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Item 1A. Risk Factors

2026-03-16 compared with 2025-03-26 · 419 added, 158 removed, 198 unchanged (74% of the section changed)

5 unchanged sentences

If any of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected.

Risks Related to Leap’s Financial Position and Capital Needs

We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the future.

We are a clinical-stage biopharmaceutical company with a limited operating history on which to base your investment decision.

Investment in our biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that our lead product candidate, sirexatamab, or any other products will fail to gain regulatory approval or become commercially viable.

Risk Factors Summary

The following is a summary of the principal factors that make an investment in our securities speculative or risky, all of which are more fully described below.

This summary should be read in conjunction with the full description of “Risk Factors” in this section and should not be relied upon as an exhaustive summary of the material risks facing our business.

In addition to the following summary and the information in this section, you should consider the other information contained in this Annual Report on Form 10-K before investing in our securities.

Risks Related to the Company’s Strategy and Industry

● We have recently shifted a significant portion of our business strategy towards a focus on our digital asset treasury strategy, and we may be unable to successfully execute this new strategy.

● ZEC is a highly volatile digital asset, and fluctuations in the price of ZEC may adversely influence our financial results and the market price of our listed securities.

● We have limited experience in investing in and managing the ownership of digital assets, and we rely on a third party custodian for the trading execution and custody of our ZEC.

● We may inadvertently and without knowledge, directly or indirectly, engage in transactions in violation of U.S.

or foreign sanctions laws.

● The cryptography used on the Zcash network could fail or could be used to facilitate illicit activities, and businesses that facilitate transactions in ZEC may be at increased risk of criminal or civil lawsuits.

● If a security breach or cyberattack gives unauthorized parties access to our ZEC, or if our access to our wallets holding ZEC is lost or destroyed, we may lose some or all of our ZEC.

● Disruptions, forks, 51% attacks, hacks, network disruptions, or other adverse events or other compromises to blockchain networks, could materially and adversely impact us.

● We face risks relating to the potential compromise of the Zcash network security by emerging technologies, including artificial intelligence and quantum computing.

● ZEC is subject to significant legal, commercial, tax, technical and regulatory uncertainty.

● Zcash does not pay interest or dividends and our ability to generate a return on investment from our purchases of ZEC is dependent on an appreciation in value of ZEC.

● Digital asset holdings are less liquid than cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

● The concentration of our expected digital asset holdings relative to non-digital assets enhances the risks inherent in our digital asset treasury strategy.

● If we are unable to raise additional capital on acceptable terms, our ability to implement and sustain a digital asset treasury strategy may be compromised.

● Our ability to time the price of our purchases of ZEC pursuant to our digital asset treasury strategy will be limited.

● A significant decrease in the market value of our digital asset holdings could adversely affect our ability to satisfy financial obligations, including any debt financings.

● Our common stock may trade at a substantial premium or discount to the value of ZEC we hold, and our stock price may be more volatile than the price of ZEC.

● Our Zcash treasury strategy subjects us to enhanced regulatory oversight.

● Absent federal regulations, there is a possibility that ZEC may be classified as a “security.” Any classification of ZEC as a “security” could lead to our falling under the definition of “investment company” under the Investment Act of 1940, as amended.

● We may be deemed to be a “commodity pool” under CEA and CFTC Rules as a result of our commodity interest trading.

● We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and ETPs, or to obligations applicable to investment advisers.

● Changes in regulatory interpretations could require us to register as a money services business or money transmitter, leading to increased compliance costs or operational shutdowns.

● The availability of spot ETPs for digital assets may adversely affect the demand for our common stock.

● Although we currently are not considered to be a “controlled company” under Nasdaq corporate governance rules, we may in the future become a controlled company due to the concentration of voting power among Winklevoss Capital and their affiliates.

Risks Related to Leap

● We have a history of losses, have no source of product revenue, and may never become profitable.

● We will require additional capital to fund our operations which may not be available on acceptable terms, or at all.

● Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates.

● Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.

● The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable .

● The therapeutic safety and efficacy of sirexatamab is unproven, and we may not be able to successfully develop and commercialize any of our products.

● We face substantial competition from much larger competitors.

● We may acquire other assets, form collaborations or make investments in other companies or technologies, that could harm our operating results, dilute our stockholders’ ownership, or cause us to incur significant expense.

● We rely on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials.

● We may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates and may lose potential revenues.

● If we are unable to protect our intellectual property rights or if our intellectual property rights are inadequate to protect our technology and product candidates, our competitive position could be harmed.

Risks Related to our Common Stock

● If our share price continues to be low and volatile, we could be subject to securities class action litigation and our stockholders could incur substantial losses.

● We are a “smaller reporting company,” and we take advantage of reduced disclosure and governance requirements applicable to smaller reporting companies.

● If we fail to maintain an effective system of disclosure controls and internal controls over financial reporting, or if we fail to adequately remediate the material weakness identified in connection with the preparation of our financial statements for the quarter and fiscal year ended December 31, 2025, our ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected.

