BITMINE IMMERSION TECHNOLOGIES, INC.

Ownership of our securities involves a high degree of risk. You should carefully consider the risks described below, together with all other information contained in or incorporated by reference into this Annual Report on Form 10-K, including our audited financial statements and the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following discussion highlights material risks that could adversely affect our business, financial condition, results of operations, cash flows, liquidity, prospects and the trading price of our common stock and our preferred stock. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of the risks actually occur, our business could be materially harmed and the market price of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Digital Asset Prices, Network Dynamics and Treasury Holdings

Volatility in the prices of ETH and BTC may materially and adversely affect our business, financial condition and results of operations.

Our revenues, gross margins, liquidity and ability to service obligations depend significantly on prevailing ETH prices and, less so, BTC prices. Substantially all of our staking revenue is received in ETH rather than U.S. dollars. As a result, the U.S. dollar value of our staking revenue fluctuates with ETH prices, separate from and in addition to the effect of ETH price changes on the value of our ETH treasury holdings, and a decline in ETH prices would reduce our reported revenue even if the amount of ETH we earn from staking remains unchanged. Prolonged or sharp price declines, or heightened volatility, may impede ETH ecosystem growth, reduce the carrying value and liquidity of digital assets held, and decrease investor demand for our securities, including our 9.50% Redeemable Preferred Stock. During the fiscal year ended August 31, 2026, we recognized unrealized losses on digital assets of approximately $6.2 billion, driven primarily by declines in the fair value of ETH. Because we account for digital assets at fair value under ASC 350-60, price declines are immediately reflected in our results of operations, which may result in significant reported net losses even when we have not sold the assets.

The future development and growth of digital assets are subject to a variety of factors that are difficult to predict and evaluate. If digital assets do not grow as we expect, our business, operating results and financial condition could be adversely affected.

Digital assets built on blockchain technology were only introduced in 2008 and remain in the early stages of development. In addition, different digital assets are designed for different purposes. Ethereum, for instance, was designed to serve as a smart contract and decentralized application platform, while Bitcoin was designed to serve as a peer-to-peer electronic cash system. Many other blockchain networks, ranging from cloud computing to tokenized securities networks, have only recently been established. The further growth and development of any digital assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer and usage of digital assets and related assets represent a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including:

•many digital assets and networks have limited operating histories, have not been validated in production, and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective digital assets and underlying blockchain networks, any of which could adversely affect their respective digital assets;

•many blockchain networks are in the process of implementing software upgrades and other changes to their protocols, which could introduce bugs, security risks, or adversely affect the respective blockchain networks;

•several large networks, including Ethereum and Bitcoin, are developing new features to address fundamental speed, scalability, and energy usage issues. If these issues are not successfully addressed, or if these networks do not achieve widespread adoption, it could adversely affect the underlying digital assets;

•security issues, bugs, and software errors have been identified with many digital assets and their underlying blockchain networks, some of which have been exploited by malicious actors. There are also inherent security weaknesses in some digital assets, such as when creators of certain blockchain networks use procedures that could allow hackers to counterfeit tokens. Any weaknesses identified with a digital asset could adversely affect its price, security, liquidity, and adoption rate. If one or more malicious actors obtain a majority of the compute or staking power on a digital asset network, as has happened in the past, it may be able to engage in illicit activity, which could cause financial losses to holders, damage the network’s reputation and security, and adversely affect its value;

•advances in quantum computing could render the cryptography securing Ethereum, Bitcoin and other blockchain networks vulnerable to attack. If these networks do not timely adopt post-quantum cryptographic standards, malicious actors could derive private keys, steal digital assets or compromise validator operations, and even the perception of such a threat could adversely affect the price, liquidity and adoption of digital assets, including the ETH we hold and stake;

•blockchain networks may have consolidated points of failure (such as concentrated ownership or an “admin key”), allowing a small group of holders to have significant unilateral control and influence over key decisions related to their blockchain networks, such as governance decisions and protocol changes, as well as the market price of such digital assets;

•if rewards and transaction fees for miners or validators on any particular digital asset network are not sufficiently high to attract and retain miners or validators, a blockchain network’s security and speed may be adversely affected, increasing the likelihood of a malicious attack;

•the governance of many decentralized blockchain networks is by voluntary consensus and open competition, and many developers are not directly compensated for their contributions. As a result, there may be a lack of consensus or clarity on the governance of any particular digital asset network, a lack of incentives for developers to maintain or develop the network, and other unforeseen issues, any of which could result in unexpected or undesirable errors, bugs, or changes, or stymie such network’s utility and ability to respond to challenges and grow; and

•many blockchain networks are in the early stages of developing partnerships and collaborations, any or all of which may not succeed and adversely affect the usability and adoption of the respective digital assets.

Various other technical issues have also been uncovered from time to time that resulted in disabled functionalities, exposure of certain users’ personal information, theft of users’ assets, and other negative consequences, and which required resolution with the attention and efforts of their global miner, user, and development communities. If any such risks or other risks materialize, and in particular if they are not resolved, the development and growth of digital assets may be significantly affected and, as a result, our business, operating results, and financial condition could be adversely affected.

Ethereum-specific market, technology and regulatory developments may adversely affect the value and liquidity of our ETH holdings and our Treasury Strategy.

The Ethereum network is subject to rapidly evolving technology, competitive dynamics (including alternative Layer 1 and Layer 2 networks), and changing regulatory and market-structure frameworks. Adverse developments—including protocol upgrades with unintended consequences, forks or chain instability, validator concentration, consensus failures, smart contract vulnerabilities, L2 settlement failures, bridge exploits, or regulatory restrictions—could reduce the value or liquidity of ETH and impair our treasury strategy. Our revenue is now substantially concentrated in ETH staking and validation activities conducted through our MAVAN platform. For the fiscal year ended August 31, 2026, staking and validation revenue represented approximately 97% of our total revenue. A material adverse development affecting the Ethereum network, staking economics, or our MAVAN infrastructure could disproportionately affect our revenue and results of operations.

Our shift towards an ETH-focused strategy requires substantial changes in our day-to-day operations and exposes us to new operational risks.

Our shift towards an ETH-focused strategy, including staking, restaking, liquid staking, and other decentralized finance activities, exposes us to new operational risks.

Staking ETH involves holding a certain amount of ETH in a smart contract and running software known as a “validator node.” Validators are randomly selected to propose blocks of transactions to be added to the Ethereum blockchain. Validators earn newly issued ETH as consensus-layer rewards for performing duties such as attesting to and successfully proposing blocks. A validator that successfully proposes a block may also receive execution-layer rewards from transaction priority fees. The Ethereum network also imposes penalties on validators that experience downtime or propose incorrect blocks; these penalties, known as “slashing,” reduce the ETH staked to the validator node. Errors in key management, inadequate slashing protection, or failure to maintain required uptime could reduce rewards or result in the loss of staked ETH.

