institutions. We may be unable to enter into financing transactions collateralized by our Bitcoin or otherwise generate funds from holdings during market instability. The concentration of our assets in Bitcoin limits risk mitigation and any significant price declines could have a more pronounced impact than a diversified portfolio. Our direct Bitcoin holdings combined with investments in other companies maintaining Bitcoin as a treasury asset heighten our concentration in Bitcoin-related price risk, potentially magnifying losses and increasing result volatility.

Read in the 10-K filed Mar 30, 2026 ↗

Environmental, geopolitical, and operational factors may adversely affect our Bitcoin strategy.

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Bitcoin mining requires substantial electricity, and environmental concerns regarding Bitcoin’s carbon footprint have attracted regulatory and investor attention. ESG-mandated institutional investors may be restricted from investing in companies with significant Bitcoin holdings, reducing demand for our stock. The SEC has adopted climate-related disclosure requirements that may require reporting on environmental impacts of our Bitcoin holdings. Geopolitical developments and government actions could restrict our ability to hold, transfer, or transact in Bitcoin, or result in seizure or forfeiture of holdings. Law enforcement agencies have authority to seize Bitcoin associated with criminal activity, and although we implement compliance policies, there can be no assurance our Bitcoin will never be associated with illicit activity. Policy discussions regarding a U.S. Strategic Bitcoin Reserve could significantly affect Bitcoin markets and increase price volatility.

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We may be unable to obtain adequate insurance coverage or attract specialized personnel for our Bitcoin strategy.

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Insurance coverage for digital assets is limited and may not be available on commercially reasonable terms. The insurance market for digital asset risks is undeveloped, and insurers may be unwilling to provide coverage for theft, hacking, or fraud. Our Bitcoin strategy may increase costs or limit availability of directors and officers (“D&O”) insurance, errors and omissions (“E&O”) insurance, and cyber liability insurance. If we are unable to obtain adequate coverage, we could be exposed to significant uninsured losses. Additionally, successful execution of our strategy depends on attracting and retaining personnel with specialized expertise in digital assets, blockchain technology, and cryptocurrency custody. The market for such expertise is highly competitive, and if we are unable to attract, retain, or develop qualified personnel, our ability to manage holdings and respond to security threats could be materially impaired.

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If we utilize our Bitcoin holdings in DeFi protocols or other blockchain applications, we may be exposed to additional technological risks.

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We may utilize Bitcoin holdings in decentralized finance (“DeFi”) protocols, wrapped Bitcoin products, or other blockchain-based applications to generate yield or enhance liquidity. These activities would expose us to additional risks including smart contract vulnerabilities that could result in loss of Bitcoin. Smart contracts may contain bugs or design flaws exploitable by malicious actors. Wrapped Bitcoin and cross-chain bridge protocols have been targets of significant hacks resulting in billions of dollars in industry-wide losses. The DeFi ecosystem is largely unregulated and operates without traditional consumer protections. If we participate in DeFi protocols and experience losses due to smart contract failures, hacks, or protocol insolvency, we may have limited or no recourse to recover assets.

Read in the 10-K filed Mar 30, 2026 ↗

If we elect to use derivative instruments to hedge the price risk of holding Bitcoin, such derivatives are highly volatile and subject to market and liquidity risks, which could negatively impact our Bitcoin strategy.

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We have and may continue to invest and trade in a variety of derivative instruments to hedge the price risk associated with Bitcoin. Derivatives, such as futures and swaps, are financial instruments or arrangements in which the risk and return are related to changes in the value of other assets, reference rates or indices. These instruments are highly volatile and expose investors to a high risk of loss. The low initial margin deposits normally required to establish a position in such instruments permit a high degree of leverage. As a result, depending on the type of instrument, a relatively small movement in the price of a contract may result in a profit or a loss which is high in proportion to the amount of funds actually placed as initial margin and may result in unquantifiable further loss exceeding any margin deposited. Our ability to profit or avoid risk through investment or trading in derivatives will depend on our ability to anticipate changes in the underlying assets, reference rates or indices. Engaging in hedging may result in poorer overall performance for us than we could have achieved had we not engaged in such hedging transactions. In addition, although we may utilize a variety of instruments, including options and other derivatives, for hedging and risk management purposes, we are not obligated to, and may not, hedge against certain risks. Furthermore, our portfolio may be exposed to risks that cannot be hedged. Use of hedging and risk management products may also increase our regulatory burden and costs of compliance.

Read in the 10-K filed Mar 30, 2026 ↗

On January 30, 2026, we entered into that certain First Amendment to the Master Loan Agreement, which amends that certain Master Loan Agreement, dated as of December 3, 2025 (the “Master Loan Agreement”), by and between Nakamoto Holdings, Inc. and Kraken to establish a designated trading wallet for an options-writing strategy on Bitcoin, including selling covered calls and cash-secured puts (the “Kraken Trading Wallet”). Options are complex instruments and can behave like leveraged instruments. There can be no assurance that the Kraken Trading Wallet will achieve its investment objectives, and substantial investment losses are possible. Losses may exceed the Kraken Trading Wallet’s assets. As a result, losses may occur rapidly and may be magnified by volatility, liquidity constraints, and margin requirements. The strategy may not perform as expected in stressed markets or when market conditions differ from those historically observed. In particular, volatility and changes in the price of Bitcoin (including outside of U.S. trading hours) may overwhelm financial risk mitigation models, and sudden changes in implied volatility, skew, or correlations may produce losses that materially exceed recent historical experience. Offshore derivatives venues may implement automatic deleveraging, forced close-outs, collateral haircuts, or sudden changes to risk parameters during market stress, any of which could accelerate losses or impair our ability to post margin in time to avoid liquidation.

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Selling covered call options limits upside participation and may result in the Kraken Trading Wallet being “called away” above the strike price, thereby foregoing gains during sharp Bitcoin rallies. Short call exposure entails negative gamma and vega, and rising volatility or rapid price movements may increase losses or the cost to close or roll positions. Position limits, exchange or dealer risk controls, and reduced liquidity near option expirations may further impede the ability to adjust positions. In addition, settlement frictions, pin risk, and hard-to-borrow dynamics around expirations may cause unexpected assignments, partial fills, or inability to source or deliver reference assets at reasonable prices, resulting in realized losses or elevated transaction costs.

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Selling cash-secured put options exposes the Kraken Trading Wallet to the downside risk of Bitcoin. Large or rapid downward price movements may result in assignment or realized losses that exceed the premiums received, increase margin requirements, and trigger forced liquidations if collateral is insufficient. Rolling positions down or out may be costly or unavailable during periods of market stress. Certain venues may also apply dynamic collateral haircuts or widen margin add-ons on short notice, which could lead to forced de-risking or liquidations at unfavorable prices even when the account remains economically solvent on a mark-to-market basis.

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We will be exposed to the default risk of our clearing broker if we hedge the price risk of Bitcoin through the purchase of futures contracts.

Read in the 10-K filed Mar 30, 2026 ↗

If we use a clearing broker to help manage financial transactions — such as buying or selling Bitcoin futures contracts to hedge against Bitcoin price swings — then we will be exposed to the clearing broker’s credit risk. Under the CEA and CFTC regulations, futures contracts must be cleared through a clearing broker known as a registered futures commission merchant (“FCM”). FCMs hold a certain amount of the customer collateral that customers deposit in connection with their futures trading, and are responsible for posting that collateral to the clearinghouse on the customer’s behalf when the clearinghouse issues a margin call. FCMs are required to maintain such collateral and all customer assets in a segregated account. If the FCM fails to do so, or is unable to satisfy a substantial deficit in a customer account, its customers (including us) may be subject to risk of loss of their funds in the event of the FCM’s insolvency. In such event, under the current U.S. Bankruptcy Code, the FCM’s customers (including us) are entitled to recover only a proportional share of all property available for distribution to all of that FCM’s customers. We may therefore be exposed to material losses in the event of an FCM’s or fellow FCM customer’s default or insolvency.

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In addition, offshore venues and dealers, like Kraken’s offshore swap dealer for the Kraken Trading Wallet, may be subject to non-U.S. legal regimes with different customer protections, segregation requirements, and insolvency outcomes. Enforcement of contractual rights and recovery of assets may be uncertain, delayed, or unavailable. Legal or regulatory actions in one or more jurisdictions could impair our ability to acquire, own, hold, sell, or use certain digital assets or to exchange them for fiat currency, and could restrict or prohibit the operation of particular venues or products on which the we rely.

Read in the 10-K filed Mar 30, 2026 ↗

We may face risks relating to the custody of our Bitcoin, including the loss or destruction of private keys required to access our Bitcoin and Security Incidents or other data loss relating to our Bitcoin.

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We intend to hold our Bitcoin with regulated custodians at U.S.-based, institutional-grade custodians that have demonstrated records of regulatory compliance and information security. We do not anticipate that our custodial services contracts will restrict our ability to reallocate our Bitcoin among our custodians, and our Bitcoin holdings may be concentrated with a single custodian from time to time. If there is a decrease in the availability of digital asset custodians that we believe can safely custody our Bitcoin, 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 Bitcoin, and our ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected.

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Our insurance may only cover losses of a small fraction of the value of the entirety of our Bitcoin holdings, and there can be no guarantee that such insurance will be maintained as part of the custodial services we will have or that such coverage will cover any losses with respect to our Bitcoin. Moreover, our use of custodians exposes us to the risk that the Bitcoin 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 Bitcoin. Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage we maintain related to our Bitcoin.

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Bitcoin is 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 Bitcoin is held. While the Bitcoin 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 Bitcoin held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custodians will be able to access the Bitcoin 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 Security Incident. The Bitcoin and blockchain ledger, as well as other digital assets and blockchain technologies, have been, and may in the future be, subject to Security Incidents, or other malicious activities.

Read in the 10-K filed Mar 30, 2026 ↗

Regulatory change determining that Bitcoin is being offered and sold as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940 and could adversely affect the market price of Bitcoin and the market price of our listed securities.

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A significant portion of our assets will be concentrated in our Bitcoin holdings. While senior SEC officials have stated their view that Bitcoin is not a “security” for purposes of the federal securities laws, a contrary determination by the SEC, or a determination that our Bitcoin is being offered and sold as a security, could lead to our classification as an “investment company” under the Investment Company Act of 1940. In addition, in certain circumstances the acquisition of minority interests in other entities without the application of exceptions under the Investment Company Act of 1940 could lead to our classification as an “investment company”. Any classification of the Company or its subsidiaries as an investment company could subject us to significant additional regulatory controls that could have a material adverse effect on our business, operations, and ability to execute on our Bitcoin strategy, and may also require us to substantially change the manner in which we conduct our business.

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In addition, any additional regulatory restrictions imposed by such determinations could adversely affect the market price of Bitcoin and in turn adversely affect the market price of our listed securities.

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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 Bitcoin strategy, our use of leverage, the manner in which our Bitcoin 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 has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect of our Bitcoin holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding Bitcoin.

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Our Bitcoin 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 Bitcoin, a loss of the opportunity to generate funds, or other losses.

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Our primary counterparty risk with respect to our Bitcoin 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 filings 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 Bitcoin, nor have such events adversely impacted our access to our Bitcoin, 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.

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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 Bitcoin 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 Bitcoin 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 Bitcoin, could have a material adverse effect on our business, prospects, financial condition, and operating results.

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We may pursue strategies to generate income or liquidity from our Bitcoin holdings, such as lending, staking, or entering into other arrangements, which could significantly increase our exposure to counterparty, credit, and operational risks.

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In addition to the risks associated with the custody of its Bitcoin, we may from time to time pursue strategies to generate income or liquidity from our Bitcoin holdings, including lending Bitcoin to third parties, entering into repurchase or derivative arrangements, staking assets (including other cryptocurrency assets, although Bitcoin itself does not natively support staking), or using its holdings in other ways that may involve the transfer or encumbrance of digital assets. These strategies inherently involve heightened counterparty risk, particularly where our Bitcoin is transferred to or held by third parties for purposes of collateralization, lending, or income generation. Any such arrangements could expose us to the risk of loss in the event of the counterparty’s default, insolvency, fraud, or mismanagement. In addition, these activities may subject us to complex legal, regulatory, and tax regimes that continue to evolve and remain uncertain. If a counterparty fails to return our Bitcoin as expected, or if our rights in such arrangements are not enforceable in the event of insolvency or other adverse proceedings, we could suffer substantial losses. These risks could have a material adverse effect on our business, financial condition, and results of operations.

Read in the 10-K filed Mar 30, 2026 ↗

Our Bitcoin operations and digital asset treasury are new for our Company, and our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our Bitcoin operations or holdings.

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We implemented our Bitcoin treasury strategy shortly after the closing of the Nakamoto Merger and substantially expanded our Bitcoin related operations upon closing the Mergers, and our historical financial statements do not reflect the potential variability in earnings we may experience from holding or selling significant amounts of Bitcoin or having business operations that may be impacted by the price of Bitcoin. The price of Bitcoin has historically been subject to dramatic fluctuations and is highly volatile. Additionally, we may expand our operations to include other income streams and otherwise generate funds using our Bitcoin holdings. If we expand such operations, additional risks related to such strategies, including counterparty risks, could arise.

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Due to our limited operating history and the concentration of our Bitcoin holdings, it will be difficult to evaluate our business and future prospects, and we may not achieve or maintain profitability.

Read in the 10-K filed Mar 30, 2026 ↗

We have a limited operating history, particularly with respect to our current business model, which is highly concentrated in the acquisition and holding of Bitcoin. As a result, there is limited historical information available to evaluate our business, our management’s ability to execute our strategy, or our prospects for growth and profitability. The lack of a diversified operating history increases the difficulty for investors and analysts to assess our performance, business model viability, and the likelihood of achieving or maintaining profitability. Our financial results and prospects are highly dependent on the value and performance of our Bitcoin holdings, which are subject to significant volatility and risk. If we are unable to effectively manage our Bitcoin portfolio, respond to market changes, or adapt our business strategy, we may not achieve or sustain profitability, which could adversely affect our Common Stock price and investment value.

Read in the 10-K filed Mar 30, 2026 ↗

On December 3, 2025, Nakamoto Holdings, entered into a Master Loan Agreement with Kraken pursuant to which Kraken may, from time to time, extend loans of fiat or digital currency to Nakamoto Holdings on the terms set forth in the Master Loan Agreement and one or more loan term sheets executed thereunder (each, a “Loan Term Sheet”). Pursuant to the Loan Term Sheets dated December 4, 2025 and December 9, 2025, Kraken extended a fixed-term loan in an aggregate principal amount of 210,000,000 USDT (the “Loan”), bearing interest at a rate of 8.0% per annum, payable in USDT. The Loan matures on December 4, 2026, subject to earlier prepayment or acceleration in accordance with the Master Loan Agreement and applicable Loan Term Sheets. To secure the Loan, we were required to grant Kraken a security interest in Bitcoin owned by Nakamoto Holdings (the “Bitcoin Collateral”) and held pursuant to a custody and account control agreement in favor of Kraken. The Loan is subject to ongoing margin maintenance requirements, collateral call thresholds, and liquidation triggers, each calculated by reference to the market value of the Bitcoin collateral relative to the outstanding balance of the Loan.

Read in the 10-K filed Mar 30, 2026 ↗

limiting our ability to use a substantial portion of our cash flow from operations in other areas of our business, including for acquisition of additional Bitcoin, working capital, research and development, expanding our infrastructure, capital expenditures, and other general business activities and investment opportunities in us, because we must dedicate a substantial portion of these funds to pay interest on and/or service our debt; limiting our ability to obtain additional financing in the future for acquisition of additional Bitcoin, working capital, capital expenditures, debt service, acquisitions, execution of our strategy, and other expenses or investments planned by us; limiting our flexibility and our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation, our business, and our industry; increasing our vulnerability to a downturn in our business and to adverse economic and industry conditions generally; placing us at a competitive disadvantage as compared to our competitors that are less leveraged; and limiting our ability, or increasing the costs, to refinance indebtedness.

Read in the 10-K filed Mar 30, 2026 ↗

Our ability to make scheduled payments on and refinance our indebtedness depends on our financial and operating performance, which is influenced by general economic, financial, competitive, legislative, regulatory, and other risks beyond our control, including the availability of financing in U.S. banking and capital markets. If our cash flows and capital resources are insufficient to fund our debt service obligations or to secure acceptable refinancing of the Loan, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital, or restructure our indebtedness. We cannot assure you that future borrowings will be available to us in an amount sufficient to enable us to service our indebtedness, including the Loan, to refinance our indebtedness, or to fund our other liquidity needs. Any refinancing could be at higher interest rates and may require more onerous covenants. In addition, our Bitcoin acquisition strategy anticipates that we may issue additional debt in future periods to finance additional purchases of Bitcoin, but if we are unable to generate sufficient cash flow to service our debt and make necessary capital expenditures, we may be required to sell Bitcoin. Whether we will be able to successfully repay or refinance the Loan will depend on market conditions, our financial performance, and other factors. Failure to make payments of interest and principal on outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness.

Read in the 10-K filed Mar 30, 2026 ↗

Upon an event of default under any of our indebtedness, holders of the defaulted indebtedness could elect to declare all funds borrowed to be due and payable and enforce their security interests on substantially all of our assets and the assets of our subsidiary guarantors. Similarly, upon an event of default under the Master Loan Agreement, Kraken could declare all outstanding principal, together with accrued and unpaid interest, due and payable under the Loan and enforce its security interest on the Bitcoin Collateral. Any of these events could in turn result in cross defaults under any future indebtedness we may incur. We may not have sufficient funds available to pay amounts due upon any such event of default, particularly if there has been a decrease in the market value of our Bitcoin holdings. Any financing we undertake under such circumstances could result in substantial dilution of existing stockholders, and if we are unable to obtain such financing, we could be forced into bankruptcy or liquidation.

Read in the 10-K filed Mar 30, 2026 ↗

Our subsidiary Nakamoto Holdings may depend on cash contributions from us or sales of Bitcoin to meet its obligations under the Master Loan Agreement if its operations do not result in sufficient operating revenue, and we may be required to contribute additional Bitcoin collateral if the value of Bitcoin declines.

Read in the 10-K filed Mar 30, 2026 ↗

Nakamoto Holdings primarily holds Bitcoin and certain USDT proceeds retained from the Loan. As of December 31, 2025, Nakamoto Holdings had no operations other than purchasing and holding Bitcoin, administering the Loan and making minority investments in Bitcoin companies. Following the shift in our business strategy from healthcare to Bitcoin related business, Kraken permitted Nakamoto Holdings to work with a vendor to use collateralized Bitcoin to execute on a covered call strategy to generate yield on collateralized Bitcoin. Our principal sources of funds to make payments under the Master Loan Agreement are proceeds from the yield strategy, capital contributions, loans, or other cash payments from us, and sales of Bitcoin, which may be constrained by the collateral maintenance requirements under the Master Loan Agreement. The Master Loan Agreement has a stated maturity date of December 4, 2026 but includes margin-based collateral maintenance requirements that require us to maintain a minimum level of Bitcoin collateral relative to the outstanding Loan amount. We are required to maintain a loan-to-value ratio on an ongoing basis. If the market value of Bitcoin declines below certain loan-to-value ratios, Kraken may require us to deposit additional Bitcoin as collateral, repay a portion of the Loan, or declare Nakamoto Holdings in default and liquidate some or all of the Bitcoin Collateral without prior notice to us. As of March 23, 2026, approximately 4,405 Bitcoins were held in the Bitcoin Collateral account and approximately 653 of our aggregate Bitcoins remained unencumbered. We may not have sufficient funds available to pay amounts owed under the Master Loan Agreement when due, and we may not be able to raise additional funds on acceptable terms or at all.

Read in the 10-K filed Mar 30, 2026 ↗

We depend on dividends, distributions, and other payments from our subsidiaries to fund our obligations, including those arising under the Master Loan Agreement, and to meet our cash needs. The operating results of our subsidiaries at any given time may not be sufficient to make such payments to us to allow us to make payments on our indebtedness. Nakamoto Holdings, which holds the Bitcoin pledged as collateral to secure the Loan, may be prohibited from providing dividends, distributions, or other payments to us. As of March 23, 2026, approximately 4,405 Bitcoins held by Nakamoto Holdings are pledged as collateral under the Master Loan Agreement that secures our obligations under the Master Loan Agreement. In addition, transfers of assets between our subsidiaries and from our subsidiaries to us may be subject to legal, regulatory, or contractual restrictions.

Read in the 10-K filed Mar 30, 2026 ↗

Unrealized fair value gains on our Bitcoin holdings may cause us to become subject to the corporate alternative minimum tax under the Inflation Reduction Act of 2022, and our effective tax rate may fluctuate.