● Sales of a substantial number of shares of our common stock in the public market by our stockholders could cause our stock price to fall.

● Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

● Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our Common Stock.

Risks Related to the Company’s Strategy and Industry

We have recently shifted a significant portion of our business strategy towards a focus on our digital asset treasury strategy, and we may be unable to successfully execute this new strategy.

In October 2025, we shifted a significant portion of our business strategy towards the implementation of our digital asset treasury strategy, including material investments in ZEC.

There is no assurance that we will be able to successfully execute this new strategy or operate ZEC-related activities at the scale or profitability currently anticipated.

This strategic shift requires specialized skillsets and operational, technical and compliance infrastructure to support our accumulation of ZEC and related activities.

This also requires that we implement different security protocols and treasury management practices.

Although we have engaged consultants and added additional board members with experience in these areas, there can be no assurance that we will be able to effectively execute on this strategy within our expected timeframe, or at all.

Further, there is ongoing scrutiny and limited formal guidance from regulatory agencies, including Nasdaq and the SEC, with respect to the treatment of public company digital asset treasury strategies.

Errors by key management or our third party service providers could result in significant loss of funds and value, which could in turn result in a significant decrease in the value of our common stock.

As a result, our shift towards our digital asset treasury strategy could have a material adverse effect on our business and financial condition.

ZEC is a highly volatile digital asset, and fluctuations in the price of ZEC may adversely influence our financial results and the market price of our listed securities.

We have used a significant portion of capital in our treasury to purchase ZEC, a digital asset, and plan to continue to do so in the future.

The price of ZEC has been subject to dramatic price fluctuations and is highly volatile.

In the twelve months ended December 31, 2025, ZEC has traded between approximately $26.14 and $736.51.

Any increase or decrease in the fair value of ZEC 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 ZEC holdings could have a material adverse effect on our financial results and the market price of our securities.

In addition, investors may view the value of our securities as dependent upon or linked to the value or change in the value of our ZEC holdings, and accordingly, the price of ZEC may significantly influence the market price of our securities.

ZEC is a highly volatile asset.

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 ZEC decreased substantially, including as a result of:

● decreased user and investor confidence in Zcash, including due to the risk factors described herein

● investment and trading activities such as (i) trading activities of highly active retail and institutional users, speculators, miners, and investors, (ii) significant dispositions of ZEC by large holders, or (iii) actual or perceived manipulation of the markets for ZEC;

● negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, Zcash, for example:

(i) public, legislative, or regulatory perception that ZEC or other digital assets can be used as a vehicle for money laundering or to circumvent government regulations or sanctions;

(ii) regulations in the European Union that, beginning on July 1, 2027, will prohibit transactions involving anonymous wallets and privacy-focused digital assets such as ZEC;

(iii) filings for bankruptcy protection or bankruptcy proceedings of major digital assets or blockchain industry participants;

(iv) public perception regarding technological safeguards with respect to theft or loss of digital assets;

and (v) activities relating to other high profile digital assets, including bitcoin or “meme coins”;

● changes in consumer preferences and the perceived value or prospects or utility of Zcash;

● developments affecting other companies pursuing a digital asset treasury 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 assets by such other companies, regulatory or legal judgments or actions against such other companies due to their adoption of a digital asset treasury strategy, or any other similar actions or negative outcomes impacting such other companies;

● competition from other digital assets that exhibit comparable or better privacy, speed, security, scalability or 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;

● the introduction of a government-issued digital currency that could eliminate or reduce the need or demand for private-sector issued digital assets such as ZEC, or significantly limit their utility;

● 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 ZEC or adversely affect investor confidence in digital assets generally;

● developments relating to the Zcash blockchain and protocol, including (i) changes to the Zcash blockchain and protocol that impact its security, speed, scalability, usability or value, such as changes to the cryptographic security protocol underpinning the blockchain and protocol, changes to the finality of transactions, and similar changes;

(ii) failures to make upgrades to the Zcash blockchain and the protocol to adapt to security, technological, legal or other challenges;

and (iii) changes to the Zcash blockchain and protocol that introduce software bugs, security risks or other elements that adversely affect Zcash and the privacy functionality;

● interruptions, failures, unavailability, or other short or long term disruptions in services of trading venues for ZEC or other digital assets, including but not limited to those arising from hacking, sabotage, or other intentional acts;

● 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 access to, functionality of, or performance of Zcash, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from trading in and holding ZEC;

● 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 Zcash blockchain becoming insecure or ineffective.

In addition, the U.S.

and international stock markets and the markets for both digital asset-influenced and technology companies have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies in those markets.

In particular, future trading prices in our securities may reflect market dynamics that are not connected to valuation methods commonly associated with operating companies in similar industries or with companies engaged predominantly in passive investments in digital assets or other commodities, such as exchange-traded products (“ETPs”).

Equity market capitalizations of other such companies are often in excess of stockholders’ equity calculated in accordance with U.S.

generally accepted accounting principles, and in excess of valuations that might traditionally be expected based on their operating performances, cash flows and net assets.