We may choose to operate our own validator services or delegate our ETH to third-party validation service providers. If we use a third-party validation service, we would share staking rewards with that provider, although it may have more sophisticated technology that could generate greater rewards. In either case, staking increases the risk of loss of ETH, including through slashing penalties, hacking of staking smart contracts, validator failures, and operational or cybersecurity incidents.

The ETH ecosystem rapidly evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup, including software, hardware, key-management and compliance procedures. These changes may require unanticipated costs and cause temporary service disruptions. Technical failures or operational errors could affect our ability to obtain ETH rewards or gas fees and cause us to fail to meet our financial projections.

Staked ETH is subject to lock-up and unbonding periods during which it cannot be withdrawn or sold. We may seek to mitigate this risk through liquid staking arrangements, but liquid staking tokens may not track ETH and could diverge in value, particularly if validators are slashed or the relevant smart contract is compromised. Any of these operational risks could materially and adversely affect our ability to execute our ETH strategy, prevent us from realizing positive returns, and severely harm our financial condition.

Our digital asset treasury business model has multiple layers of corporate finance risks.

Our ETH Treasury Strategy has multiple layers of risk based on corporate finance principles and blockchain mechanics, including but not limited to the following:

•Share Repurchase Program Risk: We have authorized up to $4.0 billion in share repurchases. Repurchases reduce our cash reserves and may limit our ability to fund operations, service preferred stock dividends, or respond to market opportunities.

•Potential Premium Collapse: Our digital asset treasury relies on equity premiums to raise capital accretively. If share prices fall below NAV, treasury accumulation on our balance sheet may slow down or halt. Decreasing premiums paid for our shares may signal a lack of investor enthusiasm for our ETH Treasury Strategy.

•Liquidity and Macro Sensitivity: Digital asset treasury company equities are typically high-beta assets. For example, a 20% ETH correction can result in 50% equity drawdowns due to leverage and collapsing premiums.

•Dilution Concerns: Repeated capital raises through ATMs, PIPEs, and RDOs may desensitize investors. Without yield growth or NAV accretion, new issuances risk being seen as opportunistic liquidity events rather than long-term expansion. During the fiscal year ended August 31, 2026, we raised approximately $13.6 billion, gross, through ATM sales and other equity offerings, resulting in significant dilution to existing stockholders.

Together, these risks form the structural challenges of our ETH Treasury Strategy. Its success depends on maintaining perpetual premium expansion in a market that is inherently cyclical.

Our ETH Treasury Strategy and any decision to hold other digital or alternative assets may increase our exposure to market volatility and potential uninsured losses.

Market conditions and operational needs may necessitate longer holding periods, increasing exposure to price swings. In connection with our ETH Treasury Strategy, or other digital assets or alternative investments we own or may purchase in the future, we could be exposed to additional volatility, regulatory, and market structure risks specific to those assets. We are currently exposed to potential uninsured losses to the extent digital asset balances exceed the custodian’s applicable insurance coverage.

Operational, Cybersecurity and Custody Risks

Our staking and validator operations conducted through MAVAN are subject to significant risks, including slashing, lock-up periods, smart contract vulnerabilities, liquidity constraints, counterparty exposure, and operational failures, any of which could result in a partial or total loss of staked ETH or a material reduction in staking revenue.

Staking requires operational reliability and adherence to protocol rules. Validators that act maliciously or suffer extended downtime can be “slashed,” resulting in a partial loss of staked principal. Slashing may be triggered by validator misconduct as well as by operational errors, such as running duplicate validator keys, software bugs or misconfigurations, or failures in slashing-protection systems, whether at MAVAN or at a third-party staking provider. Because we operate a significant number of validators using common infrastructure, a single operational failure could cause correlated slashing across many of our validators, resulting in substantial losses of staked ETH. In addition, slashing of validators that MAVAN operates for third-party customers could result in claims, indemnity obligations, and loss of customers. Staking may also involve unbonding or lock-up periods that reduce liquidity and flexibility. We generate substantial revenue from native ETH staking, including through MAVAN, and any failure in our validator operations or at a third-party staking provider could result in losses, reputational harm, and reduced revenue.

Through our MAVAN platform, we operate validator nodes and provide staking infrastructure services. The performance, security, and reliability of MAVAN are critical to our staking operations and revenue. A failure or disruption at MAVAN, including a software or hardware failure, loss of connectivity, cybersecurity incident, power outage, validator downtime, or failure to implement protocol upgrades, could result in loss of staked assets, slashing penalties, reduced rewards, and loss of institutional staking clients.

Liquid staking or restaking mechanisms may involve additional smart contract risk, rehypothecation or correlated exposures, and market-liquidity considerations for derivative tokens. Smart contract vulnerabilities, validator failures, or adverse changes to the Ethereum protocol could reduce or eliminate staking rewards or result in a partial or total loss of staked ETH.

The Ethereum protocol may be modified in ways that reduce or eliminate staking rewards, and regulatory developments in the United States and abroad may affect our ability to stake ETH or the economic terms on which staking is conducted. Any such changes could materially reduce our staking revenues and the value of our ETH holdings. There can be no assurance that staking yields will remain at levels sufficient to support our current business model or dividend policy, and investors should not place undue reliance on historical staking yields as indicative of future performance.

The Ethereum network is subject to rapidly evolving technology, competitive dynamics, and changing regulatory and market-structure frameworks.

The Ethereum network is subject to ongoing development, including protocol upgrades, scaling solutions, rollups, Layer 2 networks and bridges, any of which could result in disruptions, forks, security incidents or unanticipated changes to staking economics. If the Ethereum network is disrupted or encounters any unanticipated difficulties, processing of transactions may be disrupted, which could prevent us from depositing or withdrawing ETH or otherwise effecting ETH transactions. Adverse developments—including protocol upgrades with unintended consequences, forks or chain instability, validator concentration, consensus failures, smart contract vulnerabilities, Layer 2 settlement failures, bridge exploits, or regulatory restrictions—could reduce the value or liquidity of ETH and impair our treasury strategy.

Many Layer 2 networks rely on fraud proofs, validity proofs, sequencing, bridging contracts and centralized or semi-centralized governance during early phases. Security or operational failures at a Layer 2 or bridge could lead to loss of funds, delays in withdrawals, or market dislocations affecting assets bridged to or from Ethereum. Our operations could be adversely affected by such disruptions, particularly if we hold or accept assets that are bridged or rely on Layer 2 settlement pathways.