Read in the 10-K filed Mar 30, 2026 ↗

The Inflation Reduction Act of 2022 (“IRA”) imposes a 15% corporate alternative minimum tax (“CAMT”) on corporations with average annual adjusted financial statement income exceeding $1 billion for any consecutive three-tax-year period, unless an exemption applies. We may be required to adopt ASU 2023-08, under which our Bitcoin holdings must be measured at fair value with gains and losses recognized in net income each reporting period. When determining CAMT applicability and liability, adjusted financial statement income must include any unrealized gains or losses. As a result, we may be subject to CAMT in 2026 and beyond, which could result in a material tax obligation that would need to be satisfied in cash, materially affecting our financial results, including earnings and cash flow.

Read in the 10-K filed Mar 30, 2026 ↗

We have incurred significant operating losses since our inception and anticipate that we will incur continued operating losses for the foreseeable future. Our ability to achieve profitability depends on numerous factors, including the market price of Bitcoin, our ability to successfully execute our Bitcoin treasury strategy, and our ability to manage our operating expenses. Even if we achieve profitability in one or more periods, we may not be able to sustain profitability on a quarterly or annual basis. Our historical losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. If we are unable to achieve sustained profitability, the value of our Company and our Common Stock could decline significantly, and you could lose all or a portion of your investment.

Read in the 10-K filed Mar 30, 2026 ↗

Our business and financial performance may be adversely affected by unfavorable global economic conditions, including recession, inflation, deflation, rising interest rates, changes in fiscal or monetary policy, tightening of credit markets, geopolitical instability, and other macroeconomic factors. Economic downturns could negatively affect investor sentiment toward risk assets, including Bitcoin, potentially reducing the market price of our Bitcoin holdings and adversely affecting our financial condition. Additionally, adverse economic conditions could make it more difficult or expensive for us to obtain debt or equity financing, increase our borrowing costs, reduce the availability of credit, and limit our ability to execute our Bitcoin acquisition strategy. Unfavorable economic conditions could also affect the financial stability of our counterparties, including our custodians, trading partners, and lenders, increasing our exposure to counterparty risk. Any of these factors could have a material adverse effect on our business, financial condition, and results of operations.

Read in the 10-K filed Mar 30, 2026 ↗

Changes in interest rates could have a material impact on our business and financial condition. Rising interest rates could increase our borrowing costs on any variable-rate debt we incur, as well as the cost of refinancing our existing indebtedness when it matures. Higher interest rates could also make it more expensive for us to raise capital through debt financing to execute our Bitcoin acquisition strategy. Additionally, rising interest rates may reduce the attractiveness of Bitcoin as an investment relative to interest-bearing assets, which could negatively affect the market price of Bitcoin and, consequently, the value of our Bitcoin holdings. Conversely, falling interest rates, while potentially reducing borrowing costs, could indicate broader economic weakness that may adversely affect our business. We do not currently hedge against interest rate risk, and any significant changes in interest rates could have a material adverse effect on our financial condition and results of operations.

Read in the 10-K filed Mar 30, 2026 ↗

Our Loan is denominated in USDT, a stablecoin, and we are exposed to risks associated with the stability and regulatory treatment of USDT.

Read in the 10-K filed Mar 30, 2026 ↗

Our Loan with Kraken is denominated in USDT (Tether), a stablecoin that is designed to maintain a 1:1 peg with the U.S. dollar. If USDT were to depeg from the U.S. dollar, whether due to a loss of confidence in the issuer, regulatory action, liquidity constraints, or other factors, the value of our obligations under the Loan could become uncertain and we could experience losses. Stablecoins, including USDT, have faced regulatory scrutiny regarding the adequacy of their reserves, the transparency of their operations, and their potential systemic risks to the broader financial system. If regulators were to restrict the use of USDT or impose requirements that impair its functionality, we could face difficulties in servicing or refinancing the Loan. Additionally, if USDT were to experience significant redemption pressure or a bank run, the stablecoin could trade below its intended peg, creating uncertainty in our debt obligations. Any of these events could have a material adverse effect on our financial condition and our ability to meet our obligations under the Master Loan Agreement.

Read in the 10-K filed Mar 30, 2026 ↗

Inflation has recently increased in the United States and globally, and may continue to increase in the future. Inflationary pressures could increase our operating costs, including compensation, professional services, and other expenses, and may not be fully offset by price increases or other measures. Inflation could also affect the broader economy, leading to reduced consumer and investor confidence, tighter monetary policy, and higher interest rates, any of which could adversely affect our business and the market price of Bitcoin. While Bitcoin has been characterized by some as a potential hedge against inflation, there is no assurance that Bitcoin will perform as expected in an inflationary environment, and the price of Bitcoin could decline during periods of high inflation. If we are unable to effectively manage the impact of inflation on our business, our financial condition and results of operations could be materially adversely affected.

Read in the 10-K filed Mar 30, 2026 ↗

We may from time to time experience working capital deficiencies, where our current liabilities exceed our current assets. A working capital deficiency could limit our ability to fund our day-to-day operations, meet our short-term obligations, and pursue our Bitcoin acquisition strategy. While we may be able to address working capital deficiencies through equity or debt financing, asset sales, or other means, there can be no assurance that such financing or other sources of liquidity will be available on acceptable terms or at all. If we are unable to maintain adequate working capital, we may be forced to reduce or delay planned expenditures, sell assets at unfavorable prices, or take other actions that could adversely affect our business. A sustained working capital deficiency could raise substantial doubt about our ability to continue as a going concern, which would adversely affect investor confidence and could materially impact our access to capital and the trading price of our Common Stock.

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A prolonged decline in Bitcoin’s market price could cause us to fall below Nasdaq’s continued listing standards.

Read in the 10-K filed Mar 30, 2026 ↗

A significant portion of our total assets consists of Bitcoin, making the value of our assets highly sensitive to Bitcoin price fluctuations. If the market price of Bitcoin experiences a prolonged or severe decline, our total assets and stockholders’ equity could decrease substantially, potentially causing us to stay or fall below Nasdaq’s minimum requirements for continued listing. This could result in delisting proceedings, which would likely have a material adverse effect on liquidity, market price, ability to access capital markets, and ability to execute our business strategy.

Read in the 10-K filed Mar 30, 2026 ↗

We expect our operating results, revenues, and expenses to vary significantly from quarter to quarter due to a variety of factors, many of which are outside of our control. These factors include, but are not limited to, fluctuations in Bitcoin’s market price, changes in the fair value of our Bitcoin holdings, timing and size of Bitcoin purchases or sales, changes in accounting standards, and regulatory developments. Our expenses may increase as we invest in infrastructure, personnel, and compliance. We may experience periods of losses or lower-than-expected profitability, which could cause our Common Stock price to decline and make it difficult for investors to forecast future results, increasing the risk associated with an investment in us.

Read in the 10-K filed Mar 30, 2026 ↗

The value of our Common Stock depends significantly on market demand for our Bitcoin strategy, which could decline.

Read in the 10-K filed Mar 30, 2026 ↗

The market value of our Common Stock is closely tied to investor perceptions of the attractiveness and viability of our Bitcoin-focused strategy. In recent years, corporate adoption of Bitcoin has been influenced by trends and market sentiment, with some companies acquiring Bitcoin to enhance their public profiles, attract investor attention, or pursue speculative strategies unrelated to their core businesses. If market enthusiasm for corporate Bitcoin adoption wanes, or if investors view our strategy as less compelling or sustainable, demand for our stock could decline significantly. Negative publicity, regulatory scrutiny, or adverse developments affecting other companies with similar strategies could further reduce investor interest and result in a significant decline in our Common Stock value, regardless of the underlying performance of our Bitcoin holdings.

Read in the 10-K filed Mar 30, 2026 ↗

In the past, securities class action litigation has often been brought against companies following periods of volatility in the market prices of their securities or following announcements of significant business developments. Our Common Stock price has experienced significant volatility, and we have announced a fundamental shift in our business strategy from healthcare operations to a Bitcoin operations and treasury strategy. These factors may increase the likelihood that we will become the target of securities class action litigation. Such litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources, which could harm our business, financial condition, and results of operations. Even if we prevail in any such litigation, we may incur significant legal fees and other expenses, and such litigation could damage our reputation and negatively impact the trading price of our Common Stock.

Read in the 10-K filed Mar 30, 2026 ↗

Short selling occurs when an investor borrows shares and immediately sells them, hoping that the share price will decline and the investor can repurchase the shares at a lower price for return to the lender. Short selling has been prevalent in securities of companies with significant exposure to digital assets, including Bitcoin. The significant short selling of our Common Stock, or the perception that such short selling may occur, may create downward pressure on the price of our Common Stock and may amplify the effect of any negative developments. Additionally, so-called “short and distort” campaigns could target our Company, where short sellers spread negative information about a company to drive down its stock price and profit from their short positions. Any such campaign could damage our reputation and adversely affect the market price of our Common Stock, regardless of the accuracy of the information disseminated. Conversely, if our Common Stock price increases rapidly, short sellers may be forced to cover their positions quickly, leading to a “short squeeze” that could result in extreme price volatility.

Read in the 10-K filed Mar 30, 2026 ↗

In recent years, securities of certain companies have experienced extreme price volatility driven in part by activity on social media platforms and online forums, sometimes referred to as “meme stock” dynamics. This volatility is often unrelated to the underlying performance or fundamentals of the companies involved and can be driven by retail investor sentiment, coordinated trading activity, or viral attention. Our Common Stock could be subject to similar dynamics, which could result in rapid and significant price increases or decreases that may be disconnected from our financial performance or the value of our Bitcoin holdings. Such volatility could expose us to securities class action litigation or regulatory scrutiny. Additionally, false or misleading information about us could be spread on social media or online forums, which could adversely affect our reputation and the market price of our Common Stock, regardless of the accuracy of such information.

Read in the 10-K filed Mar 30, 2026 ↗

Some institutional investors, including certain mutual funds, pension funds, and insurance companies, may be prohibited or discouraged by their investment policies, guidelines, or mandates from investing in companies with significant exposure to digital assets, including Bitcoin. Other institutional investors may choose not to invest in our Common Stock due to concerns about the regulatory uncertainty, volatility, or perceived risks associated with digital assets. As a result, the pool of potential investors in our Common Stock may be more limited than for companies without significant digital asset exposure. This reduced demand could adversely affect the market price of our Common Stock and may limit our ability to raise capital through equity offerings in the future. Additionally, if regulatory developments or changes in market perception cause more institutional investors to avoid companies with digital asset exposure, the market price of our Common Stock could decline.

Read in the 10-K filed Mar 30, 2026 ↗

Our trade shows compete with numerous providers of in-person, virtual, and hybrid conferences, trade shows, and events, including those focused on digital assets and related technologies. Many competitors may have longer operating histories, larger customer bases, greater brand recognition, and significantly greater financial, marketing, or operational resources than we have. Competitors may also be better positioned to respond to changes in technology, attendee preferences, or exhibitor demands. As a result, we may lose attendees, exhibitors, or sponsors to competitors, which could reduce our market share and negatively impact revenues from our trade show business.

Read in the 10-K filed Mar 30, 2026 ↗

BTC Inc’s business may be exposed to risks related to accepting digital assets or alternative payment methods.

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In connection with our trade show operations, we may accept, or may in the future accept, digital assets or other alternative payment methods for registration fees, exhibition space, or sponsorships. These payment methods may be subject to price volatility, technological risks, operational complexities, and evolving accounting, tax, legal, and regulatory requirements. We may rely on third-party service providers to process or hold such payments, and the failure, insolvency, or misconduct of those providers could expose us to financial loss or operational disruption. Regulatory or tax developments relating to digital assets or alternative payment methods could also impose additional compliance obligations or adversely affect our trade show operations.

Read in the 10-K filed Mar 30, 2026 ↗

Consistent with industry leaders, we book venues years in advance and secure talent and vendors many months in advance. However, as a Bitcoin media company, our events are also technical milestones. We often guarantee fixed payments to venues and vendors before receiving ticket or sponsorship revenue. If an event is cancelled or limited due to travel restrictions, health codes, or low interest, we may not recover these costs.

Read in the 10-K filed Mar 30, 2026 ↗

We rely on third-party content delivery networks and decentralized streaming protocols. Any disruption in our ability to live-stream our premium content, whether due to a Security Incident, hardware failure or otherwise, could result in the loss of subscribers and a breach of contract with our media partners. High-quality video of live Bitcoin market analysis or conference keynotes requires significant bandwidth. If streaming platforms prioritize other content or face outages, our real-time value proposition is neutralized.

Read in the 10-K filed Mar 30, 2026 ↗

The value of our media rights and sponsorships is highly sensitive to the “Bitcoin Cycle” and consumer tastes.

Read in the 10-K filed Mar 30, 2026 ↗

A portion of our revenue comes from long-term media rights, which are often tied to the “Halving” cycles and market sentiment. Our sponsors are primarily from the Bitcoin and financial technology sectors. During bear markets, these companies frequently reduce discretionary spending on sponsorships and advertising, which could lead to a material decline in our revenue. Our premium live events (e.g., exclusive developer summits or high-tier educational workshops) are subject to digital piracy. If our content is rebroadcast on social media without authorization, the value we can command from streaming partners will be significantly diminished.

Read in the 10-K filed Mar 30, 2026 ↗

Our revenue is concentrated in marquee events (e.g., annual Bitcoin conferences or regional summits), and we face the risk that our flagship events could lose their status as venues for industry deal-making.

Read in the 10-K filed Mar 30, 2026 ↗

Operational Leverage: We incur high fixed costs—including venue rentals and security—long before revenue is recognized. If a major event underperforms in ticket sales or is canceled due to force majeure events (e.g., regulatory shifts or health crises), our operating results would be disproportionately harmed. Talent Dependency: Our events rely on high-profile Bitcoin developers, CEOs, and influencers. If these high-profile individuals fail to appear or lose their industry standing, it could lead to significant ticket refunds and the loss of future sponsorship interest. Fragmentation of Knowledge: If the Bitcoin industry decentralizes its knowledge-sharing to a degree where physical B2B gatherings are no longer required for business-to-business transactions, revenue from our events could decline. Geopolitical and Travel Restrictions: Our events draw an international audience of developers and miners. Changes in visa policies or “Proof-of-Work” bans in specific jurisdictions could prevent key exhibitors and attendees from participating, diminishing the event’s attendance and revenue.

Read in the 10-K filed Mar 30, 2026 ↗

We are dependent on a narrow pool of corporate sponsors whose marketing budgets are highly correlated with Bitcoin’s market cycles.

Read in the 10-K filed Mar 30, 2026 ↗

A substantial portion of our margin is derived from sponsorship and advertising. Our advertisers are primarily Bitcoin exchanges, mining firms, and financial technology companies. During periods of high volatility, our sponsors may experience liquidity constraints or sharp reductions in discretionary marketing spend. A sustained bear market could lead to the non-renewal of multi-year sponsorship agreements or the transition of mining firm sponsors to AI focused firms, materially impacting our long-term revenue visibility. Given the nascent nature of the industry, some sponsors may face financial instability or regulatory freezes. Any inability of a major partner to fulfill their payment obligations could lead to immediate bad debt write-offs.

Read in the 10-K filed Mar 30, 2026 ↗

Our ticketing platforms handle sensitive financial data and Bitcoin transaction hashes. Sophisticated bad actors may use bots to disrupt ticket on-sales or manipulate secondary markets. This could frustrate our core community and damage our brand reputation. If our events rely on Bitcoin-native technologies, any technical failure or network congestion during a live broadcast would disrupt the fan experience and result in the loss of “on-site” per-capita spending revenue.

Read in the 10-K filed Mar 30, 2026 ↗

Any perceived centralization or gatekeeping of the Bitcoin media landscape could invite regulatory scrutiny or community backlash.

Read in the 10-K filed Mar 30, 2026 ↗

Community Backlash: The Bitcoin community values decentralization. If we are perceived as a gatekeeper that suppresses certain voices or monopolizes event access, we may face organized boycotts or the emergence of competing, grassroots events that siphon away our audience. Regulatory Risk: We may be subject to evolving SEC or FTC guidelines regarding the promotion of digital assets. Failure to clearly distinguish between editorial content and paid “shilling” by sponsors could lead to investigations, fines, and a loss of institutional credibility.

Read in the 10-K filed Mar 30, 2026 ↗

The value of our data-driven lead generation services depends on the quality and permissioned nature of our Bitcoin audience data.

Read in the 10-K filed Mar 30, 2026 ↗

We provide sponsors with data that identifies which institutional players are researching Bitcoin infrastructure. Stricter enforcement of GDPR or the UK Data Protection Act specifically regarding financial/crypto interest data could limit our ability to monetize our audience. If generative AI models can effectively aggregate and synthesize specialist Bitcoin technical knowledge, the scarcity value of our intellectual property may be impaired.

Read in the 10-K filed Mar 30, 2026 ↗

BTC Inc’s editorial independence may be compromised, or perceived to be compromised, by our corporate Bitcoin holdings and other business interests, which could damage our credibility and audience trust.

Read in the 10-K filed Mar 30, 2026 ↗

As a media company that produces news, analysis, and commentary about Bitcoin and the broader digital asset ecosystem, our credibility and reputation depend on the editorial independence and integrity of our content. However, we also hold Bitcoin as a treasury asset and have financial interests in the success of the Bitcoin ecosystem. This may create a conflict of interest, or the perception of such a conflict, that could undermine audience trust in our editorial content. Readers, viewers, and industry participants may question whether our coverage is objective or is instead designed to promote Bitcoin and thereby benefit our balance sheet. If our editorial content is perceived as biased, promotional, or lacking independence, we could experience a decline in audience engagement, loss of credibility among industry participants, reduced advertiser and sponsor interest, and damage to our brand reputation. Additionally, our relationships with sponsors, exhibitors, and advertisers may create pressure—actual or perceived—to provide favorable coverage or avoid critical reporting. Any failure to maintain clear boundaries between editorial and commercial interests could result in regulatory scrutiny, reputational harm, and a material adverse effect on our media business.

Read in the 10-K filed Mar 30, 2026 ↗

BTC Inc publishes news, opinions, analysis, and commentary about individuals, companies, projects, and developments in the Bitcoin and digital asset industry. This industry is characterized by intense competition, disputed claims, controversial personalities, and significant financial stakes, which increases the likelihood that subjects of our coverage may take issue with our reporting. We may face claims of defamation, libel, invasion of privacy, misappropriation, or other content-related torts from individuals or entities who believe they have been harmed by our coverage. Even if such claims are without merit, defending against them can be expensive, time-consuming, and distracting to management. Adverse judgments or settlements could result in significant monetary damages and injunctive relief that restricts our ability to report on certain topics or individuals. Additionally, the threat of litigation may cause us to exercise excessive caution in our reporting, which could diminish the value and relevance of our editorial content. Our media liability insurance may not cover all claims or may be insufficient to cover the full extent of any damages awarded. Any of these outcomes could have a material adverse effect on our business, financial condition, and reputation.

Read in the 10-K filed Mar 30, 2026 ↗

The success of our media business depends in part on the talents, reputation, and continued services of certain journalists, podcasters, video hosts, and other content creators who have developed personal followings and brand recognition within the Bitcoin community. These individuals may be difficult to replace, and their departure—whether voluntary or involuntary—could result in the loss of audience members who followed our platforms primarily because of these personalities. Additionally, if any of our key content creators becomes involved in controversy, engages in conduct that damages their reputation, or expresses views that alienate segments of our audience, it could harm our brand and reduce audience engagement. We may not have long-term contractual arrangements with all key content creators, and competitors may seek to recruit our talent by offering more attractive compensation or creative opportunities. The loss of one or more key content creators, or damage to their reputations, could result in decreased viewership, listenership, or readership, reduced advertising and sponsorship revenues, and a material adverse effect on our media business.

Read in the 10-K filed Mar 30, 2026 ↗

A significant portion of our audience reach and engagement depends on third-party platforms, including social media networks (such as X, formerly Twitter, YouTube, Instagram, TikTok, and Facebook), podcast distribution services (such as Spotify and Apple Podcasts), and other digital distribution channels. These platforms have broad discretion to modify their algorithms, user interfaces, content policies, monetization programs, and terms of service, often with little or no advance notice. Changes to algorithms or platform disruptions could reduce the visibility of our content, while policy changes could result in the demonetization, restriction, or removal of our content or accounts. Some platforms have taken actions against cryptocurrency-related content or accounts in the past, and there can be no assurance that they will not do so in the future. If one or more major platforms restricts, demonetizes, or bans our content or accounts, we could experience a significant and sudden decline in audience reach, engagement, and revenues. Additionally, our reliance on these platforms means we have limited control over the user experience, data collection, and direct relationships with our audience. Any adverse changes to our relationship with key distribution platforms could have a material adverse effect on our media business, results of operations, and growth prospects.