Investors may therefore be unable to assess the value of our common stock or evaluate the risks of an investment in our company using traditional or commonly used enterprise valuation methods.

We cannot predict how these dynamics may evolve over time, or whether or how long they may last.

These market and industry factors may significantly harm the market price of our listed securities, regardless of our actual operating performance.

The price of our listed securities has been and is likely to continue to be volatile, and with the recent adoption of our new digital asset treasury strategy, we expect 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 ZEC holdings, the price of ZEC may significantly influence the market price of our listed securities.

The price of ZEC has historically been, and is likely to continue to be, volatile.

We have limited experience in investing in and managing the ownership of digital assets, and we rely on an affiliate of Winklevoss Capital, Gemini Space Sciences LLC, for the trading execution and custody of our ZEC, and we will not have direct control over our digital assets held through such custodian.

We have limited experience in investing in and managing the ownership of digital assets, such as ZEC.

We are reliant on an affiliate of Winklevoss Capital, Gemini Space Sciences LLC (“Gemini”), for the trading execution by which we acquire ZEC and to serve as the custodian for our ZEC on its regulated exchange and wallet storage system.

As a result, our ZEC holdings are concentrated with a single custodian, and we rely solely on its proprietary storage system and wallet infrastructure, security infrastructure, financial reporting, and software systems for our ZEC holdings.

In Gemini’s structure to support trading, customer digital assets are pooled together, and Gemini relies on an internal customer ledger to maintain the segregated customer digital asset ownership.

Gemini’s Omnibus Wallet Structure is made up of a set of online (i.e., “Hot”) and offline (e.g., “Cold”) wallets (or “storage tiers”), with Gemini responsible for managing the movement of digital assets between the online and offline storage tiers.

While we have agreements governing Gemini’s activities relating to our account, we have limited influence over its actual performance.

ZEC 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 ZEC is held.

While the Zcash 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 ZEC 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 ZEC held in the related digital wallet.

Furthermore, we cannot provide assurance that the digital wallets at Gemini will not be compromised as a result of a cyberattack.

ZEC and the Zcash 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.

The failure of Gemini to successfully carry out its contractual duties, trading instructions, safeguard our ZEC, or maintain its internal systems and processes could have a material adverse effect on our ZEC holdings, digital asset treasury strategy, financial condition, and business operations.

Moreover, our agreements with Gemini might terminate for a variety of reasons, and if we need to enter into alternative custody arrangements, we may not be able to enter into arrangements with alternative custodians or to do so on commercially reasonable terms.

Switching or adding additional custodians for digital assets involves additional cost, custody risk, and requires management time and focus.

While we will conduct due diligence on our custodians and any exchanges or platforms we may use, there can be no assurance that such diligence will uncover all risks, including operational deficiencies, hidden vulnerabilities or legal noncompliance.

In addition, there is risk during any transition period when a new custodian would commence services to safeguard our ownership of our digital assets.

There can be no assurance that we will not encounter challenges in the custody of our digital assets and that those challenges will not have a material adverse impact on our business, financial condition and prospects, and results of operations.

Additionally, our use of custodians, such as Gemini, exposes us to the risk that the ZEC that the custodian holds on our behalf could be subject to bankruptcy, receivership or similar 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 ZEC.

A series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions, criminal charges, and other events relating to companies operating in the digital asset industry, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry, and the filing and subsequent settlement of a civil fraud lawsuit have highlighted the counterparty risks applicable to owning and transacting in digital assets.

These bankruptcies, closures, liquidations and other events have likely negatively impacted the adoption rate and use of digital assets.

Additional bankruptcies, closures, liquidations, regulatory enforcement actions, criminal charges, or other events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price, and use of digital assets, limit the availability to us of financing collateralized by such assets, or create or expose additional counterparty risks.

Any loss associated with such bankruptcy, receivership or similar insolvency proceedings is unlikely to be covered by any insurance coverage we may maintain related to our ZEC.

Even if we are able to prevent our digital assets from being considered the property of a custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our digital assets held by the affected custodian during the pendency of the insolvency proceedings.

Any such outcome could have a material adverse effect on our financial condition and the market price of our listed securities.

The legal framework governing digital asset ownership and rights in custodial or insolvency contexts remains uncertain and continues to evolve, which could result in unexpected losses, protracted recovery processes or adverse treatment in insolvency proceedings.

Any insurance that may cover losses of our ZEC holdings may cover none or only a small fraction of the value of the entirety of our ZEC holdings, and there can be no guarantee that such insurance will be maintained as part of the custodial services we have or that such coverage will cover losses with respect to our ZEC.

In addition, we rely, for financial reporting requirements and our own internal controls, on the controls that are implemented, executed, and reported on by Gemini and other third party service providers.

If those controls fail, are modified, or if assurance reports are unavailable or delayed, our ability to maintain effective internal controls over financial reports could be adversely affected.

A failure of controls could have a material adverse effect on our digital asset treasury strategy, financial condition, and business operations.