Although we do not currently intend to mine ETH, digital asset validating operations can consume significant amounts of electricity, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for validating operations. Additionally, validators may be forced to cease operations during an electricity shortage or power outage.

Advances in quantum computing or artificial intelligence could compromise the cryptography securing the Ethereum network, our ETH holdings and our validator operations, which could materially adversely affect our business, financial condition, results of operations and the market price of our securities.

The Ethereum network relies on cryptographic algorithms to secure transactions, protect digital assets and validate network activity. Advances in quantum computing or artificial intelligence (AI) could eventually make certain of these algorithms vulnerable to attack. The future point at which this is projected to occur is sometimes called "Q-Day." No quantum computer is currently known to be able to compromise Ethereum's cryptographic systems, but such capabilities could emerge sooner than anticipated and with little warning. Advances in artificial intelligence could speed up progress in quantum computing and the development of methods to exploit cryptographic weaknesses. AI could also be combined with quantum capabilities to identify vulnerable targets, automate attacks and exploit vulnerabilities faster than the Ethereum ecosystem, our custodians or our service providers can respond. AI could also lead to new methods of breaking Ethereum's cryptography using conventional computers, without the need for a quantum computer. Such methods could emerge before Q-Day and with little or no warning.

Ethereum currently relies on elliptic-curve cryptography to authenticate transactions and secure validator signatures. Sufficiently advanced quantum computers could potentially derive private keys from exposed public keys, allowing unauthorized parties to misappropriate ETH. Such losses would likely be irreversible. The custodial and multisignature arrangements used to protect an owner’s ability to access its ETH generally rely on the same types of cryptography. Diversifying across custodians therefore may not mitigate this risk, and insurance providers may not cover all or any losses resulting from such an event. Quantum-related vulnerabilities could also disrupt transaction processing, impair network security, interrupt our staking operations or prevent us from accessing or withdrawing staked ETH. Our signing infrastructure is designed not to be directly accessible from the internet, and the compromise of one validator key would not by itself expose our other keys. However, if multiple validator keys were compromised, or our signing infrastructure were breached, we could suffer slashing or losses across many validators at once.. A compromise affecting validators we operate for third parties could also lead to customer claims and reputational harm.

The Ethereum Foundation and the broader Ethereum community are developing new cryptographic protections to help prevent attackers using quantum computers from forging transaction approvals or posing as legitimate validators. Supporting technologies are targeted for production readiness in 2027, with continuing upgrades anticipated thereafter. Through MAVAN, we are contributing to these efforts through the development of Lantern and participating in post-quantum interoperability testing. However, there can be no assurance that effective protections will be adopted in time. Implementing them could require significant protocol changes, coordination among a decentralized community of participants, and migration of wallets and validator keys. Any of these steps could introduce new vulnerabilities, disruptions or forks. Even if such technologies are adopted, we and our custodians and service providers may not implement the necessary changes in a timely or effective manner, and doing so could involve significant costs.

Actual or perceived quantum-related vulnerabilities, whether or not exploited, could undermine confidence in Ethereum and cause substantial declines in the value of ETH. Because we measure our digital assets at fair value, any such decline would adversely impact our results of operations. As a substantial majority of our revenue comes from Ethereum staking, any disruption to staking could also materially reduce our staking revenue and liquidity, which could have a material adverse effect on our results of operations and ability to raise capital, and materially adversely affect the market price of our securities.

In connection with our focus on ETH, we expect to interact with various smart contracts deployed on the ETH network, which may expose us to risks and technical vulnerabilities.

In connection with our ETH strategy, including staking, restaking, and other decentralized finance activities, we expect to interact with various smart contracts deployed on the ETH network in order to optimize our strategy. Smart contracts are self-executing code that operate without human intervention once deployed. Decentralized protocols and token standards underpin many Ethereum-based activities. Exploits or failures, whether in widely used standards, core protocol implementations, bridges, or oracles, can cause material losses or network instability.

Smart contracts and decentralized applications may contain bugs, security vulnerabilities, poorly designed permission structures, or administrative keys that could be misused or compromised, potentially allowing a bad actor to issue assets, alter contract logic, or otherwise compromise the smart contract or decentralized application. Like all software code, smart contracts are exposed to coding flaws and security vulnerabilities that can lead to the loss of assets held on or transacted through the contract or decentralized application.

DeFi protocols may be governed by token holders or other participants whose incentives may not align with ours. Governance attacks, manipulation of voting or pricing mechanisms, oracle failures, and flash-loan attacks could be used to exploit a protocol or cause losses, including by temporarily manipulating asset prices or collateral values. Exploits stemming from admin key misuse, admin key compromise, or protocol flaws have occurred in the past and may occur in the future.

Any vulnerability in a smart contract we interact with could result in the loss or theft of ETH or other digital assets, an inability to access funds, or an interruption of our operations. Even if we are not directly exposed to a compromised protocol, contagion effects can depress market prices, reduce liquidity, and disrupt counterparties or service providers on which we rely. There is no assurance that the smart contracts we integrate with or rely upon will function as intended or remain secure, and exploitation could have a material adverse effect on our business and financial condition.

MAVAN and Institutional Staking Operations Risks

Our recent strategic transactions, including the acquisition of Pier Two and the launch of MAVAN, may not be successfully integrated or generate the anticipated benefits, and our projected staking revenue figures are based on assumptions that may prove incorrect.

On March 24, 2026, we acquired Pier Two Holdings Pty Ltd and launched MAVAN to support our ETH Treasury Strategy. Integrating MAVAN’s validator operations, personnel, technology, systems, controls, and processes may divert management time and resources and result in unexpected costs, delays, failures to retain key personnel, operational deficiencies, or failure to achieve the anticipated benefits of the transactions.

Our projected staking revenue figures are based on assumptions regarding the amount of ETH staked, staking yields, validator uptime, network rewards, fees, customer adoption, pricing, operating costs, and the timing and success of MAVAN’s development. These assumptions may prove incorrect, and actual staking revenue, margins, cash flow, and financial results may differ materially from our projections.

Our revenue is highly concentrated in ETH staking and validation operations conducted through MAVAN, and any disruption to those operations, decline in staking yields, decline in ETH prices, or adverse protocol change would have a disproportionate impact on our results of operations and financial condition.