Read in the 10-K filed Mar 30, 2026 ↗

Our media business generates revenue from advertising, sponsorships, and promotional content. These activities are subject to a complex and evolving regulatory framework, including rules enforced by the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), state attorneys general, and other regulatory bodies. The FTC requires clear and conspicuous disclosure of material connections between advertisers and publishers, including sponsored content, paid endorsements, and affiliate relationships. The SEC regulates the promotion of securities and investment products, and certain digital assets may be deemed securities under applicable law. Several states have enacted or proposed laws specifically regulating cryptocurrency advertising. Failure to comply with these regulations could result in enforcement actions, civil penalties, injunctive relief, and reputational harm. Additionally, as regulatory scrutiny of the digital asset industry intensifies, we may face increased compliance costs, restrictions on the types of advertising we can accept, and greater risk of enforcement actions. If we are found to have violated advertising regulations, or if regulatory changes limit our ability to monetize our content through advertising, it could have a material adverse effect on our revenues and business operations.

Read in the 10-K filed Mar 30, 2026 ↗

We publish news, analysis, market commentary, and educational content about Bitcoin and the digital asset industry. While we do not intend for this content to constitute investment advice, readers or viewers may rely on our content when making investment decisions. If our content contains errors, omissions, or statements that are later deemed to be misleading or inaccurate, we could face claims from individuals who allege they suffered financial losses as a result of relying on our content. Additionally, regulatory authorities may take the position that certain types of content—such as price predictions, investment theses, or recommendations—constitute investment advice that requires registration or compliance with securities laws. The proliferation of misinformation in the digital asset space has drawn increased regulatory attention, and we may face scrutiny regarding the accuracy and completeness of our content. We cannot guarantee that all content published on our platforms will be accurate, complete, or free from error, particularly with respect to fast-moving market developments or complex technical subjects. Any claims, enforcement actions, or reputational damage arising from our content could have a material adverse effect on our business, financial condition, and results of operations.

Read in the 10-K filed Mar 30, 2026 ↗

To the extent our media business includes subscription-based content offerings, membership programs, or other recurring revenue models, our financial performance will depend on our ability to attract new subscribers and retain existing ones. Subscriber churn—the rate at which subscribers cancel or fail to renew—is influenced by many factors, including the quality and relevance of our content, competitive offerings, general economic conditions, and changes in consumer preferences. During periods of declining Bitcoin prices or reduced interest in digital assets, subscribers may be more likely to cancel discretionary media subscriptions. We may also face increased competition from free or lower-cost alternatives, including social media, podcasts, newsletters, and other content providers. High subscriber churn could result in declining revenues, reduced customer lifetime value, and increased customer acquisition costs as we seek to replace lost subscribers. If we are unable to maintain acceptable subscriber retention rates, it could have a material adverse effect on our recurring revenues, financial condition, and growth prospects.

Read in the 10-K filed Mar 30, 2026 ↗

We produce and distribute media content about Bitcoin and the digital asset industry to a global audience. However, certain jurisdictions have enacted laws or regulations that restrict, prohibit, or heavily regulate content related to cryptocurrencies, digital assets, or financial topics. For example, China has banned cryptocurrency-related activities, and other countries have imposed restrictions on cryptocurrency advertising or promotion. Our content may be blocked, restricted, or subject to legal action in jurisdictions with restrictive policies. Additionally, we may be required to comply with local content regulations, data protection laws, and other requirements in jurisdictions where our content is accessible, which may be difficult or impractical given the global nature of internet distribution. We may face legal liability, fines, or other penalties if our content is deemed to violate local laws, even if such content is lawful in the United States. These restrictions could limit our ability to grow our global audience, reduce our international advertising revenues, and expose us to legal and compliance risks. Changes in laws or enforcement practices in key markets could have a material adverse effect on our international operations and growth prospects.

Read in the 10-K filed Mar 30, 2026 ↗

Our reputation could be harmed by our association with controversial individuals, sponsors, or topics within the Bitcoin community.

Read in the 10-K filed Mar 30, 2026 ↗

The Bitcoin and digital asset community includes a diverse range of individuals, organizations, and viewpoints, some of which are controversial or polarizing. Our media business involves interviewing, featuring, or hosting speakers and guests at events who may hold or express views that are controversial, offensive, or inconsistent with mainstream values. We may also accept sponsorships or advertising from companies or individuals who later become involved in controversy, fraud, regulatory enforcement, or other reputational issues. If we are perceived as providing a platform for, or being associated with, controversial figures, fraudulent projects, or objectionable viewpoints, it could result in advertiser pullback, audience alienation, negative media coverage, and damage to our brand reputation. The decentralized and often anonymous nature of the Bitcoin community makes it difficult to fully vet all participants, sponsors, and guests. Social media amplification can rapidly escalate reputational issues, and we may have limited ability to control the narrative or respond effectively to criticism. Any significant reputational harm arising from our associations within the Bitcoin community could have a material adverse effect on our business, advertiser relationships, and audience engagement.

Read in the 10-K filed Mar 30, 2026 ↗

Revenue from our investment advisory operations is substantially dependent on the market price of Bitcoin and the amount of AUM, which generally consists of Bitcoin and Bitcoin-related investments in securities, all of which are subject to extreme volatility.

Read in the 10-K filed Mar 30, 2026 ↗

The investment advisory fees earned by our subsidiary are typically calculated as a percentage of AUM. Bitcoin has historically experienced significant price volatility, including frequent drawdowns exceeding 30% to 50% within short periods. If the market price of Bitcoin declines, our AUM and the resulting management fees will likely decrease as well. Furthermore, extreme volatility may discourage new client inflows or trigger significant redemptions, materially and adversely affecting the amount of investment advisory fee revenue and, as a result, our results of operations and financial condition.

Read in the 10-K filed Mar 30, 2026 ↗

Our fiduciary duties may conflict with our obligations as a public company, particularly regarding proprietary Bitcoin products.

Read in the 10-K filed Mar 30, 2026 ↗

As a fiduciary, our advisor subsidiary must act in the best interests of its clients. However, as a public company, we are also focused on maximizing stockholder value. Conflicts may arise if our advisor recommends Bitcoin-related products in which we have a financial interest or if we hold Bitcoin on our own corporate balance sheet. Any perception that our advisory recommendations are influenced by our corporate Bitcoin holdings could lead to “self-dealing” allegations and regulatory scrutiny.

Read in the 10-K filed Mar 30, 2026 ↗

Our investment advisory operations involve complex trading, settlement, and recordkeeping processes that are subject to operational risks. Errors in trade execution, such as incorrect order entry, failure to execute trades in a timely manner, or execution at unfavorable prices, could result in financial losses for clients and potential liability for our advisory subsidiary. Settlement failures, reconciliation errors, and inaccurate recordkeeping could lead to regulatory violations, client disputes, and financial losses. We rely on various systems, technologies, and third-party service providers to support our trading and operational functions, and any failures, disruptions, or errors in these systems could impair our ability to execute trades accurately and efficiently. Additionally, the trading of digital assets involves unique operational risks, including risks related to blockchain network congestion, transaction confirmation times, and the irreversibility of blockchain transactions. Any significant operational failures could result in client losses, regulatory scrutiny, litigation, and reputational damage, which could have a material adverse effect on our advisory business.

Read in the 10-K filed Mar 30, 2026 ↗

As a fiduciary, our investment advisory subsidiary has an obligation to seek best execution when effecting transactions for client accounts. Best execution requires us to execute client transactions in a manner that maximizes value for the client under the circumstances, taking into account factors such as price, cost, speed, likelihood of execution, and other relevant considerations. The determination of best execution is complex and involves the exercise of judgment. The SEC and other regulators actively examine advisers’ best execution practices and have brought enforcement actions against advisers for best execution failures. If we fail to satisfy our best execution obligations, we could face regulatory enforcement actions, civil penalties, client claims for damages, and reputational harm. Additionally, the markets for digital assets may have limited liquidity, fewer execution venues, and wider bid-ask spreads compared to traditional securities markets, which may make it more difficult to achieve best execution for digital asset transactions. Any findings that we failed to achieve best execution could result in regulatory sanctions, client losses, and damage to our reputation, which could have a material adverse effect on our advisory business.

Read in the 10-K filed Mar 30, 2026 ↗

We face risks related to the custody and safekeeping of client assets, particularly digital assets, including potential loss, theft, or inaccessibility of such assets.

Read in the 10-K filed Mar 30, 2026 ↗

Our investment advisory subsidiaries may have custody of, or be deemed to have custody of, client assets, including digital assets such as Bitcoin. The custody of client assets subjects us to specific regulatory requirements under the Advisers Act and related SEC rules, including requirements for qualified custodians, safekeeping procedures, and periodic audits or examinations. Digital assets present unique custody challenges because they are controlled by cryptographic private keys, and the loss, theft, or destruction of these keys could result in the permanent loss of the associated digital assets. We rely on third-party custodians to hold client digital assets, and the failure, insolvency, or misconduct of these custodians could result in client losses and liability for our advisory subsidiary. The regulatory framework for digital asset custody is evolving, and changes in custody rules or requirements could impose additional compliance burdens or restrict our ability to custody certain assets. Additionally, client assets held in custody may not be protected by SIPC or FDIC insurance, and clients may have limited recourse in the event of custodian failure. Any loss, theft, or inaccessibility of client assets in our custody could result in significant client losses, regulatory enforcement actions, litigation, and reputational damage, which could have a material adverse effect on our advisory business.

Read in the 10-K filed Mar 30, 2026 ↗

Our investment advisory subsidiaries are subject to anti-money laundering (“AML”) laws and regulations, including the Bank Secrecy Act and its implementing regulations, and may be subject to additional AML requirements applicable to investment advisers if proposed regulations are adopted. We are also subject to economic sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”). These requirements obligate us to implement and maintain AML and know-your-customer (“KYC”) programs, conduct customer due diligence, monitor transactions for suspicious activity, and file reports with regulatory authorities. The digital asset industry has been subject to heightened AML scrutiny due to concerns about the use of digital assets for money laundering, terrorist financing, sanctions evasion, and other illicit purposes. Failure to maintain adequate AML and KYC programs, or to detect and report suspicious activity, could result in significant regulatory penalties, criminal liability, and reputational damage. Additionally, if we inadvertently facilitate transactions involving sanctioned persons or jurisdictions, we could face OFAC enforcement actions and penalties. Any AML or sanctions compliance failures could have a material adverse effect on our advisory business, financial condition, and reputation.

Read in the 10-K filed Mar 30, 2026 ↗

Our investment advisory operations depend on our and our third-party service providers’ information technology systems to manage client accounts, execute trades, maintain records, and communicate with clients and counterparties. These systems contain sensitive client information, including personal financial data, investment holdings, and transaction histories. Cybersecurity incidents, including hacking, phishing, ransomware, and other attacks, could compromise the confidentiality, integrity, or availability of our systems and data. A successful cybersecurity incident or other Security Incident could result in unauthorized access to client accounts, theft of client assets (including digital assets), disclosure of confidential client information, and disruption of our advisory operations. The SEC has issued guidance emphasizing investment advisers’ obligations to adopt cybersecurity policies and procedures, and has brought enforcement actions against advisers for cybersecurity failures. Additionally, we may be subject to state data breach notification laws and other data protection requirements. Any significant cybersecurity or other Security Incident could result in client losses, regulatory enforcement actions, litigation, notification costs, remediation expenses, and severe reputational damage, which could have a material adverse effect on our advisory business and client relationships.

Read in the 10-K filed Mar 30, 2026 ↗

The investment advisory industry is highly competitive, and we compete with a wide range of firms for clients and investment opportunities. Our competitors include large, well-established investment advisers with significantly greater financial resources, broader product offerings, longer track records, and more extensive client relationships than we have. We also compete with banks, broker-dealers, family offices, and other financial institutions that offer investment advisory or wealth management services. In the digital asset space, we face competition from specialized digital asset investment managers, crypto-native funds, and technology platforms that offer automated or algorithm-based investment services. Many of our competitors may be able to offer lower fees, superior investment performance, broader investment capabilities, or more comprehensive services than we can. Increased competition may result in fee compression, loss of clients to competitors, and difficulty attracting new clients. Additionally, low-cost passive investment products, such as index funds and ETFs (including Bitcoin ETFs), provide investors with alternative means of gaining investment exposure that may reduce demand for active advisory services. If we are unable to compete effectively, our market share, revenues, and profitability could be materially and adversely affected.

Read in the 10-K filed Mar 30, 2026 ↗

Our investment advisory business is subject to the risk of litigation from clients, former clients, counterparties, and other parties, as well as regulatory examinations and enforcement actions by the SEC, state securities regulators, and other governmental authorities. Litigation and regulatory matters may arise from a variety of claims, including breach of fiduciary duty, negligence, fraud, misrepresentation, breach of contract, violations of securities laws, and other matters. Even if claims are without merit, defending against litigation and regulatory inquiries can be expensive, time-consuming, and distracting to management. Adverse outcomes in litigation or regulatory proceedings could result in significant monetary damages, disgorgement of fees, civil or criminal penalties, injunctive relief, and reputational harm. The SEC conducts periodic examinations of registered investment advisers, and examination findings or deficiency letters could result in required changes to our business practices, compliance enhancements, or enforcement referrals. Additionally, regulatory enforcement trends in the digital asset space have been active and evolving, and we may face heightened scrutiny due to our focus on Bitcoin-related investments. Any significant litigation or regulatory matters could have a material adverse effect on our business, financial condition, and reputation.

Read in the 10-K filed Mar 30, 2026 ↗

The regulatory framework governing investment advice related to digital assets, including Bitcoin, is evolving and subject to significant uncertainty. The SEC, CFTC, state securities regulators, and other governmental authorities continue to develop and refine their approaches to regulating digital asset investment activities. Regulatory developments could include new registration requirements, enhanced disclosure obligations, restrictions on the types of digital assets that may be included in advisory portfolios, custody requirements specific to digital assets, and other compliance obligations. The classification of certain digital assets as securities, commodities, or other regulated instruments remains unclear and subject to ongoing regulatory interpretation and litigation. Changes in laws, regulations, or regulatory interpretations could impose significant compliance burdens on our advisory business, restrict our ability to offer certain services or products, or require us to modify our business model. Additionally, regulatory enforcement actions against other participants in the digital asset industry could create adverse precedents or result in regulations that affect our operations. Any significant adverse regulatory developments could have a material adverse effect on our advisory business, financial condition, and ability to serve our clients.

Read in the 10-K filed Mar 30, 2026 ↗

Security Incidents or loss of private keys could result in partial or total loss of our Bitcoin or loss, unavailability, destruction, alteration, prevention of access to, disclosure, or dissemination of, or damage or unauthorized access to, our data (including trade secrets or other confidential information, intellectual property, proprietary business information, and personal information) or data that is processed or maintained on our behalf, or other assets, which could result in financial, legal, business, and reputational harm to us.

Read in the 10-K filed Mar 30, 2026 ↗

Substantially all of our Bitcoin is held in custody accounts at institutional-grade digital asset custodians. Bitcoin and blockchain-based cryptocurrencies have been, and may continue to be, subject to Security Incidents and other malicious activities. While we have implemented security measures designed to protect against actual or reasonably suspected unauthorized access to, or use, acquisition, exfiltration, disclosure, alteration, loss, destruction, encryption, or other compromise of personal data, confidential information, or the confidentiality, integrity, or availability of our information technology systems, whether by external actors, insiders, or accidental events (collectively, “Security Incident(s)”), there can be no assurance that these measures will be effective in all circumstances. A successful Security Incident could result in: partial or total loss of our Bitcoin that may not be covered by insurance or custodial liability provisions; harm to our reputation and brand; improper disclosure of our and our customers’ data and violations of applicable data privacy laws; and significant regulatory scrutiny, investigations, fines, penalties, and other legal and financial exposure.

Read in the 10-K filed Mar 30, 2026 ↗

Security Incidents, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our and our customers’ data and information technology systems, and those of the third parties with whom we work. Security Incidents are increasing in frequency, persistence, and sophistication, conducted by criminal hackers, hacktivists, state-sponsored actors, and insiders using techniques such as hacking, social engineering, phishing, ransomware, and advanced persistent threats. These incidents may target our systems, our third-party service providers, or partners and can affect our ability to operate effectively and the integrity and continued availability of our information systems, data, and services. We may experience Security Incidents due to human error, malfeasance, insider threats, or system vulnerabilities. The risk of Security Incidents has been heightened by remote and hybrid working arrangements, as more of our employees utilize network connections, computers, and devices outside our premises or network, including while working at home, while in transit, or in public locations. Any breach of our operations or those of others in the Bitcoin industry could materially and adversely affect our business.

Read in the 10-K filed Mar 30, 2026 ↗

Despite the security measures we implement, we have experienced, and expect to continue to experience, attempts to compromise our systems and those of our third parties. A Security Incident could result in unauthorized access to or loss of personal data, PHI, confidential information, or digital assets; service interruptions; theft or fraud; and other harm. We could incur substantial investigation, notification, remediation, and litigation costs; face regulatory inquiries and enforcement; suffer reputational damage; and experience revenue or client losses. The occurrence, frequency, and impact of these incidents are difficult to predict, and our insurance coverage may be inadequate to compensate for all losses.

Read in the 10-K filed Mar 30, 2026 ↗

We may fail to realize the anticipated benefits and synergies from acquisitions, including the BTC Merger and UTXO Merger, which could adversely affect our business, financial condition, and operating results. The success of these acquisitions depends on our ability to successfully integrate the acquired businesses, grow revenue, realize targeted synergies, and achieve anticipated strategic benefits. We expect to continue to evaluate and pursue potential mergers, acquisitions, investments, joint ventures, and other strategic transactions intended to acquire more Bitcoin, expand services and products, enhance technology capabilities, acquire talent, increase scale, and enter new markets. These transactions involve numerous risks and uncertainties that could prevent us from realizing anticipated benefits and could adversely affect our business, results of operations, financial condition, and cash flows.

Read in the 10-K filed Mar 30, 2026 ↗

computer malfunctions, may harm or result in the loss of Collectible Avatars, blockchain technology, and cryptocurrencies we control.

Read in the 10-K filed Feb 6, 2026 ↗

Industry competition, including competition from decentralized finance platforms, cryptocurrencies and blockchain technologies, could disrupt our business model and adversely affect our revenues, market share or liquidity.

Read in the 10-K filed Feb 24, 2026 ↗

The rapid emergence and increasing adoption of DeFi platforms, cryptocurrencies and related blockchain-enabled financial products and services could disrupt traditional banking services and accelerate competitive pressures on our business. As customers and counterparties gain access to alternative platforms that facilitate payments, lending, trading, custody, settlement and other financial services outside of, or with reduced reliance on, traditional financial institutions, we may experience reduced demand for certain of our products and services, lower volumes and compression of pricing and fee incomes. If we do not effectively develop, acquire, partner with or otherwise adapt our products to respond to evolving customer preferences and competitive dynamics, then we may lose customers to existing or new competitors, including non-bank competitors, resulting in reduced market share and lower revenues.

Read in the 10-K filed Feb 24, 2026 ↗

Continued growth in the acceptance of DeFi platforms, cryptocurrencies and blockchain technologies could also reduce traditional banking deposits and income streams and increase volatility in our deposit base, which could adversely affect our liquidity position, funding costs and overall financial condition. The evolving regulatory and supervisory environment applicable to DeFi platforms, cryptocurrencies and blockchain technologies may increase our compliance costs, constrain our ability to pursue strategic initiatives or engage in certain activities and heighten our exposure to reputational and operational risks. Developments in the regulatory landscape, such as the enactment and implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act) and potential enactment of the Digital Asset Market Clarity Act of 2025 (CLARITY Act) or similar market structure legislation, may also affect our clients’ needs and expectations for products and services. In addition, adverse events involving DeFi platforms and cryptocurrencies, including security breaches, fraud, market manipulation, insolvencies or other failures, could negatively impact customer confidence in financial institutions generally or in us, even if we are not directly involved, and thereby adversely affect our business and results of operations.

Read in the 10-K filed Feb 24, 2026 ↗

Our industry is evolving and our business model is shifting toward data center development alongside bitcoin mining.

Read in the 10-K filed Mar 2, 2026 ↗

Changes to laws, regulations, or enforcement priorities may adversely impact our Bitcoin Mining and related activities.

Read in the 10-K filed Mar 2, 2026 ↗

High bitcoin transaction fees may reduce demand for bitcoin and adversely affect our operations and growth.