Because of the pseudonymous nature of blockchain transactions, we may inadvertently and without knowledge, directly or indirectly, engage in transactions with or for the benefit of prohibited persons under U.S.

or foreign sanctions laws.

We are subject to the rules enforced by the Office of Foreign Asset Control (“OFAC”), including prohibitions on conducting direct or indirect business with persons named on, or owned by persons named on, OFAC’s various sanctions lists, including the Specially Designated Nationals and Blocked Persons list.

We are also prohibited from direct or indirect dealings with persons located in, organized in, or nationals of, jurisdictions subject to U.S.

embargos, and may be prohibited from dealing with persons in other jurisdictions subject to targeted U.S.

sanctions compliance obligations apply to transactions in digital assets and U.S.

sanctions authorities have in recent years directed significant attention to sanctions compliance in the digital asset industry.

Because of the pseudonymous nature of blockchain transactions and decentralized applications, we may inadvertently and without knowledge, directly or indirectly, engage in transactions with or for the benefit of prohibited persons.

Civil liability for OFAC sanctions violations

is typically regarded as “strict liability” violations, meaning we may be held responsible for transacting with prohibited parties even if we have no knowledge that a particular counterparty is a prohibited person under the OFAC sanctions regulations.

In addition, we may be subject to non-U.S.

economic sanctions laws and regulations to the extent we conduct activity within the jurisdiction of other sanctions regimes, including those of the European Union and United Kingdom.

OFAC and other governmental authorities have significant discretion in the interpretation and enforcement of sanctions laws and regulations.

Moreover, economic sanctions laws and regulations continue to evolve, often with little or no notice, which could raise operational or compliance challenges.

If it is determined that we have transacted with prohibited persons, even inadvertently, this could result in substantial reputational harm, fines or penalties, and costs associated with governmental inquiries and investigations.

Any or all of the foregoing could have a material adverse effect on our business, prospects, operations or financial condition.

The cryptography used to enhance the privacy of transactions on the Zcash Network could ultimately fail or could be used to facilitate illicit activities, and businesses that facilitate transactions in ZEC may be at increased risk of criminal or civil lawsuits, or of having services cut off, which could negatively affect the price of ZEC and the value of our listed securities.

The Zcash network uses zk-SNARKs, which provide additional layers of confidentiality to transactions on the Zcash Network by protecting the amount and the recipient in ZEC transactions.

This cryptography could ultimately fail, resulting in less privacy than believed or no privacy at all, and could adversely affect one’s ability to complete transactions on any such digital asset network or otherwise adversely interfere with the integrity of the relevant blockchain.

Because ZEC is a privacy-preserving digital asset, it is also subject to certain types of attacks that may go undetected.

For example, on February 5, 2019, the team behind ZEC announced that it discovered a vulnerability in its zk-SNARK implementation on March 1, 2018 that was subsequently patched in connection with a network upgrade called “Sapling” in October 2018.

Digital asset networks have in the past been, and may continue to be, used to facilitate illicit activities, including money laundering, human and drug trafficking, arms dealing and other crimes.

Moreover, law enforcement agencies and other market participants have often relied on the transparency of blockchains to facilitate investigations and comply with laws, such as anti-money laundering and economic sanctions laws.

Because of the privacy-enhancing features of the Zcash Network, law enforcement agencies and other market participants may have less visibility into transaction-level data, which may encourage bad actors to misuse the Zcash Network for such illicit purposes.

As a result, businesses that facilitate transactions in ZEC may be at increased risk of potential criminal charges or civil lawsuits, or of having banking or other services cut off if there is a concern that these features interfere with the performance of anti-money laundering duties and economic sanctions checks.

Since 2019, ZEC, along with several other privacy tokens including Monero, Dash, and Horizen have been delisted from multiple exchanges.

Although these digital asset trading platforms did not disclose the reasons for such delisting, and some digital asset trading platforms subsequently relisted ZEC, it is believed that they were the result of the privacy-enhancing features of the digital assets, and there is a risk that other digital asset trading platforms may remove ZEC from their platforms as a result of these concerns.

Other service providers of such businesses may also cut off services if there is a concern that the Zcash Network is being used to facilitate crime.

Any of the aforementioned occurrences could increase regulatory scrutiny of the Zcash Network and/or adversely affect the price of ZEC, the attractiveness of the Zcash Network and an investment in our listed securities.

If we, Gemini or our respective third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our ZEC, or if our access to our wallets holding ZEC is lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our ZEC and our financial condition and results of operations could be materially adversely affected.

We expect that substantially all of the ZEC we acquire will be held in accounts at Gemini.

Security breaches and cyberattacks are of particular concern with respect to digital assets, including ZEC.

ZEC and other blockchain-based digital assets and the entities that provide services to participants in the Zcash ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.

For example, in October 2021, it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers.

Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400 million in digital assets from customers.