For the fiscal year ended August 31, 2026, revenue from staking and validation represented approximately 97% of our total revenue. As a result, a material disruption to MAVAN or related validator operations, a decline in staking yields, validator downtime, loss of staking clients, or an adverse change to the Ethereum protocol could disproportionately reduce our revenue, liquidity, and results of operations. In addition, because our staking rewards are received in ETH, a decline in ETH prices would reduce the U.S. dollar value of our staking revenue, even if the amount of ETH we earn remains unchanged.

Staking yields are not fixed and may fluctuate with the total amount of ETH staked, protocol upgrades, network transaction volume, priority fees, validator participation, ETH prices, and broader market conditions. Future protocol changes or regulatory developments could further reduce yields or restrict our ability to conduct staking and validation activities.

Regulatory uncertainty regarding the classification and treatment of staking activities and staking rewards in the United States and abroad may subject us to additional compliance obligations, restrict our staking operations, or require changes to MAVAN’s business model.

Regulators in the United States and other jurisdictions may determine that staking, validator operations, staking-as-a-service, or staking rewards constitute securities, commodities, money transmission, investment advisory, or other regulated activities. Such determinations could require registration, licensing, reporting, custody, capital, consumer-protection, tax, sanctions, or anti-money-laundering measures; increase compliance costs; restrict or suspend our staking operations; or require us to modify or discontinue aspects of MAVAN.

These developments could also affect the legal or tax treatment of staking rewards, the economics of validator operations, and the services we can offer to clients. We may be required to restructure MAVAN’s business model, limit the assets or customers that it services, or incur substantial costs to comply with new requirements, and we cannot predict whether any such changes would permit MAVAN to operate at its current scale or profitability.

We rely on infrastructure providers and key personnel to support MAVAN’s validator operations.

MAVAN depends on third parties for infrastructure, connectivity, hosting, software, security, monitoring, and other services, and depends on personnel with specialized technical and operational knowledge. Any failure, delay, service interruption, cyber incident, dispute, insolvency, termination, or deterioration in performance could impair validator uptime, reduce rewards, increase costs, or require us to transition services on short notice.

Our ability to operate MAVAN also depends on recruiting, training, and retaining qualified engineers, validators, cybersecurity professionals, and other personnel. Competition for this talent is intense, and the loss of key personnel or inability to maintain adequate staffing could delay upgrades, weaken controls, increase operational errors, and adversely affect our ability to provide reliable staking and validation services.

MAVAN’s planned expansion from an internally-focused staking platform to a commercial staking-services provider introduces new customer acquisition, competitive, service-level, and reputational risks.

A commercial staking-services business requires us to acquire and retain customers, compete with established providers, price services appropriately, comply with customer-specific requirements, and satisfy service-level and reporting commitments. We may incur significant sales, onboarding, support, compliance, insurance, and technology costs before generating sufficient revenue, and there is no assurance that we will attract customers or operate the commercial platform at the scale or profitability we anticipate.

Service outages, slashing events, security incidents, failures to meet service levels, disputes over rewards or fees, or the loss or impairment of customer assets could result in claims, indemnity obligations, regulatory scrutiny, customer attrition, and reputational harm. These risks may be amplified as MAVAN serves third-party customers rather than only our own treasury.

Market structure and liquidity for ETH could deteriorate, impacting our ability to transact or to accurately value our holdings.

We rely on a limited number of venues for price discovery and liquidity. Market events—including exchange or market-maker disruptions, de-platforming of digital asset participants by banks or service providers, stress in stablecoin markets, or regulatory actions that affect trading venues—could reduce liquidity and increase volatility. A lack of reliable liquidity may impair valuation, hedging, or the ability to rebalance our treasury.

ETH price declines or prolonged underperformance versus other digital assets could adversely affect our financial position and capital access.

Our strategy is focused on ETH as our primary treasury asset. Sustained price declines in ETH or underperformance relative to other assets could reduce our revenue, because our staking rewards are received in ETH, reduce the carrying value of our digital assets, increase the frequency or magnitude of impairment charges under applicable accounting policies, and diminish our ability to raise capital or maintain compliance with exchange listing standards.

Restaking and correlated risk exposures may amplify losses during stress events.

If we engage in restaking or similar activities that create stacked security obligations or re-use of staked collateral across protocols, we may face correlated losses across multiple positions in a single adverse event. Losses at one protocol could affect the security or liquidity of positions at another, and recovery pathways may be uncertain or prolonged.

Concentration and governance risks in the Ethereum ecosystem could create systemic vulnerabilities.

Concentration of validators among a small number of providers, reliance on a limited set of client implementations, or governance capture by large stakeholders could increase systemic risk. A critical bug in a dominant client, or adverse decisions by influential governance participants, could affect network stability, validator incentives, or ETH economics.

Our treasury strategy and any decision to hold digital assets may increase our exposure to market volatility and potential uninsured losses.

If we hold ETH or other digital assets under our treasury strategy, we would be exposed to additional volatility, regulatory, and market structure risks specific to those assets. We are currently exposed to potential uninsured losses to the extent digital asset balances exceed the custodian’s applicable insurance coverage.

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

We hold our ETH with regulated custodians that have duties to safeguard our private keys, and use multisignature keys to prevent unauthorized access in accordance with our treasury operations. Our custodial services contracts do not restrict our ability to reallocate our ETH among our custodians, and our ETH holdings may be concentrated with a single custodian from time to time. We continually seek to engage additional custodians to achieve greater diversification, but multiple custodians may utilize similar wallet infrastructure, cloud service providers or software systems, which could increase systemic technology risk.

If the availability of custodians that can safely custody our ETH decreases, including because of regulatory developments or enforcement actions, we may need to enter into less favorable agreements or take other measures to custody our ETH. Our ability to diversify custodial services could be materially adversely affected. Although we conduct due diligence on custodians and smart contract platforms, that diligence may not uncover operational deficiencies, hidden vulnerabilities, or legal noncompliance.

Our use of custodians exposes us to the risk that ETH held on our behalf could be subject to insolvency proceedings and that we could be treated as a general unsecured creditor, inhibiting our ability to exercise ownership rights. Applicable insolvency law is not fully developed with respect to digital assets held in custodial accounts, and commingling or contested ownership claims could materially delay access to our ETH. Recent high-profile failures and hacks of digital asset service providers, including the February 2025 Bybit hack, illustrate the risk of unauthorized access, theft, operational failure, and contested claims. Any loss associated with such insolvency proceedings may not be covered by insurance.