Read in the 10-K filed Mar 2, 2026 ↗

Bitcoin faces scaling obstacles which may adversely affect demand for bitcoin and our Bitcoin Mining operations.

Read in the 10-K filed Mar 2, 2026 ↗

We operate in a rapidly evolving industry and have an evolving business model and strategy, including our increasing focus on constructing and operating data centers, in addition to bitcoin mining.

Read in the 10-K filed Mar 2, 2026 ↗

The digital assets industry is rapidly evolving, and we expect the services, technologies and market dynamics associated with it to continue to change. As a result, aspects of our business model and strategy may need to evolve in order for us to remain competitive and responsive to industry developments. From time to time, we may modify elements of our business model or pursue strategic initiatives that complement our power portfolio and current operations. We are exploring opportunities to expand our revenue sources, including a business transition to constructing and operating data centers which may be used for AI/HPC applications. We cannot assure you that these or any other modifications to our strategy will be successful, that they will achieve their intended objectives, or that they will not adversely affect our business. Strategic changes may also increase the complexity of our operations and place significant demands on our management team, personnel, systems, infrastructure, financial resources, and internal controls.

Read in the 10-K filed Mar 2, 2026 ↗

Additionally, our ability to manage growth effectively is uncertain. Failure to do so could harm our reputation, limit our ability to grow, and negatively affect our operating results. We also may not successfully identify or capitalize on emerging trends or new market opportunities within the digital assets industry, the data center market, or other markets we may pursue, which could result in missed opportunities and competitive disadvantages. Changes to our business model or entry into new markets may further subject us to additional regulatory scrutiny and new or expanded compliance obligations, including licensing, permitting, and other regulatory requirements. Any of the foregoing risks could have a material adverse effect on our business, prospects, financial condition, and results of operations.

Read in the 10-K filed Mar 2, 2026 ↗

We believe that transitioning to a data center business has the potential to complement our existing business model by providing more stable, long-term, and higher-margin revenue than our Bitcoin Mining operations. We also believe that leveraging our existing infrastructure to serve data center customers may offer more consistent revenue and lower risk than our traditional Bitcoin Mining business. However, this initiative is in its early stages, and the success of our data center strategy is uncertain and may not develop as anticipated. The performance of our data center business may be affected by various factors, including the availability, reliability, and timing of power supply; increased community scrutiny of data center resource use, including land, water, and power, resulting in stricter requirements from permitting authorities; supply chain disruptions, including constraints in local labor availability; changes in tariff policies or the adoption of more restrictive trade regulations; and our ability to retain or develop the specialized expertise required to operate and scale a data center business. If any of these challenges arise, or if we are otherwise unable to successfully implement or execute our data center strategy, our business, prospects, financial condition, and results of operations could be materially and adversely affected.

Read in the 10-K filed Mar 2, 2026 ↗

The industries in which we operate are highly competitive and continuously evolving. We expect competition to further intensify as existing and new competitors introduce new offerings or enhance existing offerings and as the industries that we operate in continue to grow. As we continue to expand in our existing markets and enter new markets, we compete against an increasing number of companies operating both within North America and abroad, that may be more established or have greater financial and other resources and/or expertise. Driven by the proliferation of energy-intensive applications such as bitcoin mining and HPC, demand for energy capacity continues to outpace supply. Our competitors may have greater financial, technical, and operational resources, longer operating histories, and stronger brand recognition than we do. To compete effectively, we must accurately anticipate technological developments, supply chain disruptions and regulatory constraints, our need for additional power and continue to innovate in the design, management, and operation of data centers, including those used to support AI/HPC applications. We may face difficulties expanding and improving our data centers at the pace necessary to remain competitive. Competitors with greater resources, experience, or industry relationships may be better positioned to secure strategic acquisitions, partnerships, or customer relationships that are critical to scaling data center operations. If we are unable to innovate effectively, maintain or grow our data center operations, or compete successfully against current and future competitors, our business, financial condition, and results of operations could be materially and adversely affected. Any such developments could also negatively impact the trading price of our securities.

Read in the 10-K filed Mar 2, 2026 ↗

We generate revenue from Bitcoin Mining operations primarily through the receipt of block rewards for successfully validating transactions and adding new blocks to the Bitcoin blockchain. The total supply of bitcoin is finite, permanently capped at 21.0 million coins, and the number of new bitcoin issued per block decreases approximately every four years pursuant to the bitcoin protocol, in an event commonly referred to as a “halving.” The final bitcoin is expected to be mined around the year 2140. As of December 31, 2025, approximately 20.0 million bitcoin had been mined and were in circulation. As the bitcoin supply approaches its maximum limit, the block reward will continue to decline. Once the final new bitcoin has been issued, miners will no longer receive block rewards and will instead rely solely on transaction fees associated with the blocks they validate. Historically, transaction fees have represented a relatively small portion of total mining revenue. Although transaction fees have increased at various times due to network usage and reduced new-bitcoin issuance, we cannot predict whether such fees will increase, or remain at levels, sufficient to offset the decline in block rewards over time. If transaction fees do not rise to levels that support profitable mining operations, or if the economic incentives to mine otherwise diminish, our ability to generate revenue from Bitcoin Mining could be materially and adversely affected. In such circumstances, our business, financial condition, and results of operations could suffer, and the market price of our securities could be adversely affected.

Read in the 10-K filed Mar 2, 2026 ↗

A bitcoin miner’s likelihood of successfully validating a block and earning the associated block reward is directly correlated to the miner’s hash rate relative to the global network hash rate. As adoption of bitcoin has increased, demand for bitcoin has drawn additional mining participants into the industry, resulting in sustained growth of the global network hash rate. As more miners enter the market and more efficient mining equipment is deployed, the global network hash rate is expected to continue increasing. Consequently, unless we are able to grow our hash rate at a pace consistent with industry growth, our probability of earning block rewards will decline. To remain competitive, we believe we must continue to obtain and deploy more efficient and energy-effective miners, both to replace units that are lost to ordinary wear-and-tear and to expand our hash rate to keep pace with increases in the global network hash rate. These miners are highly specialized servers that are difficult to manufacture at scale. As a result, only a limited number of suppliers are capable of providing miners in the quantities and performance specifications required by large-scale operators. Demand for new miners typically increases in periods of elevated bitcoin prices, and we have observed corresponding increases in miner pricing during such periods. If we are unable to procure an adequate number of new miners on acceptable terms, or if we are unable to access sufficient capital to fund the acquisition and deployment of such miners, we may be unable to grow our hash rate or maintain our competitive position. Any inability to expand or maintain our hash rate could adversely affect our business, financial condition, and results of operations, and could negatively impact the market price of our securities.

Read in the 10-K filed Mar 2, 2026 ↗

Our expansion into data centers may divert resources from our core Bitcoin Mining operations, limit our power capacity for mining, and introduce operational complexity.

Read in the 10-K filed Mar 2, 2026 ↗

Although we intend to continue certain of our Bitcoin Mining operations, our strategic expansion into data center development may divert capital, personnel, infrastructure and other resources away from our mining business. In particular, allocating power capacity to data center workloads may reduce the power available for bitcoin mining, which is a highly competitive and capital-intensive industry. Reduced power availability for mining could limit our ability to deploy additional hash rate at the pace of our competitors, potentially diminishing our market position and profitability. Operating multiple distinct business lines may also increase operational complexity and place additional demands on our management, technical teams, and support personnel. Managing these competing priorities may strain our resources, increase the risk of operational inefficiencies, and negatively affect our overall performance, strategic execution, and financial results. Any such developments could materially and adversely affect our business, prospects, financial condition, and results of operations.

Read in the 10-K filed Mar 2, 2026 ↗

The demand for power to support data centers, including AI/HPC workloads, has increased significantly, and we believe that by allocating a portion of our available power capacity to AI/HPC customers, while continuing to operate our bitcoin mining business, may create long-term value for our stockholders. We are in the process of developing scalable data center platforms at our Corsicana Facility and Rockdale Facility. As we pursue this expansion, we may face reputational harm, liability exposure, and adverse financial impacts arising from perceptions that we are shifting away from our core bitcoin-mining business, challenges associated with execution or integration, or increased scrutiny from investors and participants in the broader digital asset industry. Any perception that we are deprioritizing bitcoin mining could adversely affect our relationships with certain stakeholders, including investors, employees, and members of the crypto community. Data center customers also generally have heightened expectations regarding uptime, data integrity, cybersecurity, sustainability, and operational reliability. Any failure to meet these expectations, or any adverse incident involving our data center operations, could damage our reputation and credibility and negatively affect customer relationships. If we are unable to maintain or enhance our reputation, successfully execute our data-center strategy, or adapt to

Read in the 10-K filed Mar 2, 2026 ↗

We have recorded historical operating losses and negative cash flows from operations, particularly during periods in which the value of the bitcoin we mined did not exceed the associated operating, energy, personnel, and capital costs of our Bitcoin Mining activities. As part of our strategic growth plans, we have made, and expect to continue making, significant capital investments into data center operations, increase our workforce, and support the ownership and operation of our Facilities. These investments increase our cost base and may contribute to future losses if we are unable to generate sufficient revenue to offset these expenses. We cannot assure you that our revenue will exceed our associated costs or that we will achieve or maintain profitability. Continued operating losses could materially and adversely affect our business, financial condition, and results of operations.

Read in the 10-K filed Mar 2, 2026 ↗

broader digital asset ecosystem and contributed to increased price volatility across many digital asset markets, including the market for bitcoin. A continued loss of public confidence in digital asset exchanges may negatively impact the bitcoin ecosystem as a whole and may result in sustained or increased volatility.

Read in the 10-K filed Mar 2, 2026 ↗

Miner manufacturers have been affected by constrained semiconductor supply—particularly shortages involving the highly specialized ASIC chips used in bitcoin miners—as well as increased labor costs and broader disruptions to global supply chains. These factors have contributed to higher prices for new miners and may continue to do so. Inflationary pressures, combined with supply chain challenges, have increased the cost of goods, services, and personnel, raising both our capital expenditures and operating costs. Until these global pressures ease, we expect to continue incurring elevated costs to obtain and deploy miners, and we may face difficulties securing the materials or pricing necessary to support our growth plans. Adverse macroeconomic, public health, or geopolitical developments may also reduce market confidence in Bitcoin, shift investor preferences toward less volatile assets, and impair our access to capital or other financial markets, potentially increasing our cost of capital. Any of these events could have a material adverse effect on our business, operations, financial results, and the value of the bitcoin we mine.

Read in the 10-K filed Mar 2, 2026 ↗

To maintain and further develop our Bitcoin Mining operations, we must procure mining hardware and other specialized technology. Additionally, the development and potential expansion of our Facilities requires large quantities of construction materials, specialized electricity distribution equipment and other critical components, all of which are in high demand and may be difficult to source. While we proactively procure products and materials from our suppliers in sufficient quantities to facilitate deployment at scale, we cannot predict the effect of the existing or future U.S. tariffs on imports, or the extent to which other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of products and materials we require for our operations, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business, financial condition, and results of operations.

Read in the 10-K filed Mar 2, 2026 ↗

Our ability to achieve and maintain profitability depends significantly on the market price of bitcoin. The price of bitcoin has experienced substantial historical volatility, including its recent decline beginning in October 2025, and may continue to fluctuate widely due to a variety of factors, including the actions of malicious or manipulative actors, perceived or actual scarcity, political or economic developments, regulatory changes, and market speculation that may contribute to “bubble”-type price dynamics. Unlike traditional securities exchanges, which impose rigorous listing standards and maintain extensive oversight of trading activity, many cryptocurrency trading platforms are lightly regulated or unregulated. Markets with less stringent oversight may pose increased risks of fraud, manipulation, and other abusive practices. Any such real or perceived lack of transparency, stability, or oversight could undermine confidence in the integrity of bitcoin markets and adversely affect the price of bitcoin.

Read in the 10-K filed Mar 2, 2026 ↗

As disclosed in Part I, Item 1. “Business” - “Regulatory” of this Annual Report, bitcoin and other crypto asset markets may be subject to increased scrutiny and regulation by the U.S. Congress and governmental agencies. Changes to laws, regulations, or enforcement priorities—whether directed at digital assets, mining operations, trading platforms, or participants—may adversely impact our Bitcoin Mining and related activities.

Read in the 10-K filed Mar 2, 2026 ↗

Bitcoin and the broader digital asset ecosystem have also been negatively impacted by bankruptcies, restructurings, and forced liquidations of certain cryptocurrency exchanges, lenders, funds, and other market participants, and additional failures or distress events could further depress bitcoin prices or reduce liquidity. Any sustained reduction in the price of bitcoin or market liquidity, or any associated deterioration in sentiment toward the digital asset sector, could adversely affect our reputation, increase our cost of capital, and negatively impact the profitability of our Bitcoin Mining operations.

Read in the 10-K filed Mar 2, 2026 ↗

High bitcoin transaction fees may reduce demand for bitcoin and adversely affect our Bitcoin Mining operations and growth prospects.

Read in the 10-K filed Mar 2, 2026 ↗

As block rewards on the Bitcoin blockchain decline over time, transaction fees have become an increasingly important incentive for miners to continue supporting the network. However, elevated transaction fees may limit the adoption of bitcoin as a means of

Read in the 10-K filed Mar 2, 2026 ↗

Bitcoin, like many other cryptocurrencies, faces significant scaling challenges that may lead to high transaction fees or slow transaction settlement times. The bitcoin network is limited in the number of transactions it can process per second, and efforts to increase throughput—such as increasing block size, implementing alternative scaling mechanisms, or researching techniques like sharding—may not prove effective or may introduce new risks or technical trade-offs. There is no assurance that any proposed or existing scaling solutions will successfully increase transaction capacity or be adopted by network participants. Widespread adoption of bitcoin as a means of payment depends, in part, on the ability of the network to efficiently handle growth in transaction volume. If scaling limitations persist or if technological improvements do not occur on the schedule or scale we anticipate, Bitcoin’s adoption as a payment method may stagnate or decline. Reduced adoption could decrease demand for bitcoin and negatively impact its market price. A decline in bitcoin prices could adversely affect the revenue we generate from our Bitcoin Mining operations and could materially and adversely impact our business, financial condition, results of operations, and the market price of our securities.

Read in the 10-K filed Mar 2, 2026 ↗

To remain competitive and preserve our ability to earn bitcoin rewards, we must continue to grow our deployed hash rate by acquiring and deploying new miners at a pace consistent with growth in the global network hash rate. If bitcoin prices are not sufficiently high to support ongoing capital investment in miners, or if we are unable to obtain miners in the quantities, quality, or pricing necessary to increase our hash rate, our hash rate may stagnate. Falling behind competitors in hash rate would reduce our chances of earning future bitcoin rewards, which could materially and adversely affect our business, financial condition, and results of operations.

Read in the 10-K filed Mar 2, 2026 ↗

We receive bitcoin rewards from our mining activities through participation in third-party mining pools. Mining pools allow participants to combine their processing power, and provide payouts to participants based on their contributed hash rate under the mining pool’s payout methodology. After deducting any applicable pool fees, the pool operator distributes bitcoin proportionally based on our contribution to the pool’s overall mining power, which may occur regardless of whether the mining pool successfully

Read in the 10-K filed Mar 2, 2026 ↗

Our Bitcoin Mining and data center operations require significant and continuous access to reliable electrical power and high-speed internet connectivity. Any prolonged interruption, shortage, curtailment, or capacity constraint affecting our power supply or internet access, whether due to equipment failure, weather events, grid instability, utility curtailments, regulatory actions, or other causes, could require us to reduce or suspend our operations. Any such disruption could materially and adversely affect our ability to mine bitcoin, provide data center services, generate revenue, and achieve expected returns on our infrastructure investments. If this occurs, our business and results of operations and financial condition may be materially and adversely affected.

Read in the 10-K filed Mar 2, 2026 ↗

There is ongoing regulatory uncertainty in the United States regarding climate and energy policy. Because Bitcoin Mining and data centers require substantial energy, the industries may become the target of future climate-related or energy-use regulations. New or

Read in the 10-K filed Mar 2, 2026 ↗

state to formally establish such a reserve. In January 2026, new legislation was filed in Texas to expand the reserve’s scope to include other major digital assets.

Read in the 10-K filed Mar 2, 2026 ↗

Although these developments may appear favorable and may suggest a trend toward regulatory clarity, the ultimate direction, scope, and impact of digital-asset-related legislation and regulation remain uncertain. Future regulatory actions could materially affect the use, transfer, custody, mining, or classification of bitcoin and other digital assets. Such changes could, among other things, impose new licensing, reporting, or compliance obligations; restrict or prohibit certain activities; or otherwise adversely affect our business model.

Read in the 10-K filed Mar 2, 2026 ↗

Bitcoin, bitcoin mining, and cryptocurrencies generally are permitted or tolerated in some jurisdictions, restricted in others, and outright banned in several countries. It is possible that federal, state, or local regulators in the United States could adopt laws, regulations, or policy actions that impose significant restrictions on, or fully prohibit, bitcoin mining or related activities. Any such action could make it impossible or impractical for us to continue operating our mining facilities without relocating our operations, which would be costly, time-consuming, and uncertain. Although bitcoin activities in the United States are currently subject to a patchwork of evolving and sometimes overlapping regulatory requirements, regulators could take new or intensified actions that severely limit or prohibit the ability to mine, acquire, own, hold, sell, transfer, or use bitcoin or other cryptocurrencies, or to exchange them for fiat currencies such as the U.S. dollar. Restrictions of this nature could materially reduce the utility, acceptance, and market value of bitcoin. Because the widespread use of bitcoin as a means of exchange remains limited globally, restrictive regulatory actions in key jurisdictions could have an outsized impact on its price and adoption. Any prohibition or material restriction on bitcoin mining, ownership, or use could result in a significant decline in the value of the bitcoin we mine or hold and could materially and adversely affect our business, prospects, financial condition, and results of operations. Such developments could also negatively impact the market price of our securities and harm investors.

Read in the 10-K filed Mar 2, 2026 ↗

Neither the SEC nor any other U.S. federal or state regulator has publicly stated whether they agree that ETH is a “security.” Despite the Executive Order titled “Strengthening American Leadership in Digital Financial Technology” which includes as an objective, “protecting and promoting the ability of individual citizens and private sector entities alike to access and … to maintain self-custody of digital assets,” ETH has not yet been classified with respect to U.S. federal securities laws. Therefore, while (for the reasons discussed below) we believe that ETH is not a “security” within the meaning of the U.S. federal securities laws, and registration of the Company under The Investment Company Act of 1940, as amended (the “Investment Company Act”) is therefore not required under the applicable securities laws, we acknowledge that a regulatory body or federal court may determine otherwise. Our belief, even if reasonable under the circumstances, would not preclude legal or regulatory action based on such a finding that ETH is a “security” which would require us to register as an investment company under the Investment Company Act.

Read in the 10-K filed Mar 9, 2026 ↗

We have also adapted our process for analyzing the U.S. federal securities law status of ETH and other cryptocurrencies over time, as guidance and case law have evolved. As part of our U.S. federal securities law analytical process, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. Our position that ETH is not a “security” is premised, among other reasons, on our conclusion that ETH does not meet the elements of the Howey test. Among the reasons for our conclusion that ETH is not a security is that holders of ETH do not have a reasonable expectation of profits from our efforts in respect of their holding of ETH. Also, ETH ownership does not convey the right to receive any interest, rewards, or other returns.

Read in the 10-K filed Mar 9, 2026 ↗

We acknowledge, however, that the SEC, a federal court or another relevant entity could take a different view. The regulatory treatment of ETH is such that it has drawn significant attention from legislative and regulatory bodies. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that ETH, or any other digital asset we might hold is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines, and penalties if Ether was determined to be a security by a regulatory body or a court. Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations, financial condition and prospects.

Read in the 10-K filed Mar 9, 2026 ↗

Recently, we have begun focusing on pursuing opportunities to expand our portfolio into digital assets. With respect to the 40% asset threshold under Section 3(a)(1)(A), following the May 2025 PIPE Offering, proceeds from the offering were used to acquire ETH, resulting in ETH comprising 98% of the Company’s total assets. Since we believe ETH is not an investment security, we do not hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting, or trading in securities within the meaning of Section 3(a)(1)(A) of the Investment Company Act.

Read in the 10-K filed Mar 9, 2026 ↗

ETH and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive questions under the Investment Company Act. There is a risk that assets or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes of the Investment Company Act, which would increase the percentage of securities held by us for Investment Company Act purposes. The SEC has requested information from a number of participants in the digital assets’ ecosystem, regarding the potential application of the Investment Company Act to their businesses. For example, in an action unrelated to the Company, in February 2022, the SEC issued a cease-and-desist order under the Investment Company Act to BlockFi Lending LLC, in which the SEC alleged that BlockFi was operating as an unregistered investment company because it issued securities and also held more than 40% of its total assets, excluding cash, in investment securities, including the loans of digital assets made by BlockFi to institutional borrowers.