A successful security breach or cyberattack could result in:

● a partial or total loss of our ZEC in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our ZEC;

● harm to our reputation and brand;

● improper disclosure of data and violations of applicable data privacy and other laws;

● significant regulatory scrutiny, investigations, fines, penalties and other legal, regulatory, contractual and financial exposure, which in turn could adversely affect our stock price.

Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate in the digital asset ecosystem, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader Zcash ecosystem or in the use of the Zcash Network to conduct financial transactions, which could negatively impact us.

Attacks upon systems across a variety of industries, including industries related to digital assets such as ZEC, 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, including Gemini.

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 conflict, as well as the conflicts in the Middle East and Latin America, 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 Zcash ecosystem, including third-party services on which we rely, could materially and adversely affect our financial condition and results of operations.

We face significant risks relating to disruptions, forks, 51% attacks, hacks, network disruptions, or other adverse events or other compromises to blockchain networks, which could materially and adversely impact our business, financial condition and results of operations.

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.

Blockchain 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 digital assets.

Additionally, forks, or splits in the underlying protocol may occur when participants fail to reach consensus on proposed upgrades or changes.

Forks can lead to the creation of duplicate networks, confusion among market participants, dilution of the original network’s value and disruption of the network’s operations.

Hard forks, in particular, can materially and adversely impact the perceived stability and value of digital assets, leading to reduced demand and price declines.

Further, hacks and other security breaches targeting the core infrastructure of blockchain networks or major participants, such as exchanges and custodians, including Gemini, could severely impact the reputation and market confidence in these networks.

Exploits of protocol-level vulnerabilities could also compromise the integrity of blockchain networks, resulting in a substantial loss of value.

The success and growth of digital 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 price, 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 digital assets, 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.

We face risks relating to the potential compromise of the Zcash Network security by emerging technologies, including artificial intelligence and quantum computing, which may materially and adversely impact our operations and financial condition.

The security and integrity of the Zcash Network are fundamentally dependent on the robustness of its cryptographic algorithms.

Blockchain protocols rely heavily on public key cryptography and hashing algorithms to secure transactions, safeguard private keys, and prevent double-spending.

Advances in emerging technologies, particularly artificial intelligence (“AI”) and quantum computing, may pose significant risks to the network’s security and operational stability.

Quantum computing, in particular, presents a long-term threat to the cryptographic assumptions underpinning the Zcash Network.

Should quantum computing achieve sufficient maturity, it could undermine the effectiveness of the cryptographic algorithms used to secure the blockchain.

A sufficiently powerful quantum computer could potentially reverse-engineer private keys from public addresses or compromise the blockchain’s consensus mechanism, leading to the theft of digital assets, double-spending, and other forms of fraud.

Although current quantum computing capabilities are not yet at this level, advancements in quantum technologies could materialize more rapidly than anticipated, creating significant systemic risks for the Zcash Network.

AI may also pose indirect security risks.

AI-driven cyberattacks, including advanced phishing schemes, autonomous malware, and intelligent blockchain analysis tools, could increase the sophistication and success rate of attacks targeting Zcash users, exchanges, custodians, and node operators.

The use of AI to exploit vulnerabilities in software, mining hardware, or network protocols could threaten the stability and reliability of the Zcash Network and other digital asset ecosystems.

There can be no assurance that Zcash’s current cryptographic safeguards will be sufficient to protect against future technological advances.

While research and development efforts are ongoing to develop quantum-resistant cryptographic protocols, the Zcash network may face challenges in adopting such technologies at scale, particularly given its decentralized governance structure.

Any successful attack or perceived vulnerability arising from AI or quantum computing could materially and adversely affect the price, liquidity, and adoption of ZEC and could negatively impact our business, financial condition and results of operations.

ZEC and other digital assets are novel assets and are subject to significant legal, commercial, tax, technical and regulatory uncertainty, which could materially adversely affect our financial position, operations and prospects.

The first digital asset, Bitcoin, was launched in 2009.

Zcash was launched in 2016.

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

For example, beginning on July 1, 2027, regulations in the European Union will prohibit transactions involving anonymous wallets and privacy-focused digital assets such as ZEC.

In addition, our accounting for digital assets relies on complex judgment and emerging interpretations of U.S.

Digital assets are a relatively new asset class, and accordingly, accounting and tax guidance, regulations, and best practices are evolving and rapidly changing.

Future changes in authoritative guidance, SEC views, or industry practice could require us to change our accounting or tax approach, which could materially affect our financial statements, reported earnings, comparability of financial results in future periods with prior periods, or comparability with other companies.

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

It is not possible to predict whether or when new laws and regulations will be enacted or adopted that change the legal framework governing digital assets or provide additional authorities to the SEC, the Commodity Futures Trading Commission (the “CFTC”), or other regulators, or whether or when any other federal, state or foreign legislative or regulatory bodies will take any similar actions.

For example, legislation such as the Digital Asset Market Clarity Act of 2025 (the “CLARITY Act”), a comprehensive digital asset market structure and regulation bill, as proposed by the U.S.