Digital assets are generally controllable only by the possessor of the unique private key relating to the wallet in which they are held. If a private key is lost, destroyed, compromised, or otherwise unavailable and no backup is accessible, we will be unable to access the related digital assets. Digital assets and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, employee or service-provider misconduct or error, and other malicious activity. Any such loss or compromise could result in significant losses, customer claims, regulatory scrutiny, reputational harm, and adverse effects on our business, operating results, and financial condition.

Our custody arrangements and any smart contract platforms we use may expose us to additional technical and legal risks. A smart contract vulnerability, coding error, exploit, or poorly designed permission structure could result in loss or theft of ETH or other digital assets, an inability to access funds, or an interruption of our operations, and the loss may be irreversible. There is no assurance that any custodian, wallet infrastructure, or smart contract platform will function as intended or remain secure.

Insurance coverage may be limited by policy amounts, exclusions, deductibles, insurer solvency, and the circumstances of a loss, and may not cover losses arising from insolvency, commingling, private-key compromise, smart contract exploits, or protocol failures. Our assets may be insufficient to cover amounts exceeding our insurance coverage or any custodian’s applicable coverage, and we may be exposed to substantial uninsured losses. Digital assets held with custodians and trade execution partners do not enjoy the same protections as cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Regulatory, Legal and Policy Risks

We are subject to an extensive, highly evolving and uncertain regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results and financial condition.

Our business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance in the markets in which we operate, including those governing financial services and banking, trust companies, securities, derivative transactions and markets, broker-dealers and alternative trading systems (“ATS”), commodities, credit, digital asset custody, exchange, and transfer, cross-border and domestic money and digital asset transmission, commercial lending, usury, foreign currency exchange, privacy, data governance, data protection, cybersecurity, fraud detection, payment services, consumer protection, antitrust and competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing. Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, digital assets, generative artificial intelligence (“AI”) and related technologies. As a result, some applicable laws and regulations do not contemplate or address unique issues associated with blockchain and digital assets industry, are subject to significant uncertainty, and vary widely across U.S. federal, state, and local and international jurisdictions. These legal and regulatory regimes, including the laws, rules and regulations thereunder, evolve frequently and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the blockchain and digital assets industry requires us to exercise our judgment as to whether certain laws, rules and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on or temporary or permanent suspensions of our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition. In particular, the regulatory treatment of ETH staking, validator operations, and staking-as-a-service activities remains uncertain. The SEC, CFTC, and state regulators have not provided definitive guidance on whether staking activities constitute securities, commodities, or other regulated activities. Adverse regulatory determinations or enforcement actions could require us to register, restructure, or discontinue our staking operations, which would materially affect our business and results.

Governmental and regulatory bodies, including in the United States, may introduce new policies, laws and regulations relating to digital assets and the blockchain and digital assets industry generally, and digital asset platforms in particular. Other companies’ failures of risk management and other control functions could contribute to stricter oversight of digital asset platforms and the blockchain and digital assets industry. Furthermore, new interpretations of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development of the blockchain and digital assets industry as a whole and our legal and regulatory status in particular by changing how we operate our business, how our products and services are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements, or imposing a total ban on certain digital asset transactions, as has occurred in certain jurisdictions in the past.

Moreover, we may in the future use or offer products and services whose functionality or value depends in part on our management of token transaction smart contracts, liquid staking, asset tracking, or other applications that provide novel forms of customer engagement and interaction delivered via blockchain protocols. We may also offer products and services whose functionality or value depends on our ability to develop, integrate, or otherwise interact with such applications within the bounds of our legal and compliance obligations. The legal and regulatory landscape for such products, including the law governing the rights and obligations between and among smart contract developers and users and the extent to which such relationships entail regulated activity is uncertain and rapidly evolving. Our interaction with those applications, and the interaction of other blockchain users with any smart contracts or assets we may generate or control, could present legal, operational, reputational, and regulatory risks for our business.

Changes in laws and regulations applicable to digital assets may increase our compliance costs, restrict our operations, or expose us to enforcement actions.

Governmental bodies and regulators, including the SEC, CFTC, FinCEN, IRS, Office of Foreign Assets Control, state authorities and non-U.S. regulators, continue to evaluate and assert jurisdiction over digital assets, mining activities, market structure, custody, broker-dealer/ATS regimes, sanctions/AML compliance, consumer protection, and energy usage. Legislative or regulatory changes (or interpretations, guidance or enforcement actions) could impose registration, licensing, reporting, capital, custody, segregation, disclosure, or other obligations on us, our pool operators, custodians, or counterparties. We may incur significant compliance costs, be required to modify or curtail activities, or face penalties, investigations, or other enforcement risks.

Conflicting or extraterritorial regulations may complicate cross-border operations and disrupt access to essential services.

Our activities, counterparties, and service providers may be subject to overlapping or conflicting requirements across jurisdictions. Compliance failures by pools, exchanges, custodians or other digital asset market participants could impair our business or our ability to access services, liquidate assets, or receive rewards.

Adverse changes in the tax treatment of digital assets may increase our tax liabilities and compliance costs.

Changes to the characterization of mining rewards, sales or dispositions of digital assets, information reporting, withholding, or cost basis rules may affect our financial results and cash flows.

Changes in geopolitical, social or general economic conditions, including macroeconomic conditions, could adversely affect our business.

Our business, financial condition, results of operations, liquidity, access to capital, and the market price of our securities may be adversely affected by macroeconomic conditions, including changes in interest rates, inflation, monetary and fiscal policy, currency devaluations, trade restrictions, tariffs, and global economic uncertainty. These conditions may affect the cost and availability of capital, demand for digital assets and related services, technology and energy costs, and investor sentiment.

Geopolitical conflict, including conflicts in Ukraine, Iran, and Gaza, and the global response to those conflicts could result in sanctions, trade restrictions, supply disruptions, cyber incidents, market volatility, or changes in energy and technology availability. Trade policies and tariffs affecting technology supply chains, and other events and circumstances, including political or social instability, natural disasters, pandemics, or disruptions to financial and digital-asset markets, could adversely affect our operations, the value and liquidity of digital assets, and investor sentiment.

Financing, Liquidity, Capital Markets and Listing Risks

We may be unable to raise additional capital when needed or on acceptable terms, and future financings may be highly dilutive.

Our growth plans and our ability to respond to market opportunities depend on access to equity or debt financing and cash flows from operations. Market conditions for digital asset-related issuers may limit capital availability or increase dilution and financing costs. Future securities offerings, including under our shelf registration statement and prospectus supplements, may significantly dilute existing stockholders and depress our stock price. During the fiscal year ended August 31, 2026, we raised substantial capital through our ATM Program, underwritten offerings, and private placements, significantly increasing our outstanding share count. As of August, 31, 2026, we had 613,267,022 shares of common stock outstanding, compared to 232,412,324 shares as of August 31, 2025.