Read in the 10-K filed Mar 9, 2026 ↗

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 ETH Treasury Management strategy, the manner in which our ETH 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 ETH holdings or other digital asset activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding ETH and other digital assets.

Read in the 10-K filed Mar 9, 2026 ↗

Legislative or regulatory change regarding the regulation of “commodities” by the Commodities Futures Trading Commission (“CFTC”) and the potential regulation of digital assets as “digital commodities” could subject us to additional regulatory burdens and oversight by the CFTC and could adversely affect the market price of ETH and the market price of our listed securities.

Read in the 10-K filed Mar 9, 2026 ↗

The CFTC has stated it believes, and judicial decisions involving CFTC enforcement actions have confirmed, that at least some digital assets fall within the definition of a “commodity” under the U.S. Commodities Exchange Act of 1936 (the “CEA”) and the rules promulgated by the CFTC thereunder (“CFTC Rules”). While the CFTC has enforcement authority to police against fraud and manipulation in spot commodity markets (including the spot market for digital assets that are commodities), the CFTC only has regulatory and supervisory jurisdiction with respect to “commodity interest” transactions, such as futures, options, and swaps on a commodity (including a digital asset commodity) and certain leveraged, margined, or financed transactions in commodities involving retail customers. Accordingly, we are not currently regulated or supervised by the CFTC and are not subject to the legal and regulatory obligations that are applicable to CFTC-registered entities under the CEA and CFTC Rules.

Read in the 10-K filed Mar 9, 2026 ↗

The regulation of digital assets in the U.S. is subject to change because of the enactment and adoption of new laws and regulations. For example, the proposed CLARITY Act recently passed by the U.S. House of Representatives and other draft digital asset market structure and regulation bills have proposed granting the CFTC additional regulatory and supervisory powers with respect to spot digital assets as “digital commodities.” While it is not possible to predict if and in what form such proposals will be adopted, if any, changes to or expansion of the jurisdiction of the CFTC with respect to activities in spot digital assets could result in the imposition of additional regulatory obligations and burdens, which could include registration, disclosure, reporting, and business conduct requirements. For example, it is possible that if the CLARITY Act were to become law as currently proposed, our ETH Treasury Management strategy could cause us to be deemed a “commodity pool” under the CEA such that our operators and advisors may need to register with the CFTC as commodity pool operators and comply with other CFTC regulations as well as the rules of the National Futures Association. Such additional regulatory burdens and oversight could materially increase the cost of our business, could adversely affect the market price of ETH, and in turn could adversely affect the market price of our listed securities.

Read in the 10-K filed Mar 9, 2026 ↗

The introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector issued crypto currencies, or significantly limit their utility. National governments around the world could introduce CBDCs, which could in turn limit the size of the market opportunity for cryptocurrencies, including ETH.

Read in the 10-K filed Mar 9, 2026 ↗

The Financial Crimes Enforcement Network, a division of the U.S. Treasury Department (“FinCEN”) regulates providers of certain services with respect to “convertible virtual currency,” including ETH. Businesses engaged in the transfer of convertible virtual currencies are subject to registration and licensure requirements at the U.S. federal level and also under U.S. state laws. While FinCEN has issued guidance that cryptocurrency mining, without engagement in other activities, does not require registration and licensure with FinCEN, FinCEN has not made similar pronouncements with respect to the operation of Ethereum validators. In addition, our engaging in decentralized finance activities could expose us to further risk in this regard.

Read in the 10-K filed Mar 9, 2026 ↗

ETH is a highly volatile asset. ETH is a highly volatile asset that has traded below $1,472 per ETH and above $4,821 per ETH on the Coinbase exchange in the calendar year 2025. Our ETH holdings significantly impact our financial results and the market price of our listed securities. Our ETH holdings could significantly affect our financial results and if we continue to increase our overall holdings of ETH in the future, they will have an even greater impact on our financial results and the market price of our listed securities. Our assets are concentrated in ETH. The vast majority of our assets are concentrated in our ETH holdings or other receipt ETH related tokens (i.e., LsETH, WeETH, etc.) from staking. The concentration of our assets in ETH limits our ability to mitigate risk that could otherwise be achieved by holding a more diversified portfolio of treasury assets. If there is a significant decrease in the price of ETH, we may experience a more pronounced impact on our financial condition than if we invested our cash in a more diverse portfolio of treasury assets. We primarily purchase ETH using proceeds from equity financings. Our ability to continue future purchases of ETH within our ETH Treasury Management strategy depends in significant part on our ability to continue raising capital to purchase ETH. If we are unable to obtain equity, equity-linked or debt financing on favorable terms or at all, we may not be able to successfully execute on our ETH Treasury Management strategy. Our ETH Treasury Management Strategy has not been tested over an extended period of time or under different market conditions. We are continually examining the risks and rewards of our strategy to acquire and hold ETH and to stake such ETH to generate staking rewards. This strategy has not been tested over an extended period of time or under different market conditions. For example, although we believe ETH has the potential to serve as a hedge against inflation in the long term, the short-term price of ETH declined in recent periods during which the inflation rate increased. If ETH prices were to decrease or our ETH Treasury Management strategy otherwise proves unsuccessful, our financial condition, results of operations, and the market price of our listed securities would be materially adversely impacted. Our ETH staking activities could result in “slashing risks” and loss of staked ETH. ETH staking exposes us to slashing risks, defined as a punitive mechanism built into the Ethereum network, designed to penalize validators and their delegators for misbehavior or failing to follow network rules, which could result in the loss of our staked ETH. Our ETH Treasury Management Strategy may result in partial or total loss of deployed principle. Our strategies may employ on-chain and off-chain trading, credit and investing both via on-team deployments as well as via external allocations. These may be ETH denominated, USD denominated, or other similar exposure types. As a result, we have a risk of loss of partial or the entirety of the deployed principal, typical of these aforementioned activities. We are subject to provider and counterparty risks, including risks relating to our custodians. Although we have implemented various measures that are designed to mitigate our counterparty risks, including by storing substantially all of the ETH and other ETH-related digital assets we own in custody accounts at U.S.-based, institutional-grade custodians and negotiating contractual arrangements intended to establish that our property interest in custodied ETH and other ETH-related digital assets are not subject to claims of our custodians’ creditors, applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts. If our custodially-held ETH and other ETH-related digital assets 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 ETH, or delaying or hindering our access to our ETH holdings or other ETH-related digital asset holdings, and this may ultimately result in the loss of the value related to some or all of such ETH and other ETH-related digital assets which could have a material adverse effect on our financial condition as well as the market price of our listed securities. The broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of ETH. A series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry have highlighted the counterparty risks applicable to owning and transacting in digital assets. Although these bankruptcies, closures, liquidations and other events have not resulted in any loss or misappropriation of our ETH or other ETH-related digital assets, nor have such events adversely impacted our access to our ETH or other ETH-related digital assets, they have, in the short-term, likely negatively impacted the adoption rate and use of ETH. Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price, and use of ETH, limit the availability to us of financing collateralized by ETH, or create or expose additional counterparty risks. Changes in the accounting treatment of our ETH holdings or ETH-related digital assets holdings could have significant accounting impacts, including increasing the volatility of our results. We have adopted ASU 2023-08 as of January 1, 2025, which requires us to measure our ETH holdings at fair value in our statement of financial position, and to recognize unrealized gains and losses from changes in the fair value of our ETH in net income each reporting period beginning January 1, 2025. ASU 2023-08 also requires us to provide certain interim and annual disclosures with respect to our ETH holdings. Due to the volatility in the price of ETH, we expect the measurement at fair value to have a material impact on our financial results in future periods, increase the volatility of our financial results, and affect the carrying value of our ETH on our balance sheet. ASU 2023-08 could also have adverse tax consequences. In addition, on September 30, 2025, the Treasury and the IRS issued interim guidance (the “Interim Guidance”) which, in relevant part, clarifies that a corporation may disregard unrealized gains and losses on its digital asset holdings when computing adjusted financial statement income for purposes of determining whether it is subject to the 15% corporate minimum alternative tax under the Inflation Reduction Act. The Treasury and IRS intend to issue revised proposed regulations similar to this Interim Guidance. These impacts could in turn have a material adverse effect on our financial results and the market price of our listed securities. Additionally, our LsETH digital assets holdings as of December 31, 2025 are accounted for at cost-less-impairment. Significant declines in the price of LsETH have, and may in the future, result in material impairment within our financial results.

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We have engaged in decentralized finance transactions and deploy ETH using liquid staking protocols, which present additional risk as opposed to simply holding our digital assets.

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Decentralized finance protocols also pose heightened regulatory concerns even beyond those that face digital asset networks and digital assets generally. The U.S. financial system is extensively regulated at both the federal and state level with a particular focus on intermediaries such as banks, broker-dealers, futures commission merchants, investment funds, investment advisers, financial asset exchanges, trading platforms, clearinghouses and custodians. U.S. laws and regulations impose specific obligations on financial services intermediaries both for the protection of their customers and for the protection of the U.S. financial system as a whole. These include, among others, capital requirements, activities restrictions, reporting and disclosure requirements and obligations to monitor the activities of their customers and to ensure that the intermediaries’ activities and the activities of their customers are conducted in accordance with applicable laws and regulations. Non-U.S. laws and regulatory requirements may impose similar obligations. By seeking to eliminate or substantially limit the role of traditional financial services intermediaries in lending, brokering, advisory, trading, clearing, custody and other financial services activities, DeFi protocols pose numerous challenges to the longstanding oversight framework developed under U.S. law and used by U.S. and other regulators. Legislative bodies and regulators may be required to adapt their regulatory models to accommodate decentralized financial activities, or take novel steps to supervise, limit or even prohibit decentralized financial activities. It is not possible to predict how or when these challenges will be resolved or what the impact on specific decentralized finance protocols will be, and it is likely that the decentralized finance industry will face a prolonged period of regulatory uncertainty. It is possible that some decentralized finance protocols will be subjected to costly and burdensome compliance regimes or even prohibited outright.

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Both decentralized finance protocols and liquid staking protocols typically rely on the use of smart contracts. Smart contracts are computer programs that run on a digital asset network or related protocol that execute automatically when certain conditions are met. Because smart contract functions typically cannot be stopped or reversed, vulnerabilities in or unforeseen consequences of their programming can have damaging effects for the underlying digital asset network or protocol and the value of digital assets that use or interact with such smart contracts. For example, in June 2016, a vulnerability in the smart contracts underlying a protocol that was deployed on the Ethereum network, The DAO, a distributed autonomous organization for venture capital funding, allowed an attack by a hacker to syphon approximately $60 million worth of ETH from The DAO into a separate account. In the aftermath of the theft, certain developers of and core contributors to the Ethereum network pursued a “hard fork” of the Ethereum network in order to erase any record of the theft. Despite these efforts, the price of ETH dropped approximately 35% in the aftermath of the attack and subsequent hard fork. In addition, in July 2017, a vulnerability in a smart contract for a multi-signature wallet software developed by Parity led to a $30 million theft of ETH, and in November 2017, a new vulnerability in Parity’s wallet software led to roughly $160 million worth of ETH being indefinitely frozen in an account.

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Other smart contracts, such as bridges between separate digital asset networks have also been manipulated, exploited or used in ways that were not intended or envisioned by their creators. Initial problems and continued problems with the development, design and deployment of smart contracts may have an adverse effect on the value of protocols, including liquid staking and decentralized finance protocols, built on smart contract platforms or other digital assets that rely on smart contract technology, including any liquid staking tokens such as LsETH. If any of the smart contracts with which we interact, whether decentralized finance, liquid staking, or otherwise, suffer from such manipulation or exploit, or otherwise do not function as intended or as we anticipate, our ETH and any LsETH or similar tokens we hold may be exposed.

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The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of ETH and adversely affect our business.

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As a result of our ETH treasury management strategy, our assets are concentrated in our ETH and other ETH-related digital assets holdings. Accordingly, the emergence or growth of digital assets other than ETH may have a material adverse effect on our financial condition. There are numerous alternative digital assets and many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain platforms or digital assets. Additionally, the Ethereum network has completed multiple major upgrades since then and may undertake additional upgrades in the future. If the mechanisms for validating transactions in other alternative digital assets are perceived as superior to the Ethereum network, those digital assets could gain market share relative to ETH.

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Additionally, central banks in some countries have started to introduce digital forms of legal tender. For example, China’s CBDC project was made available to consumers in January 2022, and governments including the United Kingdom, the European Union, and Israel have been discussing the potential creation of new CBDCs. Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete with, or replace, ETH and other digital assets as a medium of exchange or store of value. As a result, the emergence or growth of these or other digital assets could cause the market price of ETH to decrease, which could have a material adverse effect on our business, prospects, financial condition, and operating results.

Read in the 10-K filed Mar 9, 2026 ↗

decreased user and investor confidence in ETH, including due to the various factors described herein; investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, and investors; (ii) actual or expected significant dispositions of ETH by large holders, including the expected liquidation of digital assets associated with entities that have filed for bankruptcy protection and the transfer and sale of ETH associated with significant hacks, seizures, or forfeitures; and (iii) actual or perceived manipulation of the spot or derivative markets for ETH or spot ETH exchange-traded products (“ETPs”); negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, ETH or the broader digital assets industry, for example, (i) public perception that ETH can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023; (ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major participants in the ETH ecosystem; (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates; (iv) the actual or perceived environmental impact of ETH and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in ETH related processes, and (v) changes in government regulations ; changes in consumer preferences and the perceived value or prospects of ETH; competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets; a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for ETH purchase and sale transactions to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of ETH or adversely affect investor confidence in digital assets generally; developments relating to the ETH protocol that may impact (i) its security, speed, scalability, usability, or value, (b) failures to upgrade the protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the ETH protocol that introduce software bugs, security risks or other elements that adversely affect ETH; disruptions, failures, unavailability, or interruptions in service of trading venues for ETH; the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, trading venues, lending platforms, investment funds, or other digital asset industry participants; regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of ETH, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry; reductions in staking rewards of ETH, or increases in the costs associated with ETH staking, including increases in electricity costs and hardware and software used in staking, or new or enhanced regulation or taxation of ETH staking, which could further increase the costs associated with ETH staking, any of which may cause a decline in support for the Ethereum protocol; transaction congestion and fees associated with processing transactions of ETH or lengthened periods to exit ETH staking or other delays to unstaking or withdrawing ETH from staking protocols; ETH staking exposes us to slashing risks, defined as a punitive mechanism built into the Ethereum network, designed to penalize validators and their delegators for misbehavior or failing to follow network rules, which could result in the loss of our staked ETH; macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations; and developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography used by the ETH blockchain becoming insecure or ineffective.

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We may be subject to regulatory developments related to digital assets and digital asset markets, which could adversely affect our business, financial condition, and results of operations.

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As digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets are 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 digital assets. 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 digital assets or the ability of individuals or institutions such as us to own or transfer digital assets.

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On January 23, 2025, President Trump issued an executive order titled “Strengthening American Leadership in Digital Financial Technology” (the “Executive Order”) aimed at supporting “the responsible growth and use of digital assets, blockchain technology and related technologies across all sectors of the economy.” The Executive Order also established an interagency working group that is tasked with “proposing a Federal regulatory framework governing the issuance and operation of digital assets” in the United States. Pursuant to this Executive Order, the working group released a report in July 2025 outlining the administration’s recommendations to Congress and various agencies reflecting the administration’s “pro-innovation mindset toward digital assets and blockchain technologies.” In particular, the report recommends that Congress enact legislation regarding self-custody of digital assets, clarifying the applicability of Bank Secrecy Act obligations with respect to digital asset service providers, granting the Commodities Futures Trading Commission (the “CFTC”) authority to regulate spot markets in non-security digital assets, prohibiting the adoption of a central bank digital currency (“CBDC”), and clarifying tax laws as relevant to digital assets. In addition, the report recommends that agencies reevaluate existing guidance on digital asset activities, use existing authorities to enable the trading of digital assets at the federal level, embrace DeFi, launch or relaunch digital asset innovation efforts, and promote U.S. private sector leadership in the responsible development of cross-border payments and financial markets technologies, among others.

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There have also been several bills introduced in Congress that propose to establish additional regulation and oversight of the digital asset markets. The Digital Asset Market Clarity Act of 2025 (the “CLARITY Act”) was passed by the U.S. House of Representatives on July 17, 2025, and, as of the date of this report, remains pending before the Senate. In addition, also in July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (the “GENIUS Act”) became the first federal law specifically regulating the issuance, custody and other stablecoin-related matters in the United States. If enacted, the CLARITY Act would establish a federal framework for the regulation of certain digital asset markets and digital asset trading platforms in the United States.

Read in the 10-K filed Mar 9, 2026 ↗

It is difficult to predict whether, or when, as a result of these developments, Congress will grant additional authorities to the SEC or other regulators, what the nature of such additional authorities might be, how additional legislation and/or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new regulations or changes to existing regulations might impact the value of digital assets generally and ETH held by the Company specifically. The consequences of increased federal regulation of digital assets and digital asset activities could have a material adverse effect on our business, results of operations, financial condition, and prospects, as well as the market price of ETH, which in turn could adversely affect the market price of our listed securities.

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The availability of spot ETPs for ETH and other digital assets may adversely affect the market price of our listed securities.

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Although ETH and other digital assets have experienced a surge of investor attention since ETH was invented in 2015, until recently, investors in the United States had limited means to gain direct exposure to ETH through traditional investment channels, and instead generally were only able to hold ETH through “hosted” wallets provided by digital asset service providers or through “unhosted” wallets that expose the investor to risks associated with loss or hacking of their private keys. Given the relative novelty of digital assets, general lack of familiarity with the processes needed to hold ETH directly, as well as the potential reluctance of financial planners and advisers to recommend direct ETH holdings to their retail customers because of the manner in which such holdings are custodied, some investors have sought exposure to ETH through investment vehicles that hold ETH and issue shares representing fractional undivided interests in their underlying ETH holdings. These vehicles, which were previously offered only to “accredited investors” on a private placement basis, have in the past traded at substantial premiums to net asset value, possibly due to the relative scarcity of traditional investment vehicles providing investment exposure to ETH.

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As a result of the foregoing factors, availability of spot ETPs for ETH and other digital assets could have a material adverse effect on the market price of our listed securities.

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The LsETH token is relatively new and the market for LsETH may be subject to manipulation, limited transparency, inconsistent pricing sources and episodic illiquidity. The price information available in the market may not reflect executable prices or sufficient market depth and there can be no assurance that we would be able to sell our LsETH at the quoted market price, or at all. Because changes in the fair value of digital assets may impact earnings, limitations in market liquidity or pricing reliability for LsETH could increase volatility in our reported results. In addition, the market infrastructure supporting LsETH remains nascent, and future developments in protocol mechanics, exchange support or regulatory oversight may materially impact pricing, liquidity and valuation methodologies. Accordingly, the market value amounts reported for LsETH may not reflect the amount that could ultimately be realized upon redemption or sale, and actual realizable values could materially differ.

Read in the 10-K filed Mar 9, 2026 ↗

Staked ETH is also subject to lock-up periods during which it cannot be withdrawn or sold. This lack of liquidity could limit our ability to respond to market changes or our financial needs. We could engage in other DeFi activities with liquid staking tokens. While we anticipate that the price of other ETH-related digital assets, such as liquid staking tokens, will correlate to ETH itself, there is a possibility that prices will diverge. This could especially happen if the validators deployed with a smart contract are subject to slashing penalties, in which case we may be able to withdraw fewer ETH than we originally deposited.

Read in the 10-K filed Mar 9, 2026 ↗

We plan to purchase additional digital assets using primarily proceeds from equity and debt financings, but we may be unable to obtain such financings on favorable terms.

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Our ability to obtain equity or debt financing may in turn depend on, among other factors, the value of our digital asset holdings, investor sentiment and the public perception of ETH and other digital assets, our strategy and our value proposition. Accordingly, a significant decline in the market value of our digital asset holdings, our inability to monetize our ETH through staking, decentralized finance or other yield-generating activities, or a negative shift in these other factors may create liquidity and credit risks, as such a decline or such shifts may adversely impact our ability to secure sufficient equity or debt financing.