House of Representatives in July 2025 could, if it became law, grant the CFTC additional regulatory and supervisory powers with respect to spot digital assets as “digital commodities” and potentially result in the imposition of additional regulatory obligations and burdens to us, which could potentially include registration, disclosure, reporting, and business conduct requirements.

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 ZEC specifically.

The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of ZEC, as well as our ability to hold or transact in ZEC, and in turn adversely affect the market price of our listed securities.

Furthermore, other companies have begun to adopt strategies similar to ours with respect to digital assets, and this could result in new laws or regulations, or new interpretations of existing laws or regulations, impacting our digital asset treasury strategy, particularly if the adoption of digital asset strategies by other companies continues or accelerates.

Moreover, the risks of engaging in a digital asset treasury strategy generally, and ZEC as the digital asset specifically, 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, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

The growth of the digital assets industry in general, and the use and acceptance of Zcash in particular, may also impact the price of ZEC and is subject to a high degree of uncertainty.

The pace of worldwide growth in the adoption and use of ZEC may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to ZEC, institutional demand for ZEC as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for ZEC as a store of value or means of payment, and the availability and popularity of alternatives.

Even if growth in ZEC adoption occurs in the near or medium term, there is no assurance that ZEC usage will continue to grow over the long term.

A variety of technical factors related to the Zcash blockchain could also impact the price of ZEC.

For example, malicious attacks by miners, inadequate mining fees to incentivize validating of Zcash transactions, hard “forks” of the Zcash blockchain into multiple blockchains, and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the Zcash blockchain and protocol, and negatively affect the price of ZEC.

The liquidity of ZEC may also be reduced and damage to the public perception of ZEC may occur, if financial institutions were to deny or limit banking services to businesses that hold ZEC, provide Zcash-related services or accept ZEC as payment, which could also decrease the price of ZEC.

The liquidity of ZEC may also be impacted to the extent that changes in applicable laws and regulatory requirements, such as those proposed by the European Union, negatively impact the ability of exchanges and trading venues to provide services for ZEC and other privacy-based digital assets.

ZEC does not pay interest or dividends and our ability to generate a return on investment from our purchases of ZEC is dependent on an appreciation in value of ZEC.

ZEC does not pay interest or dividends.

The ability to generate a return on investment from the purchase of ZEC will depend on whether there is appreciation in the value of ZEC following our purchases.

Future fluctuations in ZEC’s trading prices may result in our converting ZEC into US dollars, Euros, or other assets with a value substantially below the cost of such purchases.

Digital asset holdings are less liquid than cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Our ZEC holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Historically, the digital asset market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, concerns regarding pseudonymity of digital asset addresses, 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 digital assets at favorable prices or at all.

As a result, digital asset holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Further, digital assets we hold with our custodians and transact with our trade execution partners do not enjoy the same protections or insurance as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered digital assets or otherwise generate funds using our digital asset holdings, including in particular 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, including capital raising transactions using ZEC as collateral, or otherwise generate funds using our ZEC holdings, 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.

The concentration of our ZEC holdings could enhance the risks inherent in our digital asset treasury strategy.

The concentration of our ZEC holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our ZEC digital asset treasury strategy.

Any future significant declines in the price of ZEC would have a more pronounced impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.

Historically, the digital asset 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 ZEC at favorable prices or at all.

Further, any ZEC we hold with Gemini or other 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.

If we are unable to sell our ZEC, enter into additional capital raising transactions, or otherwise generate funds using our ZEC holdings, or if we are forced to sell our ZEC at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

The concentration of our expected digital asset holdings relative to non-digital assets enhances the risks inherent in our digital asset treasury strategy.

We expect ZEC to comprise a significant portion of our total assets.

The concentration of our digital asset holdings limits the risk mitigation that we could take advantage of by purchasing a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our digital asset treasury strategy.

If there is a significant decrease in the price of ZEC, we will experience a more pronounced impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.

If we are unable to raise additional capital on acceptable terms, our ability to implement and sustain a digital asset treasury strategy may be compromised.

Our digital asset treasury strategy contemplates the discretionary purchase of ZEC.

The capital required to acquire and actively manage ZEC may exceed our existing cash resources and any cash flows from operations.

Market conditions, our share price performance, the volatility of digital assets, and regulatory uncertainties could impair our ability to access debt or equity capital on terms acceptable to us, or at all.

Failure to obtain necessary financing could force us to curtail or abandon our digital asset strategy, which could materially harm our growth prospects and the value of our securities.

Our ability to time the price of our purchases of ZEC pursuant to our digital asset treasury strategy will be limited.

In future periods, we intend to continue to acquire additional ZEC in accordance with our digital asset treasury strategy.

ZEC is a highly volatile asset.

Volatility may continue in the future and historical trends could reverse dramatically.

As a result, there can be no assurance that we will be able to purchase ZEC at favorable prices or avoid losses associated with declines in the value of ZEC.

Our ability to time such purchases to coincide with favorable market conditions may be limited.

A significant decrease in the market value of our digital asset holdings could adversely affect our ability to satisfy financial obligations, including any debt financings.