Failure to maintain exchange listing standards may reduce liquidity, increase financing costs, and negatively affect valuation.

Our listing on the New York Stock Exchange subjects us to continued quantitative and qualitative listing requirements. Failure to maintain minimum price, market capitalization, public float, shareholder equity, governance, or filing standards could result in warnings, additional costs, or delisting, reducing liquidity and potentially triggering defaults or investor redemptions.

Limited access to banking, payments and insurance services for digital asset-related businesses may create operational friction and liquidity risks.

Financial institutions may decline to provide deposit, treasury, lending, merchant, custody or other services to digital asset-related companies, leading to operational friction, delays in settlements, and heightened liquidity and operational risk. We may face increased fees, caps, or service interruptions.

The terms of our 9.50% Redeemable Preferred Stock may limit our operational and financial flexibility.

In June 2026, we issued 3,500,000 shares of our 9.50% Redeemable Preferred Stock with a stated amount of $100 per share. The Preferred Stock carries cumulative dividend rights at an annual rate of 9.50% and ranks senior to our common stock with respect to dividend payments and rights upon liquidation. Our obligation to pay dividends on the Preferred Stock may reduce the cash available for common stock dividends, share repurchases, digital asset acquisitions, and other general corporate purposes. If we fail to pay dividends on the Preferred Stock four quarterly periods, the holders will have the right to elect one additional director to our Board, which could affect our governance and strategic decision-making. If we fail to pay dividends on the Preferred Stock six quarterly periods, the holders will have the right to elect two additional directors to our Board. The liquidation preference and dividend priority of the Preferred Stock may make it more difficult for us to raise additional equity capital in the future on terms favorable to our common stockholders.

Staking yield volatility may materially and adversely affect our ability to pay dividends on the Preferred Stock.

A significant portion of our revenue and cash generation is derived from staking rewards earned on our ETH holdings. Staking rewards are not fixed and may fluctuate based on the total amount of ETH staked across the network, changes to the Ethereum protocol, network transaction volume and priority fees, validator participation, and broader macroeconomic and cryptocurrency market conditions. As the total amount of ETH staked increases, the reward rate per validator generally decreases, which could materially reduce the yield we earn on our staked assets.

Because we rely on staking income to fund operating expenses and dividend payments, a sustained decline or period of heightened volatility in staking yields could impair our ability to meet obligations and maintain dividends. Staking rewards are denominated in ETH, so a decline in ETH’s price concurrent with a decline in staking yields would compound the adverse effect on cash flow and dividend coverage. The Board retains discretion over the declaration and payment of dividends, and there can be no assurance that dividends will be declared or paid in any particular amount or at all.

Future Ethereum upgrades, changes to issuance or reward mechanisms, new staking paradigms, regulatory developments, and continued issuance of ETH could further reduce staking yields or the price and liquidity of ETH. There can be no assurance that staking yields will remain sufficient to support our current business model or dividend policy, and historical staking yields should not be viewed as indicative of future performance.

Our option strategies and strategic investments expose us to additional volatility and counterparty risks.

We generate ETH option premium income through option strategies on our ETH holdings. These strategies expose us to changes in ETH prices and volatility, exercise and settlement risk, collateral requirements, liquidity constraints, and the creditworthiness and performance of counterparties. Losses or adverse fair-value changes could offset premiums received, reduce available liquidity, and impair our ability to cover dividend payments on the Preferred Stock.

Our strategic investments may be illiquid, may lose some or all of their value, and may introduce earnings volatility unrelated to ETH prices. We may be unable to realize value from these investments when needed, and losses or additional capital requirements could reduce cash available for operations or dividends.

We may be unable to access capital markets on acceptable terms, which could increase the cost of issuing parity or junior preferred stock and adversely affect our ability to maintain dividends on the Preferred Stock.

Our ability to fund operations, acquire ETH, support MAVAN, and pay dividends may depend on our ability to raise equity or debt capital. Adverse market conditions, declines in ETH or our securities, unfavorable investor sentiment, or restrictions affecting digital-asset issuers could limit access to capital or increase financing costs. If we cannot raise capital on acceptable terms, we may need to sell ETH or other assets at unfavorable prices, reduce investments and operations, or defer or limit dividend payments.

We may issue additional preferred stock, including parity or junior preferred stock, or other securities to raise capital or acquire ETH and other digital assets. The terms of future securities may increase our financing costs, dilute or subordinate existing holders, or impose restrictions that affect dividend payments. If we cannot issue such securities on acceptable terms, our liquidity and ability to maintain dividends on the Preferred Stock could be materially adversely affected.

Accounting, Financial Reporting and Internal Control Risks

Complex and evolving accounting for digital assets and related items may increase the volatility of our reported results and require significant judgment.

We make critical accounting estimates regarding impairment, fair value measurements, estimated useful lives of miners and infrastructure, revenue recognition (including principal-versus-agent considerations in pools), and the classification and presentation of digital assets. Changes in market inputs, evolving practice, or future GAAP guidance could materially affect our reported results. We adopted ASC 350-60 for digital assets effective in fiscal year 2025, which requires fair value measurement with changes recognized in net income. This accounting treatment has resulted in significant volatility in our reported results of operations, including a net loss of approximately $6.3 billion for the fiscal year ended August 31, 2026, substantially all of which was attributable to unrealized fair value changes in our ETH and BTC holdings.

Our efforts to remediate material weaknesses in our internal control over financial reporting may be unsuccessful or result in increased costs and demands on management resources.

We are undertaking efforts to remediate identified material weaknesses in our internal control over financial reporting. These remediation efforts may require significant management attention and resources, including changes to our processes, systems and controls. We cannot assure you that our remediation efforts will be successful or that additional material weaknesses or significant deficiencies will not be identified. If we are unable to remediate identified material weaknesses or maintain effective internal control over financial reporting, our ability to report our financial results accurately and on a timely basis could be adversely affected.

Strategic, Counterparty and Concentration Risks

Our strategic exposure to ETH may subject us to ETH-specific market, technology, and regulatory risks.

The Ethereum network has distinct market structure, technology, regulatory and liquidity considerations compared to Bitcoin. Adverse developments specific to ETH—including protocol changes, forks, validator dynamics, market dislocations, bridge or DeFi exploits, or regulatory actions—could impair the value or liquidity of our ETH holdings and related strategies.

We operate in a highly competitive industry and we compete against unregulated or less regulated companies and companies with greater financial and other resources, and our business, operating results, and financial condition could be adversely affected if we are unable to compete effectively.