Read in the 10-K filed Mar 9, 2026 ↗

There are also volatility risks related to stablecoins, which are designed to have a relatively stable price relative to an underlying physical asset, most commonly a fiat currency, such as U.S. dollars, or an exchange-traded commodity. The stability of a stablecoin results from the underlying assets backing the stablecoin that are held by the stablecoin’s issuer in reserve accounts, among other factors such as the ability of a holder to redeem the stablecoin from its issuer at par. The issuers of certain stablecoins currently retain broad discretion to determine the composition and amounts of assets held in the issuers’ accounts backing those stablecoins, and to substitute assets other than the fiat currency that is initially deposited. The composition of backing assets varies considerably across popular stablecoins, with some stablecoins backed entirely by off-chain assets including cash or short-term, highly liquid assets, and others backed by assets significantly less liquid than cash or cash equivalents. For example, Circle, which issues USDC, reports that it holds cash and short-term cash equivalents to back its USDC stablecoins. We regularly transact in and hold stablecoins. As of December 31, 2025, USDC is the only stablecoin that we held. A lack of applicable law and regulation has afforded discretion to certain stablecoin issuers to determine the composition and amounts of assets backing those stablecoins. There is a risk that an issuer may be unable to liquidate enough backing assets if it were to face mass redemptions of its stablecoin, which could cause the price of the stablecoin to deviate from the price of the underlying fiat currency or other asset with which the stablecoin is designed to align in price. In extreme cases, such as a request to immediately redeem all or substantially all of a particular stablecoin in circulation, even stablecoins backed by reserves comprised primarily of cash and cash equivalents may be subject to instability or an inability of the stablecoin issuer to meet all redemption requests, as the market for short-dated U.S. government obligations might not be sufficiently price stable. Market participants have increasingly shown concern about the actual underlying liquidity and reserves for dollar stablecoins such as USDC. For example, according to reports, Circle had more than $3 billion of its USDC reserve funds on deposit at Silicon Valley Bank (“SVB”) which became temporarily inaccessible when SVB was placed into FDIC receivership in March 2023. Although these funds were ultimately made available, concerns related to Circle’s access to these funds caused USDC to temporarily fall below its $1.00 peg, and the total market capitalization of USDC decreased following this temporary depegging. If a stablecoin issuer were to fail to honor its redemption obligations, this could undermine public confidence in stablecoins and in digital assets more broadly, which could have a widespread impact on the crypto economy, causing the prices of other stablecoins and digital assets to become more volatile.

Read in the 10-K filed Mar 9, 2026 ↗

Volatility in stablecoins, operational issues with stablecoins (for example, technical issues that prevent settlement), concerns about the sufficiency of any reserves that support stablecoins, or regulatory concerns about stablecoin issuers or intermediaries, such as crypto asset spot markets, that support stablecoins, could have a significant impact on the global digital asset market and may adversely affect our business.

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Because stablecoins purport to be backed by underlying reserve assets, a fundamental issue in the event of the bankruptcy or insolvency of the issuer of a given stablecoin is which party possesses beneficial ownership of the underlying reserve assets: the holder of the stablecoin, or the issuer. If a particular stablecoin were structured in a manner that entitles its holder only to a contractual right to payment from the issuer (even if such payments are to be derived from the underlying assets), then the assets underlying the stablecoins may be considered to be the property of the issuer’s bankruptcy estate, such that all of the issuer’s creditors would be entitled to their pro rata share of such assets, with the stablecoin holder being treated as an unsecured creditor of the issuer. In such an event, if the issuer were to have insufficient funds or assets to satisfy the claims of its creditors, then the holder of a stablecoin would likely receive only a partial recovery, and not the full purported value of its stablecoin holdings. Conversely, if a particular stablecoin were structured in a manner that entitles its holder to absolute beneficial ownership of the underlying reserve assets, whereby the issuer holds bare legal title to the underlying assets but has no beneficial interest or property rights in such assets, then the holders would likely have a stronger claim on the underlying assets in the event of a bankruptcy or insolvency of the issuer. However, due to the novelty of stablecoins, courts have not yet considered the treatment of underlying reserve assets in the context of a bankruptcy or insolvency of a stablecoin issuer, and there can be no certainty as to a court’s determination in such circumstances.

Read in the 10-K filed Mar 9, 2026 ↗

Our Common Stock has traded below the value of the digital assets we hold and may trade at a discount to the value of the digital assets in the future.

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Our Common Stock, par value $0.0001 per share has, and may in the future, trade at a discount to the value of our holdings of ETH and ETH-related digital assets, to the extent investors view our Common Stock as providing exposure to ETH and ETH-related digital assets. This may occur due to the rise in other traditional investment vehicles providing exposure to digital assets, including ETH, as well as the increase in the number of investors who may wish to purchase digital assets, including ETH, directly, among other reasons. For example, the SEC has recently provided guidance that will allow broker-dealers to custody digital assets on behalf of investors. The SEC has also rescinded Staff Accounting Bulletin 121 which, by forcing public companies to include on their balance sheets digital assets custodied on behalf of third parties, effectively prevented publicly traded banks from providing digital asset custodial services. Any movement of investor funds to such other sources, or a change in the market’s perception of digital asset treasury vehicles or in investor sentiment generally, could result in a decrease in price of our Common Stock and may impair our ability to engage in future financings.

Read in the 10-K filed Mar 9, 2026 ↗

The market price of our Common Stock may be highly volatile and could fluctuate significantly in response to a number of factors, many of which are beyond our control. These factors include, among others, changes in the market price of digital assets held by the Company, developments in digital asset markets, regulatory actions or announcements relating to digital assets, changes in investor sentiment toward digital asset-related companies, variations in our financial results, announcements regarding strategic transactions and general market and economic conditions. As a result, investors may experience substantial losses, and the market price of our Common Stock may not reflect the Company’s underlying asset value or operating performance at any given time.

Read in the 10-K filed Mar 9, 2026 ↗

All of the ETH and ETH-related digital assets we own is held in custody accounts at institutional-grade digital asset custodians. Security breaches and cyberattacks are of particular concern with respect to our ETH and ETH-related digital assets. ETH and other blockchain-based cryptocurrencies and the entities that provide services to participants in the ETH ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. A successful security breach or cyberattack could result in:

Read in the 10-K filed Mar 9, 2026 ↗

a partial or total loss of our ETH and ETH-related digital assets in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our ETH and ETH-related digital assets; harm to our reputation and brand; improper disclosure of data and violations of applicable data privacy and other laws; or significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

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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 blockchain ecosystem or in the use of the Ethereum network to conduct financial transactions, which could negatively impact us.

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Attacks upon systems across a variety of industries, including industries related to ETH, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate preventative measures. 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 ETH industry, including third-party services on which we rely, could materially and adversely affect our business.

Read in the 10-K filed Mar 9, 2026 ↗

Our primary provider risk with respect to our ETH and ETH-related digital assets are custodian performance obligations under the various custody arrangements we have entered into. In particular, we are reliant on our custodial relationships and agreements with Anchorage Digital Bank N.A. and its affiliates, as well as Coinbase Inc. and its affiliates. Any failures of our custodians to perform could have an impact on our business, prospects, financial condition and operating results. In addition, in the event of a termination of one or more of our custody agreements, the Company would be required to contract with an alternative custodian at terms and conditions that may not be as favorable as our current custody agreements.

Read in the 10-K filed Mar 9, 2026 ↗

A series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry have highlighted the perceived and actual counterparty and provider risk applicable to digital asset ownership and trading. Although these bankruptcies, closures and liquidations have not resulted in any loss or misappropriation of our ETH and ETH-related digital assets, nor have such events adversely impacted our access to our ETH and ETH-related digital assets, 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.

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While all of 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 ETH and ETH-related digital assets 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 ETH and ETH-related digital assets holdings, we may become subject to additional counterparty risks. Any significant non-performance by providers and counterparties, including in particular the custodians with which we custody substantially all of our ETH and ETH-related digital assets, could have a material adverse effect on our business, prospects, financial condition and operating results.

Read in the 10-K filed Mar 9, 2026 ↗

We face risks relating to the custody of our ETH and ETH-related digital assets, including the loss or destruction of private keys required to access our ETH and ETH-related digital assets and cyberattacks or other data loss relating to our ETH.

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We hold our ETH and ETH-related digital assets with regulated custodians that have duties to safeguard our private keys. Our custodial services contracts do not restrict our ability to reallocate our ETH and ETH-related digital assets among our custodians, and our ETH holdings may be concentrated with a single custodian from time to time. In light of the significant amount of ETH and ETH-related digital assets we hold, we will seek to engage additional custodians to achieve a greater degree of diversification in the custody of our ETH and ETH-related digital assets as the extent of potential risk of loss is dependent, in part, on the degree of diversification. If there is a decrease in the availability of digital asset custodians that we believe can safely custody our ETH and ETH-related digital assets, 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 ETH and ETH-related digital assets, and our ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected.

Read in the 10-K filed Mar 9, 2026 ↗

ETH and ETH-related digital assets 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 ETH and ETH-related digital assets are held. While the ETH 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 ETH and ETH-related digital assets held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custodians will be able to access the ETH and ETH-related digital assets 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. ETH, 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.

Read in the 10-K filed Mar 9, 2026 ↗

If the Ethereum network is disrupted or encounters any unanticipated difficulties, then the processing of transactions on the Ethereum network may be disrupted, which in turn may prevent us from depositing or withdrawing ETH and ETH-related digital assets from our accounts with our custodian or otherwise effecting ETH and ETH-related digital assets transactions. Such disruptions could include, for example: the price volatility of ETH; the insolvency, business failure, interruption, default, failure to perform, security breach, or other problems of participants, custodians, or others; the closing of ETH trading platforms due to fraud, failures, security breaches, or otherwise; or network outages or congestion, power outages, or other problems or disruptions affecting the Ethereum network.

Read in the 10-K filed Mar 9, 2026 ↗

Forks in the Ethereum protocol may lead to disruptions, security risks or declines in ETH value and therefore the value of the Company’s Common Stock. A “fork” occurs when a change to the Ethereum network’s source code creates two incompatible versions of the blockchain, resulting in separate networks. Forks may be planned (e.g., upgrades to the Ethereum protocol like the Merge or Dencun) or unplanned (e.g., due to software bugs or validator disagreement). Planned forks are designed to improve performance or introduce new features, but they may introduce bugs, security vulnerabilities or unexpected economic consequences. Unplanned forks can arise from client software inconsistencies or protocol failures, causing network instability or fragmentation. In either case, forks may result in operational outages, user confusion, replay attacks and reduced validator participation, all of which could undermine confidence in the Ethereum network and adversely affect the price of ETH. Our ETH and ETH-related digital assets holdings, staking activities and related treasury strategy could be materially negatively impacted in the event of such a fork.

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U.S. sanctions compliance obligations apply to all U.S. persons and cover transactions in digital assets. U.S. sanctions authorities and law enforcement have, in recent years, directed significant attention to sanctions compliance among the digital assets industry. For example, OFAC has issued updated advisories regarding the use of virtual currencies, added a number of digital asset exchanges and service providers to the SDN List, and engaged in several enforcement actions, including a series of enforcement actions that have either shut down or significantly curtailed the operations of several smaller digital asset exchanges associated with Russian and/or North Korean nationals.

Read in the 10-K filed Mar 9, 2026 ↗

In addition, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities or fund criminal or terrorist activities. This misuse, or the perception of such misuse, could lead to greater regulatory oversight of ETH and ETH platforms, and there is the possibility that law enforcement agencies could close or blacklist ETH platforms or other ETH-related infrastructure with little or no notice and prevent users from accessing or retrieving ETH held via such platforms or infrastructure.

Read in the 10-K filed Mar 9, 2026 ↗

● If the profit margins of digital asset validating operations are not sufficiently high, digital asset validators are more likely to immediately sell digital assets earned by validating, resulting in an increase in liquid supply of that digital asset, which would generally tend to reduce that digital asset’s market price.

Read in the 10-K filed Mar 9, 2026 ↗

● A reduction in digital assets staked by validators on the Ethereum Network could increase the likelihood of a malicious actor or botnet obtaining control. See “If a malicious actor or botnet obtains control of more than 33% of the validating power on the Ethereum Network, or otherwise obtains control over the Ethereum Network through its influence over core developers or otherwise, such actor or botnet could manipulate the Ethereum Network to adversely affect the value of our Common Stock.”

Read in the 10-K filed Mar 9, 2026 ↗

● Validators have historically accepted relatively low transaction confirmation fees on most digital asset networks. If validators demand higher transaction fees for recording transactions on the Ethereum Network or a software upgrade automatically charges fees for all transactions on the Ethereum Network, the cost of using ETH and ETH-related digital assets may increase and the demand for ETH and ETH-related digital assets may correspondingly decrease. Alternatively, validators could collude in an anti-competitive manner to reject low transaction fees on the Ethereum Network and force users to pay higher fees, thus reducing the attractiveness of the Ethereum Network. Higher transaction confirmation fees resulting through collusion or otherwise may adversely affect the attractiveness of the Ethereum Network, the value of ETH and ETH-related digital assets and the value of our Common Stock.

Read in the 10-K filed Mar 9, 2026 ↗

As corresponding increases in throughput lag behind growth in the use of digital asset networks, average transaction fees and settlement times may increase considerably. Increased transaction fees and decreased settlement speeds could preclude certain uses for Ether (e.g., micropayments), and could reduce demand for, and the price of, ETH and ETH-related digital assets, which could adversely impact the value of our Common Stock. However, reduced gas fees could signal lower demand for ETH and ETH-related digital assets.

Read in the 10-K filed Mar 9, 2026 ↗

In addition, in May 2019, the Bitcoin Cash network, a proof-of-work network, experienced a >50% attack when two large mining pools reversed a series of transactions in order to stop an unknown miner from taking advantage of a flaw in a then-recent Bitcoin Cash protocol upgrade. Although this particular attack was arguably benevolent, the fact that such coordinated activity was able to occur may have negatively impacted perceptions of the Bitcoin Cash network. Although the two attacks described above took place on proof-of-work-based networks, it is possible that a similar attack may occur on the Ethereum Network, which could negatively impact the value of ETH and the value of our Common Stock.

Read in the 10-K filed Mar 9, 2026 ↗

Digital asset networks and related protocols are often developed by a diverse set of contributors, but are also often developed by identifiable and high-profile contributors. The perception that certain high-profile contributors may no longer contribute to the applicable digital asset network or protocol may have an adverse effect on the market price of any related digital assets. For example, in June 2017, an unfounded rumor circulated that Ethereum protocol developer Vitalik Buterin had died. Following the rumor, the price of Ether decreased approximately 20% before recovering after Buterin himself dispelled the rumor. Some have speculated that the rumor led to the decrease in the price of ETH. In the event a high-profile contributor to the Ethereum Network, such as Vitalik Buterin, is perceived as no longer contributing to the Ethereum Network due to death, retirement, withdrawal, incapacity or otherwise, whether or not such perception is valid, it could negatively affect the price of ETH, which could adversely impact the value of our Common Stock.

Read in the 10-K filed Mar 9, 2026 ↗

Due to the unregulated nature and lack of transparency surrounding the operations of many ETH trading venues, ETH 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 ETH trading venues and adversely affect the value of our ETH and ETH-related digital assets.

Read in the 10-K filed Mar 9, 2026 ↗

ETH trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many ETH 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 ETH trading venues, including prominent exchanges that handle a significant volume of ETH trading and/or are subject to regulatory oversight, in the event one or more ETH trading venues cease or pause for a prolonged period the trading of ETH or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

Read in the 10-K filed Mar 9, 2026 ↗

We intend to offer clients direct access to select digital assets, which exposes us to new and uncertain financial, operational, legal, and regulatory risks that could adversely affect our business and financial results.

Read in the 10-K filed Feb 25, 2026 ↗

In 2026, the Company anticipates it will begin offering expanded client access to trading in digital assets including spot trading in select cryptocurrencies. Expansion of digital asset client offerings presents significant new risks to the Company, including risks related to digital asset custody, trading, settlement, and liquidity, and increased risk related to fraud and other illicit activity. Client demand for digital assets is uncertain and may fluctuate significantly due to market volatility, regulatory developments, or changes in investor sentiment. The regulatory landscape for cryptocurrencies is evolving and uncertain, and changes in laws, regulations, or regulatory interpretations could prohibit or limit our ability to offer these products, increase compliance costs, or expose us to increased regulatory scrutiny.

Read in the 10-K filed Feb 25, 2026 ↗

Digital assets function as bearer instruments controlled with private keys, and transactions in digital assets are generally irreversible. Due to the unique nature of digital assets, the loss, theft, compromise, or destruction of private keys could result in

Read in the 10-K filed Feb 25, 2026 ↗

the permanent loss of digital assets with no practical means of recovery. Because blockchain technology is relatively new, it is difficult to predict how it might be vulnerable to cybersecurity and fraud risks that could affect our business.

Read in the 10-K filed Feb 25, 2026 ↗

We expect to engage with third-party service providers to facilitate certain activities related to digital assets. These relationships present additional risks, including operational, reputational, and compliance risks that could adversely affect our business. Internal and third-party systems needed to effect client activity in digital assets are vulnerable to operational failures, cyberattacks, and fraud, and we may be held responsible for deficiencies in the controls or regulatory compliance of third-party service providers, even where we do not have direct oversight of their operations. Failure or breach of our or third-party service providers’ systems, cybersecurity controls, or operational processes could result in loss of client digital assets, which may not be recoverable in full or at all. Many crypto industry participants are relatively early-stage companies with limited history. There is no guarantee they will perform as reliably or efficiently as anticipated. Regulatory change could also affect the ability of third-party service providers to continue to operate or provide services for Schwab clients. Such events could result in material financial losses, legal or regulatory claims, and reputational harm, even if we are not at fault.

Read in the 10-K filed Feb 25, 2026 ↗

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 SUI. As of February 23, 2026, we held an aggregate of 105,407,044 SUI and loan receivables of 2,961,550 SUI, which we acquired for an aggregate purchase price of approximately $386.5 million, exclusive of fees and expenses, at an average price of $3.56 per SUI. With 80,896,554 million fully adjusted shares issued and outstanding (including unexercised Pre-Funded Warrants) as of February 23, 2026, the Company has grown to approximately 1.34 SUI per share of Common Stock, or $1.17 per share of Common Stock. Our SUI holding (including SUI loan receivables) represents approximately 88.8% of our digital asset holdings, with the remainder being USDC stablecoins at approximately 1.8% and suiUSDe stablecoins approximately 9.4%. The price of SUI has historically been subject to dramatic price fluctuations and is highly volatile. SUI is a highly volatile asset that has traded between $4.33 and $0.85 per SUI on Coinbase in the 12 months preceding February 23, 2026. More recently, during the fourth calendar quarter of 2025, SUI traded between approximately $3.62 and $1.35 per SUI. Moreover, digital assets, such as SUI, are relatively novel. SUI’s initial coin offering took place on April 20, 2023, and Sui’s Mainnet (blockchain protocol) was launched on May 3, 2023. 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 SUI.

Read in the 10-K filed Feb 27, 2026 ↗

Fluctuations in the trading prices of digital assets are likely to impact our financial results and the market price of our Common Stock. Our financial results and the market price of our Common Stock and our business and financial condition could be negatively impacted if the price of SUI decreased substantially, including as a result of:

Read in the 10-K filed Feb 27, 2026 ↗

public sentiment related to the actual or perceived environmental impact of digital assets, and related activities, including environmental concerns raised by private individuals and governmental actors related to the energy resources consumed in the mining process;

Read in the 10-K filed Feb 27, 2026 ↗

competition from other cryptocurrency assets that are believed to exhibit better speed, security, scalability, or other characteristics, or that are backed by governments, including the U.S. government;

Read in the 10-K filed Feb 27, 2026 ↗

correlations between the prices of digital assets, including the potential that a crash in one digital asset or widespread defaults on one digital asset exchange or trading venue may cause a crash in the price of SUI, or a series of defaults by counterparties on SUI asset exchanges or trading venues;

Read in the 10-K filed Feb 27, 2026 ↗

interruptions in service or failures of the principal markets for or market participants active in trading involving digital assets;

Read in the 10-K filed Feb 27, 2026 ↗

reductions in staking rewards validator rewards and other incentives of digital assets;

Read in the 10-K filed Feb 27, 2026 ↗

transaction congestion and fees associated with processing transactions of digital assets;

Read in the 10-K filed Feb 27, 2026 ↗

developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography being used by digital assets becoming insecure or ineffective; and

Read in the 10-K filed Feb 27, 2026 ↗

The growth of the digital assets industry in general, and the use and acceptance of SUI in particular, as well as other digital assets, may also impact the price of our digital asset holdings and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of digital assets, and SUI in particular, may depend, for instance, on public familiarity with digital assets, ease of buying and accessing the digital assets, institutional and consumer demand for SUI, and the availability and popularity of alternatives to bitcoin. Even if growth in bitcoin adoption occurs in the near or medium-term, there is no assurance that bitcoin usage will continue to grow over the long-term or that such growth will lead to a growth of the adoption of SUI.