As part of our digital asset treasury strategy, we may incur indebtedness and other fixed charges in the future in order to raise capital for our business strategies.

If our businesses do not generate cash flow in future periods sufficient to satisfy our financial obligations, including our debt, if any, we intend to fund our obligations using cash flow generated by equity or debt financing.

Our ability to obtain equity or debt financing may in turn depend on, among other factors, the value of our ZEC holdings, investor sentiment and the general public perception of ZEC, as well as our strategy and our value proposition.

Accordingly, a significant decline in the market value of our ZEC holdings 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 to satisfy our financial obligations.

As ZEC will constitute a substantial part of our balance sheet, if we are unable to generate revenue or secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell ZEC to satisfy these obligations.

Any such sale of ZEC may have a material adverse effect on our operating results, financial condition and future prospects, and could impair our ability to secure additional equity or debt financing in the future.

Our inability to secure additional equity or debt financing in a timely manner, on favorable terms or at all, or to sell our ZEC in amounts and at prices sufficient to satisfy our financial obligations, including our debt service obligations, could cause us to default under such obligations.

Any default on our indebtedness may have a material adverse effect on our operating results, financial condition and future prospects.

Our common stock may trade at a substantial premium or discount to the value of ZEC we hold, and our stock price may be more volatile than the price of ZEC.

The market price of our common stock reflects many factors that do not affect the spot price of ZEC and may therefore diverge materially — positively or negatively — from the per-share value of our ZEC holdings (net of cash, other assets and liabilities).

These factors include, among others:

our corporate-level expenses;

the timing, size and pricing of equity or debt financings (including at-the-market offerings, equity line financings or convertible securities), equity awards and other sources of dilution;

expectations about our future purchases or sales of ZEC;

our liquidity and public float;

differences in trading hours and market microstructure between our common stock and spot markets for ZEC;

changes in index inclusion, analyst coverage or investor sentiment toward us as an operating company;

our corporate governance, financial reporting, and any actual or perceived operational, custody, technology or regulatory risks specific to us;

and broader equity-market conditions independent of crypto-asset markets.

As a result, our common stock may trade at a premium or discount to the value of our ZEC holdings for extended periods, and may be more volatile than the price of ZEC.

Accordingly, investors could lose all or a substantial part of their investment even if the market price of ZEC does not decline, and may not benefit commensurately from increases in the market price of ZEC.

Our ZEC treasury strategy subjects us to enhanced regulatory oversight.

Several spot ETPs have received approval from the SEC to list their shares on a U.S.

national securities exchange with continuous share creation and redemption at net asset value.

Even though we are not, and do not function in the manner of, a spot ETP, it is possible that we nevertheless could face regulatory scrutiny from the SEC or other federal or state agencies due to our ZEC holdings.

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 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 ZEC through Gemini, which is subject to anti-money laundering regulation and related compliance rules in the United States, if we are found to have purchased any of our ZEC from bad actors that have used ZEC to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in ZEC by us may be restricted or prohibited.

Although our ZEC holdings do not currently serve as collateral securing any of our outstanding indebtedness as of the date hereof, we may incur indebtedness or enter into other financial instruments in the future that may be collateralized by our ZEC holdings.

We may also consider pursuing strategies to create income streams or otherwise generate funds using our ZEC holdings.

These types of ZEC-related transactions are the subject of enhanced regulatory oversight by international, federal, and state regulatory agencies.

These and any other ZEC-related transactions we may enter into, beyond simply acquiring and holding ZEC, may subject us to additional regulatory compliance requirements and scrutiny, including under international, federal, and state money services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.

In addition, private actors that are wary of ZEC or the regulatory concerns associated with Zcash may in the future take actions that may have an adverse effect on our business or the market price of our listed securities.

For example, it is possible that a financial institution could restrict customers from buying our securities if it were to determine that the value of our securities is closely tied to the performance of ZEC, signaling a reluctance to facilitate exposure to virtual currencies.

Absent federal regulations, there is a possibility that ZEC may be classified as a “security.” Any classification of ZEC as a “security” could lead to our falling under the definition of “investment company” under the Investment Act of 1940, as amended, and would subject us to additional regulation and could materially impact the operation of our business.

Neither the SEC nor any other U.S.

federal or state regulator has publicly stated whether they believe that ZEC 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,” ZEC has not yet been classified with respect to U.S.

federal securities laws.

Because ZEC heavily resembles bitcoin, we believe that the analysis and statements from the SEC and CFTC that have stated that bitcoin is not a security apply to ZEC.

Therefore, while we believe that ZEC 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 ZEC is a “security” which would require us to register as an investment company under the Investment Company Act.

ZEC 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.

Regulatory change reclassifying ZEC as a security could lead to our falling within the definition of “investment company” under the Investment Company Act and could adversely affect the market price of ZEC and the market price of our common stock.

Under Sections 3(a)(1)(A) and (C) of the Investment Company Act, a company generally will be deemed to be an “investment company” for purposes of the Investment Company Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S.

government securities and cash items) on an unconsolidated basis.