The digital asset industry is highly innovative, rapidly evolving, and characterized by healthy competition, experimentation, changing customer needs, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements. We expect competition to intensify in the future as existing and new competitors introduce new products or enhance existing products. We face significant competition from a variety of companies around the world, ranging from digital asset-native companies, including decentralized exchanges, to large traditional financial services incumbents and financial technology providers.

Given the uneven enforcement by United States and foreign regulators, many of these competitors have been able to operate from offshore while offering large numbers of products and services to consumers, including in the United States, Europe, and other highly regulated jurisdictions, without complying with the relevant licensing and other requirements in these jurisdictions, and historically without penalty. Due to our regulated status in several jurisdictions and our commitment to legal and regulatory compliance, we have not been able to offer many popular products and services, including products and services that our unregulated or less regulated competitors are able to offer.

We also have expended significant managerial, operational, and compliance costs to comply with laws and regulations applicable to us in the jurisdictions in which we operate, and expect to continue to incur significant costs to comply with these requirements, which these unregulated or less regulated competitors have not had to incur.

If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, operating results, and financial condition could be adversely affected.

We face competition from other public and private companies pursuing digital asset treasury strategies, including ETH-focused treasuries, as well as from spot and staking exchange-traded products. These competitors may have greater financial resources or operational scale than we do, and the emergence of regulated investment vehicles providing exposure to ETH could reduce demand for our securities, including the Preferred Stock.

Dependence on counterparties and strategic partners may concentrate risk and exacerbate disruptions.

Our agreements with counterparties and strategic partners, including advisors and financial intermediaries, can concentrate risk. Failures, disputes, terminations, or changes in terms could disrupt operations or curtail growth. Certain arrangements may require bespoke governance or include preferential rights that constrain flexibility.

Our acquisition of Pier Two and the MAVAN platform may not achieve the anticipated benefits, and integration risks could adversely affect our operations.

On March 24, 2026, we completed the acquisition of Pier Two Holdings Pty Ltd. The success of the acquisition depends on our ability to integrate MAVAN’s operations and personnel, retain key technical personnel, and achieve anticipated synergies. Integration may be complicated by differences in business practices, technology platforms, and regulatory environments, including Australian regulatory requirements. If we are unable to successfully integrate MAVAN’s operations or achieve the anticipated benefits of the acquisition, our business, results of operations, and financial condition could be adversely affected. In addition, we recorded goodwill of approximately $21.7 million in connection with the acquisition, which is subject to impairment testing. If the MAVAN platform does not perform as expected or market conditions deteriorate, we may be required to record impairment charges that could materially affect our results of operations.

We have obligations to pay dividends on our 9.50% Redeemable Preferred Stock, and our ability to make such payments depends on our liquidity and financial condition.

In June 2026, we issued 3,500,000 shares of our 9.50% Redeemable Preferred Stock, which carries annual dividend obligations. Our ability to pay dividends on the Preferred Stock depends on our liquidity, including cash on hand, staking yields, and access to capital markets. Volatility in ETH prices, changes in staking economics, or disruptions to our capital market access could impair our ability to meet dividend obligations, which could adversely affect the market price of the Preferred Stock and our ability to access capital on favorable terms.

We may be deemed an investment company under the Investment Company Act of 1940, which would subject us to significant regulatory restrictions.

Our business strategy involves the accumulation and holding of ETH and other digital assets as our primary treasury reserve assets. If digital assets were to be deemed “investment securities” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or if the SEC or a court were to determine that our business activities constitute those of an investment company, we could be required to register under the Investment Company Act. Registration as an investment company would impose significant regulatory requirements and restrictions on our operations, including limitations on capital structure, the ability to transact with affiliates, compensation arrangements, and the ability to issue securities, any of which could materially limit our ability to pursue our ETH Treasury Strategy. We believe that we are not currently required to register as an investment company based on the nature of our operating activities, including our staking and validation operations, advisory services, and BTC mining activities; however, we cannot assure you that the SEC or a court would agree with our analysis. Changes in the composition of our assets, the nature of our activities, or applicable legal or regulatory standards could cause us to become subject to Investment Company Act regulation, which would have a material adverse effect on our business and financial condition.

Our derivative activities, including ETH-denominated option contracts, involve risks that could result in significant losses.

During fiscal year 2026, we began entering into ETH-denominated option contracts, primarily through the sale of put options, as part of our digital asset treasury strategy. These derivative activities expose us to risks including unfavorable movements in ETH prices, counterparty credit risk, margin and collateral requirements, and the potential for significant mark-to-market losses. Our derivative positions could result in losses that exceed our premium income, impair our liquidity, and adversely affect our financial condition and results of operations.

Our strategic investments in early-stage blockchain companies may result in significant losses and increased earnings volatility.

We have made strategic equity investments in early-stage blockchain and digital asset companies, which we refer to as “moonshot” investments. As of August 31, 2026, we had equity investments measured at cost of approximately $194.4 million and equity method investments measured at fair value of approximately $77.1 million. These investments are inherently speculative and may result in partial or total loss of our investment. In particular, our equity method investment in Eightco Holdings Inc. is measured at fair value, and changes in Eightco’s stock price are recognized directly in our earnings. Adverse developments at any of our portfolio companies could result in impairment charges, fair value losses, and additional sources of earnings volatility unrelated to our core ETH treasury and staking operations.

The change in our fiscal year-end may complicate period-to-period comparisons and impose additional reporting obligations.

On July 9, 2026, our Board approved a change in our fiscal year-end from August 31 to December 31, effective following the completion of the fiscal year ending August 31, 2026. The transition will require us to file a transition report on Form 10-KT for the four-month transition period from September 1, 2026 through December 31, 2026. The shortened transition period may complicate period-to-period comparisons of our financial results and could create challenges in meeting filing deadlines, particularly given the concurrent transition of our independent audit firm. Additionally, the change may affect the timing of our annual meeting, proxy statement, and other disclosure obligations.

We depend on several third-party service providers, independent contractors and consultants for various administrative and operational functions and expertise.

Our business and management team rely on several third-party infrastructure providers, independent contractors and consultants to provide valuable advisory and consulting services to our management team regarding the management of our digital asset portfolio. Under our Digital Asset Consulting Agreement (the "DACA") with Ethereum Tower LLC (“ETH Tower”), we have agreed to pay consulting fees calculated based on the value of digital assets managed. The DACA provides for a ten-year initial term and may be terminated under limited circumstances, with liquidated damages payable if we elected to terminate without cause prior to expiration. Separately, we have agreements with multiple third-party custodial services providers as well as several administrative services providers which support our management team. If one or more of our third-party service providers fails to perform its obligations, experiences operational disruptions, or if a critical operational, consulting and/or contractual relationship is terminated, we may face significant costs and operational disruptions that could materially affect our business, and we may be unable to find suitable replacement services at comparable cost to our existing providers.