Read in the 10-K filed Feb 27, 2026 ↗

Because SUI has no physical existence beyond the record of transactions on their respective blockchains, a variety of technical factors related to the Sui blockchain could also impact the price of SUI. For example, malicious attacks by stakers, inadequate staking fees to incentivize validating of transactions, hard forks of the blockchain into multiple blockchains, and advances in digital computing, algebraic geometry and quantum computing could undercut the integrity of the blockchain and negatively affect the price of our digital asset holdings. The liquidity of SUI may also be reduced and damage to the public perception of SUI may occur, if financial institutions were to deny banking services to businesses that hold digital assets, provide digital asset-related services or accept digital assets as payment, which could also decrease the price of our digital asset holdings.

Read in the 10-K filed Feb 27, 2026 ↗

The trading prices of many digital assets, including SUI, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility in the future, including further decline in the trading prices of SUI, could have a material adverse effect on the Company.

Read in the 10-K filed Feb 27, 2026 ↗

The trading prices of many digital assets, including SUI, have experienced extreme volatility in recent periods and may continue to do so. For instance, there were steep increases in the value of certain digital assets over the course of 2021, and multiple market observers asserted that digital assets were experiencing a “bubble.” These increases were followed by steep drawdowns throughout 2022 in digital asset trading prices. SUI was launched in May 2023, and over the course of 2023 and 2024, prices of digital assets continued to exhibit extreme volatility. SUI reached a low price of $0.3639 in October 2023 and a high price of $5.34 on January 4, 2025. As of February 23, 2026, the price of SUI was $0.88 Like many digital assets, SUI surged in value in its initial trading period, but shortly thereafter saw a decline in price, including as a result of the broader sell-off in cryptocurrency markets following the events of October 10 (described below); the price continues to fluctuate.

Read in the 10-K filed Feb 27, 2026 ↗

Extreme volatility may persist. The digital asset markets may still be experiencing a bubble or may experience a bubble again in the future. For example, in the first half of 2022, each of Celsius Network, Voyager Digital Ltd., and Three Arrows Capital declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and negative publicity surrounding digital assets more broadly. In November 2022, “FTX” one of the largest digital asset exchanges by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency, which were subsequently corroborated by its CEO. Shortly thereafter, FTX’s CEO resigned, and FTX and many of its affiliates filed for bankruptcy in the United States, while other affiliates have entered insolvency, liquidation, or similar proceedings around the globe, following which the U.S. Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil securities and commodities fraud charges, against certain of FTX’s and its affiliates’ senior executives, including its former CEO, who was found guilty of these criminal charges in November 2023. In addition, several other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC (“Genesis”). In response to these events, the digital asset markets have experienced extreme price volatility and other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital asset markets. For example, after October 10, 2025, approximately $19 billion of leveraged positions unwound, exceeding even the FTX collapse in 2022. In 2025, within a few weeks, Bitcoin dropped from the low $120,000s into the low $100,000s and continued to drop further in 2026, while Ether and many smaller tokens suffered double‑digit percentage declines, with some altcoins briefly collapsing to near‑zero on thin order books. Data providers such as CoinGlass recorded more than 1.6 million traders liquidated and total futures open interest shrank by tens of billions of dollars in a day, underscoring how concentrated leverage and fragmented liquidity turned a sharp price move into the largest liquidation event in crypto’s history. These events have also negatively impacted the liquidity of the digital asset markets as certain entities affiliated with FTX engaged in significant trading activity. If the liquidity of the digital asset markets continues to be negatively impacted by these events, digital asset prices, including SUI, may continue to experience significant volatility or price declines, and confidence in the digital asset markets may be further undermined. In addition, regulatory and enforcement scrutiny has been significant, including from, among others, the U.S. Department of Justice, the SEC, the CFTC, the White House and Congress, as well as state regulators and authorities. It is not possible to predict all of the risks that regulatory enforcement may pose to the Company, its service providers or to the digital asset industry as a whole.

Read in the 10-K filed Feb 27, 2026 ↗

Consumer preferences and perceptions of SUI specifically and digital assets generally;

Read in the 10-K filed Feb 27, 2026 ↗

Increased competition from other forms of digital assets or payment services; and

Read in the 10-K filed Feb 27, 2026 ↗

As of February 23, 2026, we held an aggregate 105,407,044 SUI and loan receivable of 2,961,550 SUI, which represents approximately 88.8% of our digital asset holdings including SUI loan receivable, with the remainder being USDC stablecoins at approximately 1.8% and suiUSDe stablecoins at approximately 9.4%. Our significant concentration of SUI ownership creates risk that a large holder or consortium of SUI holders could obtain effective control over network governance and consensus mechanisms. If a single entity accumulates a sufficient percentage of total SUI tokens, it could potentially influence transaction validation, protocol upgrades, or fee structures, which might adversely impact other stakeholders or destabilize the network. Furthermore, concentration increases the risk of contentious hard forks, which have fragmented their communities and impacted asset values. For example, in 2017 a group within the Bitcoin community advocated for increasing the block size limit to allow for more transactions, which ultimately lead to the creation of Bitcoin Cash, which features a larger block size. Hard forks can trigger significant price fluctuations in both the original and new cryptocurrencies, because speculation and uncertainty surrounding the hard fork can lead to increased volatility, making it difficult for investors to predict price movements. Due to our concentration of SUI in our treasury strategy, any such occurrence could lead to volatility or a decrease in the market price of our Common Stock.

Read in the 10-K filed Feb 27, 2026 ↗

Custodial arrangements pose additional risks. Our primary counterparty risk with respect to our SUI is custodian performance obligations under the custody arrangement we have entered into. BitGo is the custodian for all of our SUI and could experience bankruptcy or insolvency. Although BitGo has an insurance policy supporting its cold wallets, the Company has not purchased any additional insurance cover, and BitGo is not FDIC-insured. FTX, a leading cryptocurrency exchange, filed for bankruptcy in November 2022 following an estimated $8 billion liquidity shortfall due to a surge of withdrawals from the exchange, forcing the exchange to halt customer withdrawals. A series of additional recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry, including the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, and Genesis Global Capital, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry, including Signature Bank and Silvergate Bank, SEC enforcement actions against Coinbase, Binance Holdings Ltd. (since withdrawn), and Kraken, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s Department of Business and Industry, 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 SUI, nor have such events adversely impacted our access to our SUI, 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 current and future custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency or similar proceedings. If a similar bankruptcy event occurred for BitGo, there is a risk of partial or total loss of our SUI holdings and delays in asset recovery, which could materially impact financial condition and operations.

Read in the 10-K filed Feb 27, 2026 ↗

We intend to mitigate counterparty risks through various measures, including maintaining substantially all of our SUI with BitGo, a well known custodian, and negotiating contractual terms designed to confirm that our custodially‑held SUI remains our property and is not subject to claims of a custodian’s creditors. However, insolvency law related to the custodial holding of digital assets is still developing, and there is no guarantee that these measures would be upheld in an insolvency proceeding. If custodially‑held SUI were nevertheless deemed property of a custodian’s bankruptcy estate, we could be treated as a general unsecured creditor, which could restrict or prevent our ability to exercise ownership rights and could result in a partial or complete loss of the associated value. Even if we ultimately prevailed in asserting our ownership rights, access to our SUI could be delayed or otherwise impaired during the pendency of any insolvency proceeding. Any such outcome could materially adversely affect our financial condition and the market price of our Common Stock.

Read in the 10-K filed Feb 27, 2026 ↗

In addition to forks, a digital asset may become subject to a similar occurrence known as an “airdrop.” In an airdrop, the promotors of a new digital asset announce to holders of another digital asset that such holders will be entitled to claim a certain amount of the new digital asset for free, based on the fact that they hold such other digital assets. Airdrops may be conducted by sending a token to the holders of set amounts of SUI. Alternatively, airdrops may involve a user being entitled to claim tokens on a decentralized application, second-layer network or entirely separate digital asset network. As such, a user entitled to receive airdrops may be required to take little or significant actions in order to receive such airdropped tokens. Shareholders may not receive the benefits of any forks, the Company may not choose, or be able, to participate in an airdrop, and the timing of receiving any benefits from a fork, airdrop or similar event is uncertain.

Read in the 10-K filed Feb 27, 2026 ↗

Historically, the cryptocurrency markets have 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 SUI and other digital assets at favorable prices or at all. Further, SUI and other digital assets we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as those available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, almost all of our digital asset holdings are comprised of SUI and 99% of our SUI is being staked. The staking process is continuously adjusted in scale, in line with network and market conditions, with adjustments aimed to ensure the Company maintains sufficient liquidity for redemptions on any given business day but any such adjustments are subject to a one-day unbonding period. Finally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered SUI or otherwise generate funds using our SUI holdings, including in particular during times of market instability or when the price of SUI has declined significantly. If we are unable to sell our SUI or other digital assets, enter into additional capital raising transactions using SUI or other digital assets as collateral, or otherwise generate funds using our SUI or other digital assets holdings, or if we are forced to sell our SUI or other digital assets at a significant loss, in order to meet our working capital requirements, our business and financial condition could be materially adversely impacted.

Read in the 10-K filed Feb 27, 2026 ↗

We are also exposed to market manipulation risks such as front-running and wash trading, which risk is enhanced due to the concentration of SUI in our treasury strategy. We have made significant investments in SUI, and plan to continue to do so in the future. Cryptocurrency markets, including those for SUI, may be susceptible to market abuse and manipulation, such as wash trading, coordinated pump-and-dump schemes, spoofing, and other forms of manipulative activity. Sophisticated traders or entities with privileged access to order flow may exploit weaknesses in exchange infrastructure to execute trades ahead of pending orders (front-running), artificially inflate trading volumes (wash trading), or otherwise distort the market price of SUI. Such activities can reduce market integrity and liquidity and create material volatility or losses for holders like us, which could create further risks to us as a result of our concentrated holding of SUI in our treasury strategy. If SUI is affected by these activities, we may experience substantial fluctuations in the fair value of its investment, which could negatively affect our financial condition, results of operations, and reputation. Further, regulatory oversight of cryptocurrency markets is evolving, and there is no assurance that existing or future regulations or market mechanisms will effectively deter or mitigate the impact of market manipulation. As a result, we remain exposed to additional risks and uncertainties relating to the price and liquidity of SUI, which may result in financial loss or impairment of value in its investment.

Read in the 10-K filed Feb 27, 2026 ↗

Our significant investment in SUI depends on third‑party custodians and trade execution partners for the safekeeping, transfer, and management of our digital assets. If any of these service providers were to experience financial distress, operational failure, insolvency, security breaches, or other forms of mismanagement, we could suffer partial or total loss of our SUI holdings, delays or failures in executing trades, or broader disruptions to liquidity and access.

Read in the 10-K filed Feb 27, 2026 ↗

The digital asset industry has experienced several high‑profile custodial and exchange failures. For example, in November 2022, FTX—a major global cryptocurrency exchange—filed for bankruptcy following an estimated $8 billion liquidity shortfall after a surge in customer withdrawals, resulting in the suspension of withdrawals. Public reports indicated that this collapse stemmed from operational mismanagement, including misuse of customer funds, inadequate financial controls, and overreliance on its proprietary FTT token. Events such as these highlight the operational, financial, and governance vulnerabilities that can exist within digital asset service providers.

Read in the 10-K filed Feb 27, 2026 ↗

Although we rely on third‑party custodians—such as BitGo, the custodian of our SUI holdings—who we believe implement security measures aligned with industry best practices, there can be no assurance that these measures will be effective. As the size of our SUI holdings grows, we may become a more attractive target for malicious actors. If we or any of our custodians are unable to identify, mitigate, or prevent new or evolving security threats, our digital assets could be subject to theft, loss, destruction, or other compromise.

Read in the 10-K filed Feb 27, 2026 ↗

Internal control failures may occur at BitGo, or other cryptocurrency custodians or exchanges we may utilize in the future.

Read in the 10-K filed Feb 27, 2026 ↗

The security and accessibility of our SUI assets are, in part, dependent on the integrity and reliability of the cryptocurrency custodians and exchanges used to hold, trade, or manage SUI. We currently utilize BitGo as custodian to hold all of our SUI assets. BitGo is a digital asset security firm established in 2013. Many cryptocurrency custodians, including BitGo, are relatively new and unregulated, and may be subject to internal control failures, including inadequate cybersecurity measures, poor risk management practices, or operational errors. Such failures can lead to asset loss, theft, suspension or freezing of accounts, delays in executing trades, or compromised private information. If a custodian or exchange we utilize to hold our SUI experiences an internal control failure, we may suffer partial or total loss of our SUI holdings, incur financial losses, experience disruptions in liquidity, or face reputational harm. Further, the regulatory environment relating to internal controls at cryptocurrency custodians and exchanges remains uncertain and fragmented, increasing the risk of internal control failures. There can be no assurance that our SUI assets will not be affected by such incidents, and the occurrence of internal control failures could materially adversely impact our financial condition and results of operations.

Read in the 10-K filed Feb 27, 2026 ↗

Substantially all of the SUI we own is held in custody accounts at BitGo, a well-known custodian. Security breaches and cyberattacks are of particular concern with respect to our SUI. SUI and other blockchain-based cryptocurrencies and the entities that provide services to participants in the SUI 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:

Read in the 10-K filed Feb 27, 2026 ↗

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 Sui ecosystem or in the use of the Sui network to conduct financial transactions, which could negatively impact us.

Read in the 10-K filed Feb 27, 2026 ↗

Attacks upon systems across a variety of industries, including industries related to SUI, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, we expect that unauthorized parties will attempt to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement 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 Sui industry, including third-party services on which we rely, could materially adversely affect our financial condition and results of operations.

Read in the 10-K filed Feb 27, 2026 ↗

We may be subject to regulatory developments related to cryptocurrency assets and cryptocurrency asset markets, which could adversely affect our business, financial condition, and results of operations.

Read in the 10-K filed Feb 27, 2026 ↗

As SUI 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 SUI. 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 SUI or the ability of individuals or institutions such as us to own or transfer SUI.

Read in the 10-K filed Feb 27, 2026 ↗

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 SUI or other forms of digital assets or the ability of individuals or institutions such as us to own or transfer SUI. For example, the U.S. executive branch, the SEC, the European Union’s Markets in Crypto Assets Regulation, among others have been active in recent years, and in the U.K., the Financial Services and Markets Act 2023, or FSMA 2023 became law. It is not possible to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC, “CFTC”, or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, nor how any new regulations or changes to existing regulations might impact the value of digital assets generally. The consequences of increased regulation of digital assets and digital asset activities could adversely affect the market price of SUI we intend to own, and in turn adversely affect the market price of our Common Stock. See “Item 1 Business – Regulation of SUI and Government Oversight” for additional information.

Read in the 10-K filed Feb 27, 2026 ↗

The growth of the digital assets industry in general, and the use and acceptance of SUI in particular, may also impact the price of SUI and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of SUI may depend on public familiarity with digital assets, ease of buying, accessing or gaining exposure to SUI, institutional demand for SUI as an investment asset, the participation of traditional financial institutions in the digital assets industry, and the availability and popularity of alternatives to SUI. Even if growth in SUI usage occurs in the near or medium-term, there is no assurance that SUI usage will continue to grow over the long-term.

Read in the 10-K filed Feb 27, 2026 ↗

The liquidity of SUI may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for SUI and other digital assets.

Read in the 10-K filed Feb 27, 2026 ↗

While we maintain anti-money laundering (AML), know-your-customer (KYC), and other due diligence procedures to screen counterparties, these processes may not be foolproof. If a sanctioned entity or individual evades detection and we complete a transaction with such a party, we could be subject to regulatory and legal penalties, reputational damage, and the forced unwinding of affected transactions. In 2022, several major cryptocurrency companies faced significant reputational damage and incurred substantial costs for remediation efforts after their transactions were linked to sanctioned addresses by regulators like the Office of Foreign Assets Control (OFAC). On October 11, 2022, OFAC announced a more than $24.28 million settlement with Bittrex Inc., a cryptocurrency exchange. The settlement resolved 116,421 transactions with persons with an internet protocol (IP) address or physical address in the Crimea region of Ukraine, Cuba, Iran, Sudan and Syria that resulted in violations of multiple U.S. sanctions programs. If we enter into transactions involving our SUI holdings, there is risk over similar oversights, which could lead to significant fines from OFAC and impact our financial results.

Read in the 10-K filed Feb 27, 2026 ↗

We believe that SUI is not a security, but neither the SEC nor any other U.S. federal or state regulator has publicly stated whether they agree with our assessment. Despite the Trump Administration’s Executive Order titled “Strengthening American Leadership in Digital Financial Technology” which includes as an objective, “protecting and promoting the ability of individual citizens and private sector entities alike to access and … to maintain self-custody of digital assets,” SUI has not yet been classified with respect to U.S. federal securities laws. Therefore, while (for the reasons discussed below) we have concluded that the SEC is not likely to classify SUI as a “security” within the meaning of the U.S. federal securities laws, and so registration of the Company under the 1940 Act is therefore not required under the applicable securities laws, we acknowledge that a regulatory body or federal court may determine otherwise. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a determination by the SEC that SUI is a “security” requiring us to register as an investment company under the 1940 Act.

Read in the 10-K filed Feb 27, 2026 ↗

We have adapted our process for analyzing the U.S. federal securities law status of SUI and other cryptocurrencies over time, as guidance and case law have evolved. As part of our U.S. federal securities law analysis, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be deemed a security by the SEC for purposes of U.S. federal securities laws. Our position that we believe the SEC would not view SUI as a “security” is premised, among other reasons, on our conclusion SUI does not meet the elements of the Howey test. Among the reasons for our conclusion that SUI is not a security is that holders of SUI do not have a reasonable expectation of profits from our efforts or the efforts of the Sui Foundation or any other enterprise in respect of their holding of SUI. Also, SUI ownership does not convey the right to receive any interest, rewards, or other returns.

Read in the 10-K filed Feb 27, 2026 ↗

We acknowledge, however, that the SEC, a federal court or another relevant regulatory entity with jurisdiction or other enforceable authority over us could take a different view. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that SUI, or any other digital asset we might hold, is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines, and penalties if SUI was determined to be a security by a regulatory body or a court. Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations, financial condition, and prospects.

Read in the 10-K filed Feb 27, 2026 ↗

SUI and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive questions under the 1940 Act. There is a risk that assets or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes of the 1940 Act, which would increase the percentage of securities held by us for 1940 Act purposes.

Read in the 10-K filed Feb 27, 2026 ↗

We hold the stablecoin USDC, and on October 1, 2025, we launched a proprietary Sui-native synthetic dollar token, suiUSDe. We plan to make additional investments in stablecoins, including suiUSDe in the future. In July 2025, the United States enacted the GENIUS Act, which provides for the creation of the first comprehensive federal regime for the issuance, custody, and use of payment stablecoins. This law applies to key aspects of stablecoin programs, including state and federal licensing of issuers, reserve composition and management, redemption rights, disclosures, and ongoing regulatory supervision. While the GENIUS Act has been signed into law, it will not become effective until the earlier of January 18, 2027, or 120 days after the primary federal payment stablecoin regulators issue any final regulations implementing the GENIUS Act. The impact of these legal and regulatory changes will depend in part on how the GENIUS Act is implemented through rulemaking by U.S. regulators. Therefore, while a consistent federal framework could increase institutional and consumer confidence in stablecoins over time, the scope, timing, and substance of implementing the associated regulations and supervisory practices remain uncertain. There is no guarantee that USDC or suiUSDe will meet the criteria of the GENIUS Act, and compliance may require us to make changes to our holding of stablecoins or elements of the suiUSDe coin. These changes could increase our legal, compliance, operational, and technology costs or limit the types of stablecoins we may issue, hold or invest in and could have a material adverse effect on our business, results of operations, financial condition, and prospects.

Read in the 10-K filed Feb 27, 2026 ↗

The classification of any of our cryptocurrencies as a commodity could subject us to additional regulation by the CFTC, resulting in significant compliance costs or the cessation of certain activities.

Read in the 10-K filed Feb 27, 2026 ↗

Some digital cryptocurrency assets are classified as commodities under the Commodity Exchange Act and are subject to regulation by the CFTC. If our activities require CFTC registration, we may be required to comply with extensive regulatory obligations, which could result in significant costs and operational disruptions. Additionally, current and future legislative or regulatory developments, including new CFTC interpretations, could further impact how digital cryptocurrency assets and digital cryptocurrency asset derivatives are classified and traded. If SUI is regulated as a commodity, we may be required to register the Company as a commodity pool operator with the CFTC through the National Futures Association. Compliance with these additional regulatory requirements could result in substantial, non-recurring expenses, adversely affecting an investment in our Common Stock. If we choose not to comply with such regulations, we may be forced to cease our SUI treasury operations, or to cease holding USDC or issuing suiUSDe which could materially adversely impact our business, results of operations, financial condition, and shareholders.

Read in the 10-K filed Feb 27, 2026 ↗

SUI and other digital assets are subject to significant legal, commercial, regulatory, and technical uncertainty, and our SUI strategy subjects us to enhanced regulatory oversight;

Read in the 10-K filed Feb 27, 2026 ↗

increased regulatory focus on Layer-1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements; and

Read in the 10-K filed Feb 27, 2026 ↗

due to unfamiliarity and some negative publicity associated with digital asset platforms, confidence or interest in digital asset platforms, and the digital assets we expect to acquire, may decline.

Read in the 10-K filed Feb 27, 2026 ↗

Truist must comply with statutes and regulations relating to anti-money laundering, economic sanctions, embargo programs, anti-bribery, and anti-corruption, which increases the risk of non-compliance with applicable law and costs associated with the implementation and maintenance of complex compliance programs. The rapid evolution of technology, including the growth of digital assets, stablecoins, cryptocurrencies, tokenization, and blockchain and other distributed ledger technologies, introduce additional challenges to traditional client due diligence, transaction monitoring, and suspicious activity reporting required by applicable law. The BSA, as amended by the Patriot Act, and its implementing regulations require financial institutions, including IDIs such as Truist Bank, broker-dealers, and other financial institutions, to develop and implement BSA/AML compliance programs that detect and report financial crimes. The BSA and its implementing regulations also strengthen the ability of U.S. law enforcement agencies and the intelligence community to disrupt and prevent money laundering, the financing of terrorism, and related crimes. In addition, U.S. persons, including entities like Truist, must comply with sanctions programs administered by OFAC and the U.S. Department of State. These sanctions programs prohibit, among other things, financial transactions involving certain individuals, entities, countries, and territories that are the subject of U.S. economic sanctions and impose other restrictions on certain investments and dealings, including requirements to block assets.

Read in the 10-K filed Feb 24, 2026 ↗

All digital assets, including the TRX token, are highly volatile assets, and fluctuations in the price of the TRX token are likely to continue to affect our financial results and the market price of our listed securities. The trading price of the TRX token has experienced substantial volatility historically. In 2021, the trading price of the TRX token reached a high of approximately $0.18 in April, but it declined to a low of approximately $0.05 in November 2022, representing a drawdown of approximately 75%. More recently, during 2024, the TRX token appreciated significantly, rising from approximately $0.11 in January 2024 to a high of approximately $0.44 in December 2024, a gain of approximately 309%. After significant price correction, the trading price of the TRX token reached approximately $0.284271 by the end of 2025. As of March 18, 2026, the closing price of the TRX token was approximately $0.304394, which was an increase of approximately 7% from the price by the end of 2025. These figures are non-exhaustive examples that illustrate that the market price of TRX token has exhibited, and may continue to exhibit, rapid and substantial increases or decreases over relatively short periods, which could materially and adversely affect the value of our holdings directly and the trading price of our securities indirectly. The price figures and percentage change figures above are based on the historical data file downloaded from the CoinMarketCap TRON Historical Data page.

Read in the 10-K filed Mar 25, 2026 ↗

investment and trading activities, such as (i) trading activities of highly active retail and institutional users and investors; and (ii) actual or expected significant dispositions of TRX tokens by large holders, including the expected liquidation of digital assets associated with entities that have filed for bankruptcy protection and the transfer and sale of TRX tokens associated with significant hacks, seizures, or forfeitures; negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, TRON blockchain, TRX tokens or the broader digital assets industry, for example, (i) public perception that blockchains can be used as a platform to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023; (ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major participants in the TRON ecosystem, if any; and (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates; changes in consumer preferences and the perceived value or prospects of the TRX token; competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets; a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for TRX token purchase and sale transactions, such as the crash of the stablecoin Terra USD in 2022, to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of TRX tokens or adversely affect investor confidence in digital assets generally; developments relating to the TRON protocol, including (i) changes to the TRON protocol that impact its security, speed, scalability, usability, or value, such as changes to the cryptographic security protocol underpinning the TRON blockchain, changes to the maximum number of TRX tokens outstanding, changes to the mutability of transactions, changes relating to the size of blockchain blocks, and similar changes, (ii) failures to make upgrades to the TRON protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the TRON protocol that introduce software bugs, security risks or other elements that adversely affect TRX tokens; disruptions, failures, unavailability, or interruptions in service of trading venues for TRX tokens, such as, for example, the announcement by the digital asset exchange FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy protection and the SEC enforcement action brought against Binance Holdings Ltd., which initially sought to freeze all of its assets during the pendency of the enforcement action and has since resulted in Binance discontinuing all fiat deposits and withdrawals in the U.S.;

Read in the 10-K filed Mar 25, 2026 ↗

the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, trading venues, lending platforms, investment funds, or other digital asset industry participants, such as the filing for bankruptcy protection by digital asset trading venues FTX Trading and BlockFi and digital asset lending platforms Celsius Network and Voyager Digital Holdings in 2022, the ordered liquidation of the digital asset investment fund Three Arrows Capital in 2022, the announced liquidation of Silvergate Bank in 2023, the government-mandated closure and sale of Signature Bank in 2023, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by the Nevada Department of Business and Industry in 2023, and the exit of Binance from the U.S. market as part of its settlement with the Department of Justice and other federal regulatory agencies; regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of TRX tokens, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;

Read in the 10-K filed Mar 25, 2026 ↗

The TRX token and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty

Read in the 10-K filed Mar 25, 2026 ↗

The TRX token and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and 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 the TRX token or the ability of individuals or institutions (including the Company) to own or transfer TRX tokens.

Read in the 10-K filed Mar 25, 2026 ↗

President Trump signed an executive order instructing a working group comprised of representatives from key federal agencies to evaluate measures that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries; the European Union adopted Markets in Crypto Assets Regulation (“MiCA”), a comprehensive digital asset regulatory framework for the issuance and use of digital assets; in June 2023, the SEC filed complaints against Binance Holdings Ltd. and Coinbase, Inc., and their respective affiliated entities, relating to, among other claims, that each party was operating as an unregistered securities exchange, broker, dealer, and clearing agency; in November 2023, the SEC filed a complaint against Payward Inc. and Payward Ventures Inc., together known as Kraken, alleging, among other claims, that Kraken’s crypto trading platform was operating as an unregistered securities exchange, broker, dealer, and clearing agency; in June 2023, the United Kingdom adopted and implemented the Financial Services and Markets Act 2023 (“FSMA 2023”), which regulates market activities in “cryptoassets;”

Read in the 10-K filed Mar 25, 2026 ↗

in November 2023, Binance Holdings Ltd. and its then chief executive officer reached a settlement with the U.S. Department of Justice, CFTC, the U.S. Department of Treasury’s Office of Foreign Asset Control, and the Financial Crimes Enforcement Network to resolve a multi-year investigation by the agencies and a civil suit brought by the CFTC, pursuant to which Binance Holdings Ltd. agreed to, among other things, pay $4.3 billion in penalties across the four agencies and to discontinue its operations in the United States; and in China, the People’s Bank of China and the National Development and Reform Commission have outlawed cryptocurrency mining and declared all cryptocurrency transactions illegal within the country.

Read in the 10-K filed Mar 25, 2026 ↗

It is not possible to predict whether, or when, new laws will be enacted that change the legal framework governing digital assets or provide additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact the value of digital assets generally and TRX tokens specifically. The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of TRX tokens, as well as our ability to hold or transact in TRX tokens, and in turn adversely affect the market price of our listed securities.

Read in the 10-K filed Mar 25, 2026 ↗

The growth of the digital assets industry in general, and the use and acceptance of the TRX token in particular, may also impact the price of the TRX token and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of TRX tokens may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to TRX tokens, institutional demand for TRX tokens as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for TRX tokens as means of payment, and the availability and popularity of alternatives to the TRX token. Even if growth in TRX token adoption occurs in the near or medium-term, there is no assurance that TRX token usage will continue to grow over the long-term.

Read in the 10-K filed Mar 25, 2026 ↗

Because the TRX token has no physical existence beyond the record of transactions on the TRON blockchain, a variety of technical factors related to the TRON blockchain could also impact the price of the TRX token. For example, malicious attacks by hackers, hard “forks” of the TRX token blockchain into multiple blockchains, and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the TRON blockchain and negatively affect the price of the TRX token. The liquidity of the TRX token may also be reduced and damage to the public perception of the TRX token may occur, if financial institutions were to deny or limit banking services to businesses that hold TRX tokens, provide TRX token-related services or accept the TRX token as payment, which could also decrease the price of the TRX token. Actions by U.S. banking regulators, such as the issuance in February 2023 by Federal banking agencies of the “Interagency Liquidity Risk Statement,” which cautioned banks on contagion risks posed by providing services to digital assets customers, and similar actions, have in the past resulted in or contributed to reductions in access to banking services for cryptocurrency-related customers and service providers, or the willingness of traditional financial institution to participate in markets for digital assets. The liquidity of the TRX token may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for TRX tokens and other digital assets.

Read in the 10-K filed Mar 25, 2026 ↗

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 between Russia and Ukraine. While we have implemented 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 TRX tokens 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 TRX tokens from bad actors that have used TRX tokens to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in TRX tokens by us may be restricted or prohibited.

Read in the 10-K filed Mar 25, 2026 ↗

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. Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting TRX tokens, as well as enforcement actions involving or impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold and transact in TRX tokens.

Read in the 10-K filed Mar 25, 2026 ↗

TRX token trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many TRX token 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 TRX token trading venues, including prominent exchanges that handle a significant volume of TRX token trading and/or are subject to regulatory oversight, in the event one or more TRX token trading venues cease or pause for a prolonged period the trading of TRX token or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

Read in the 10-K filed Mar 25, 2026 ↗

The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of TRX tokens and adversely affect our business.

Read in the 10-K filed Mar 25, 2026 ↗

As a result of our TRX token strategy, our assets are concentrated in our TRX token holdings. Accordingly, the emergence or growth of digital assets other than the TRX token (such as Bitcoin and Ethereum) may have a material adverse effect on our financial condition.

Read in the 10-K filed Mar 25, 2026 ↗

Other alternative digital assets that compete with the TRX token in certain ways include “stablecoins,” which are designed to maintain a constant price because of, for instance, their issuers’ promise to hold high-quality liquid assets (such as U.S. dollar deposits and short-term U.S. treasury securities) equal to the total value of stablecoins in circulation. Stablecoins have grown rapidly as a medium of exchange and store of value, particularly on digital asset trading platforms. As of December 31, 2025, two of the eight largest digital assets by market capitalization were U.S. dollar-pegged stablecoins.

Read in the 10-K filed Mar 25, 2026 ↗

Additionally, the introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector issued cryptocurrencies, or significantly limit their utility. National governments around the world could introduce central bank digital currencies, which could in turn limit the size of the market opportunity for cryptocurrencies, including TRX tokens.

Read in the 10-K filed Mar 25, 2026 ↗

The TRX tokens are mainly traded on centralized and decentralized cryptocurrency exchange platforms. During times of market instability, we may not be able to sell our TRX tokens at favorable prices or at all. As a result, our TRX token holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, TRX tokens we hold and transact with our trade execution partners does 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.

Read in the 10-K filed Mar 25, 2026 ↗

Moreover, TRX tokens may be “staked” on various platforms, including centralized cryptocurrency exchanges, or directly on decentralized platforms. “Staking” is a crypto-related process that allows network participants to earn rewards by locking their tokens in wallets. The TRX tokens in the Treasury Wallet are currently “staked” on JustLend, a decentralized finance (DeFi) protocol, in exchange for Staked TRX (sTRX) tokens. sTRX token is a derivative token that represents the “staked” TRX tokens, which can automatically generate yield for the token holders. For the avoidance of doubt, the sTRX token does not generate discrete staking rewards. Instead, the economic benefit of staking is reflected through a floating conversion rate between TRX and sTRX, which increases over time based on accrued protocol rewards. While “staking” can generate yields and rewards, there are inherent risks such as (i) smart contract risk – any vulnerabilities of the smart contract may potentially lead to loss of funds, and the redemption of “staked” tokens which is governed by smart contract may be modified by the operator; (ii) interest rate fluctuations – rates can change rapidly based on market conditions, and therefore the amount of yields or rewards is not guaranteed; and (iii) liquidity risk – it may take days or even weeks to release TRX tokens from “staking”. Other than yields and rewards generated from “staking” of the TRX tokens, the TRX token itself does not pay interest or other returns and we can only generate cash from our TRX token holdings if we sell our TRX tokens or implement strategies to create income streams or otherwise generate cash by using our TRX token holdings. Even if we pursue any such strategies, we may be unable to create income streams or otherwise generate cash from our TRX token holdings, and any such strategies may subject us to additional risks.

Read in the 10-K filed Mar 25, 2026 ↗

The limited rights of legal recourse available to us, and our lack of insurance protection expose us and our stockholders to the risk of loss of our digital assets.

Read in the 10-K filed Mar 25, 2026 ↗

Our digital assets are not insured. If our digital assets are lost, stolen or destroyed under circumstances rendering a party liable to us, the responsible party may not have the financial resources sufficient to satisfy our claim. For example, as to a particular event of loss, the only source of recovery for us might be limited, to the extent identifiable, to other responsible third parties (which may include a thief or terrorist), some or all of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim or may be beyond the reach of available legal recourse. Furthermore, the TRX token is not subject to Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation protection, which is the protection afforded to depositors at banking institutions. Therefore, a loss may be suffered with respect to our digital assets for which no recourse is available, which could adversely affect our operations and, consequently, an investment in our securities.

Read in the 10-K filed Mar 25, 2026 ↗

Security breaches and cyberattacks are of particular concern with respect to our TRX tokens. Blockchain-based digital assets have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. A successful security breach or cyberattack could result in a partial or total loss of our TRX tokens. Such a loss could have a material adverse effect on our financial condition and results of operations.

Read in the 10-K filed Mar 25, 2026 ↗

As of March 18, 2026, the TRON blockchain and TRX tokens have not experienced any material security breaches or protocol-level cyberattacks that compromised the integrity of the network. TRON currently maintains a public bug bounty program on HackerOne and has undergone an external security audit of its Java-Tron node software by ChainSecurity. However, the TRON blockchain and TRX token, similar to other digital assets and blockchain technologies, may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For example, 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:

Read in the 10-K filed Mar 25, 2026 ↗

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 TRON blockchain ecosystem or in the use of the TRON blockchain to conduct financial transactions, which could negatively impact us.

Read in the 10-K filed Mar 25, 2026 ↗

Attacks upon systems across a variety of industries are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, unauthorized parties have attempted, and we expect that they will continue to attempt, to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. In the past, hackers have successfully employed a social engineering attack against one of our service providers and misappropriated our digital assets, although, to date, such events have not been material to our financial condition or operating results. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate preventative measures. Further, there has been an increase in such activities due to the increase in work-from-home arrangements since the onset of the COVID-19 pandemic. 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 digital asset industry, including third-party services on which we rely, could materially and adversely affect our business.

Read in the 10-K filed Mar 25, 2026 ↗

We have also adapted our process for analyzing the U.S. federal securities law status of the TRX token and other cryptocurrencies over time, as guidance and case law have evolved. As part of our U.S. federal securities law analytical process, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. Our position that TRX token, whether on its own or when offered and sold as part of or subject to an investment contract, is not a “security” is premised, among other reasons, on our conclusion that the TRX token does not meet the elements of the Howey test. Among the reasons for our conclusion that the TRX token is not a security is that holders of TRX tokens do not have a reasonable expectation of profits from our efforts in respect of their holding of TRX tokens. Also, TRX token ownership does not convey the right to receive any interest, rewards, or other returns.

Read in the 10-K filed Mar 25, 2026 ↗

We acknowledge, however, that the SEC, a federal court or another relevant entity could take a different view. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that the TRX token, or any other digital asset we might hold, is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines, and penalties if the TRX token was determined to be a security by a regulatory body or a court. Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations, financial condition, and prospects.

Read in the 10-K filed Mar 25, 2026 ↗

TRX tokens and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive questions under the Investment Company Act. There is a risk that assets or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes of the Investment Company Act, which would increase the percentage of securities held by us for Investment Company Act purposes. The SEC has requested information from a number of participants in the digital assets’ ecosystem, regarding the potential application of the Investment Company Act to their businesses. For example, in an action unrelated to the Company, in February 2022, the SEC issued a cease-and-desist order under the Investment Company Act to BlockFi Lending LLC, in which the SEC alleged that BlockFi was operating as an unregistered investment company because it issued securities and also held more than 40% of its total assets, excluding cash, in investment securities, including the loans of digital assets made by BlockFi to institutional borrowers.

Read in the 10-K filed Mar 25, 2026 ↗

Further, the broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of TRX tokens. A series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry have highlighted the counterparty risks applicable to owning and transacting in digital assets. Although these bankruptcies, closures, liquidations and other events have not resulted in any loss or misappropriation of our TRX tokens, nor have such events adversely impacted our access to our TRX tokens, they have, in the short-term, likely negatively impacted the adoption rate and use of the TRX tokens. Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price, and use of the TRX token, limit the availability to us of financing collateralized by TRX tokens, or create or expose additional counterparty risks. Changes in the accounting treatment of our TRX token holdings could have significant accounting impacts, including increasing the volatility of our results.

Read in the 10-K filed Mar 25, 2026 ↗

The broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of, and use cases for, digital assets, market perception of digital assets, and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing, and there may be additional risks in the future that are not possible to predict.

Read in the 10-K filed Mar 25, 2026 ↗

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;

Read in the 10-K filed Sep 17, 2026 ↗

Increased regulatory focus on Layer-1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements.

Read in the 10-K filed Sep 17, 2026 ↗

The Solana Network is more centralized than other blockchain protocols such as Bitcoin and Ethereum. The Solana Foundation and a relatively small group of core developers play a significant role in the governance, maintenance, and technical direction of the Solana protocol. If one or more key individuals that is responsible for the core development or leadership were to depart, become incapacitated or otherwise decide not to participate, the health of the Solana network will be significantly affected and would result in a material adverse impact on the value of SOL. Further, if the Solana Foundation were to become subject to a reputational event, it could lead to reduced developer engagement and adversely affect the functionality and value of the Solana Network.

Read in the 10-K filed Sep 17, 2026 ↗

We and our competitors are developing or participating in alternative payment systems, including mobile payments, P2P services, RTP initiatives, ACH/direct debit solutions and cryptocurrency-based platforms, including stablecoin payments, that could reduce our role or disintermediate us from transaction processing. The enactment of the U.S. GENIUS Act in July 2025 and the EU's crypto-asset framework, along with emerging regulatory frameworks in other countries, provide increasing regulatory certainty for stablecoins, which could disrupt existing payment networks, particularly in cross-border, B2B, and currency-unstable markets. Industry participants may merge, form joint ventures, enter bilateral agreements, or create new competing services, migrate or steer account holders or clients to other networks, or bypass our network entirely. New or revised payment standards imposed by countries, regions or standard-setting organizations may impose additional costs or negatively impact the competitiveness of our products. We may need to adjust rules or pricing, or agree to terms that are less protective of our proprietary technology to remain competitive. Failure to anticipate or respond to the evolving competitive landscape could harm our business, financial results and prospects for growth.

Read in the 10-K filed Nov 5, 2026 ↗

Instability, fraud, or failures within the broader cryptocurrency ecosystem may adversely affect the price of bitcoin and our results of operations.

Read in the 10-K filed Feb 27, 2026 ↗

Digital asset exchanges and cryptocurrency platforms are relatively new and, in many cases, lightly regulated. Certain exchanges have filed for bankruptcy or become subject to investigation by governmental agencies for fraud or other misconduct, resulting in increased volatility and loss of confidence in digital asset markets. Bitcoin is subject to price volatility resulting from financial instability, poor business practices, fraudulent activities of participants in the broader cryptocurrency market and heightened regulatory scrutiny.

Read in the 10-K filed Feb 27, 2026 ↗

The bitcoin blockchain is subject to modification based on a consensus of the users on its network. When a significant minority of users on the network agree to a modification that is not compatible with the prior network protocol, a “fork” of the network results, with one prong running the pre-modified protocol and the other running the modified

Read in the 10-K filed Feb 27, 2026 ↗