Our significant unrealized losses and accumulated deficit may adversely affect investor confidence, our stock price, and our ability to access capital.

As of August 31, 2026, we had an accumulated deficit of approximately $6.0 billion, driven primarily by unrealized fair value losses on our digital asset holdings under ASC 350-60. While these losses are primarily non-cash in nature and do not reflect actual dispositions of our digital assets, the reported net losses may adversely affect investor confidence, analyst coverage, index inclusion, and the willingness of counterparties to transact with us. Our accumulated deficit may also affect our ability to pay dividends on our common stock or Preferred Stock, maintain compliance with listing standards, and access capital markets on favorable terms.

Cybersecurity, Data Privacy and Intellectual Property Risks

Cybersecurity incidents may compromise our systems, or those of our strategic partners or third-party vendors, and could result in the loss of digital assets, business disruption, regulatory penalties, and reputational harm.

Our operations depend on the security, reliability, and continuous availability of our information technology systems, digital asset custody infrastructure, validator nodes, and the systems of our third-party service providers, including custodians, cloud computing providers, staking infrastructure operators, and other vendors. We routinely face cybersecurity threats that could compromise the confidentiality, integrity, or availability of our systems and data, including threats from organized criminal groups, nation-state actors, hacktivists, and other malicious parties. These threats are becoming increasingly sophisticated and may involve ransomware, phishing, social engineering, credential theft, distributed denial-of-service attacks, supply chain compromises, and the exploitation of software vulnerabilities, including zero-day exploits. The rapid development and deployment of artificial intelligence and machine learning tools may further increase the frequency, sophistication, and effectiveness of cyberattacks.

A successful cyberattack or other security incident affecting our systems, or those of our custodians, validator infrastructure providers, or other third-party service providers, could result in the theft, loss, or unauthorized transfer of our digital assets, including ETH and BTC; the compromise or destruction of private keys or other cryptographic credentials; unauthorized access to sensitive business, financial, or personal information; disruption of our validator operations, staking activities, or treasury management functions; or damage to our technology infrastructure. As of August 31, 2026, we held digital assets with a fair value of approximately $14.6 billion, and any successful attack targeting our digital asset holdings or custody infrastructure could result in significant and potentially irrecoverable financial losses.

We may not be able to anticipate, detect, or respond to all cyberattacks or security incidents in a timely manner. The costs of investigating and remediating cybersecurity incidents, enhancing our defenses, and complying with applicable breach notification and data protection laws may be substantial. In addition, a cybersecurity incident could result in regulatory investigations, enforcement actions, litigation, loss of customer and counterparty confidence, and reputational harm. Our insurance coverage may not be adequate to cover all losses arising from a cybersecurity incident. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, cash flow, liquidity, prospects, and the trading price of our securities.

Loss of key personnel or inability to recruit and retain qualified employees, including key technical personnel acquired in the Pier Two acquisition, may adversely affect our operations and growth.

Our success depends on the continued services of our senior management team, including our Chief Executive Officer, Chief Financial Officer, and other key executives, as well as the specialized technical, operational, and compliance personnel necessary to operate our digital asset treasury, staking infrastructure, and validator operations. Competition for experienced blockchain, digital asset, cybersecurity, and financial technology professionals is intense, and we may be unable to attract, retain, or replace qualified employees on acceptable terms. Much of MAVAN’s technical expertise was obtained through the Pier Two acquisition, and there can be no assurance that we will be able to retain key technical and operational personnel acquired in that transaction, particularly given the competitive market for blockchain infrastructure talent.

The loss of one or more key executives or technical personnel, or our inability to attract and retain qualified employees, could disrupt our operations, delay the execution of our strategic initiatives, impair our ability to maintain and expand our validator infrastructure, and adversely affect our competitive position. We do not maintain key-person life insurance on any of our executives or employees. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and the trading price of our securities.

Intellectual property disputes or alleged infringements could disrupt our business, divert management resources, and result in significant costs.

Our business relies on proprietary technology, trade secrets, and know-how related to our validator operations, staking infrastructure, digital asset treasury management, and related systems. We may be unable to adequately protect our intellectual property rights, and unauthorized parties may attempt to copy or otherwise obtain and use our proprietary technology. In addition, third parties may assert that our technology, products, or services infringe, misappropriate, or otherwise violate their intellectual property rights. The defense of intellectual property claims, whether or not meritorious, can be time-consuming and costly, and could divert management attention from our business operations. An adverse outcome in any such proceeding could require us to pay significant damages, enter into licensing arrangements on unfavorable terms, or cease using certain technology, any of which could have a material adverse effect on our business, financial condition, and results of operations.

We are subject to data privacy and protection laws and regulations, and any failure to comply could result in regulatory penalties and reputational harm.

We collect, process, store, and transmit certain personal and sensitive information in connection with our operations, including employee data, investor information, and data related to our business partners and counterparties. We are subject to a variety of federal, state, and foreign laws and regulations relating to data privacy, data protection, and information security, including state consumer privacy laws and international data protection regulations. These laws and regulations continue to evolve and may impose new or additional obligations on our business. Compliance with these requirements may require significant resources and expenditures. Any failure or perceived failure to comply with applicable data privacy and protection laws, or any security breach involving personal or sensitive information, could result in regulatory investigations, enforcement actions, fines, litigation, and reputational damage, any of which could have a material adverse effect on our business, financial condition, and results of operations.

Litigation, governmental investigations, enforcement actions, and contractual disputes could expose us to significant liabilities and divert management resources.

We may from time to time be subject to litigation, governmental investigations, enforcement actions, and contractual disputes arising in the ordinary course of our business or in connection with our digital asset activities, staking operations, capital markets transactions, or strategic investments. The digital asset industry has been subject to heightened regulatory scrutiny and enforcement activity, and we could become the target of investigations, subpoenas, or enforcement proceedings by the SEC, CFTC, FinCEN, state regulators, or other governmental authorities. The costs of defending against such claims and proceedings, even if ultimately resolved in our favor, can be substantial and may divert management’s time and attention from our operations. An unfavorable outcome in any such matter could result in significant monetary damages, injunctive relief, consent orders, or other remedies that could have a material adverse effect on our business, financial condition, results of operations, and the trading price of our securities.