While the SEC has not stated a view as to whether ZEC is or is not a “security” for purposes of the federal securities laws, a determination by the SEC or a court of competent jurisdiction that ZEC is a security could lead to our meeting the definition of “investment company” under the Investment Company Act, if the portion of our assets that consists of investments in ZEC exceeds the 40% limit prescribed in the Investment Company Act, which would subject us to significant additional regulatory requirements that could have a material adverse effect on our business and operations and may also require us to change the manner in which we conduct our business.

We intend to monitor our assets and income in order to conduct our business activities in a manner such that we do not fall within the definition of “investment company” under the Investment Company Act or would qualify under one of the exemptions or exclusions provided by the Investment Company Act and corresponding SEC rules.

If ZEC is determined to be a security for purposes of the federal securities laws, we would evaluate taking steps to reduce our holdings of ZEC as a percentage of our total assets.

These steps may include, among others, selling ZEC that we might otherwise hold for the long term and deploying our cash in assets that are not considered to be investment securities under the Investment Company Act, in which case we may be forced to sell our ZEC at unattractive prices.

We may also seek to acquire additional assets that are not considered to be investment securities under the Investment Company Act and we may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise attractive to our business.

Any of these actions could have a material adverse effect on our results of operations and financial condition.

Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid meeting the definition of “investment company” under the Investment Company Act and becoming subject to its requirements.

If ZEC is determined to constitute a security for purposes of the federal securities laws and if we are not able to come within an available exemption or exclusion under the Investment Company Act, then we would have to register as an investment company and require us to change the manner in which we conduct our business.

In addition, such a determination could adversely affect the market price of ZEC and in turn adversely affect the market price of our common stock, or subject us to risk of enforcement proceedings and lawsuits, 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.

We may be deemed to be a “commodity pool” under CEA and CFTC Rules as a result of our commodity interest trading, which could have a material adverse effect on our business, financial condition and results of operations.

The CEA and CFTC Rules define a “commodity pool” as any investment trust, syndicate, or similar form of enterprise operated for the purpose of trading in “commodity interests,” such as swaps, futures and options on an underlying commodity (including any digital asset that constitutes a commodity).

The CFTC has previously interpreted “for the purpose of trading” as being triggered where only one swap is executed.

The legal and regulatory landscape of CFTC commodity pool regulation is currently unclear as applied to digital asset treasury companies.

Accordingly, (i) no person is registered with the CFTC as a commodity pool operator (“CPO”) or a commodity trading adviser (“CTA”) with respect to our company and (ii) our stockholders will not have the regulatory protections provided to investors in a commodity pool operated or advised by a registered CPO or CTA, as applicable.

If our company were determined to be a “commodity pool,” including as a result of any future change in legislation, regulation or interpretation, we may be subject to additional regulatory requirements which may be burdensome or costly or that could make it impractical or impossible for us to continue our business as currently contemplated.

For example, a commodity pool must generally be operated as a separately cognizable entity from its CPO and any person acting as a CPO or CTA with respect to a commodity pool must be registered with the CFTC and as a member of the National Futures Association (the “NFA”).

Absent an applicable exemption, a registered CPO or CTA must generally provide investors with a “disclosure document” in compliance with the CFTC Rules and the requirements of the NFA, and must comply with a range of ongoing reporting and recordkeeping requirements on registered and certain exempt commodity pool operators.

Registration can be time-consuming, expensive and restrictive, and compliance with these additional regulatory requirements could result in substantial, non-recurring expenses, adversely affecting an investment in our securities.

If we determine not to comply with such regulations, we may be forced to cease or modify certain of our operations, which could negatively impact our investors.

We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and ETPs, or to obligations applicable to investment advisers.

Mutual funds, ETPs 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 do not currently comply with and do not intend to voluntarily comply with these laws and regulations.

Consequently, our stockholders do not have the regulatory protections provided to stockholders in registered and regulated investment companies, which, for example, require investment companies to have a certain percentage of disinterested directors and regulate the relationship between the investment company and certain of its affiliates.

This means, among other things, that the execution of or changes to our ZEC treasury strategy, our use of leverage, the manner in which our ZEC 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.

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

Changes in regulatory interpretations could require us to register as a money services business or money transmitter, leading to increased compliance costs or operational shutdowns.

The regulatory regime for digital assets in the U.S.

and elsewhere is uncertain.

We may be unable to effectively react to proposed legislation and regulation of digital assets, which could adversely affect our business.

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 ZEC.

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.

If regulatory changes or interpretations require us to register as a money services business with FinCEN under the U.S.

Bank Secrecy Act, or as a money transmitter under state laws, we may be subject to extensive regulatory requirements, resulting in significant compliance costs and operational burdens.

In such a case, we may incur extraordinary expenses to meet these requirements or, alternatively, may determine that continued operations are not viable.

If we decide to cease certain operations in response to new regulatory obligations, such actions could occur at a time that is unfavorable to investors.

Multiple states have implemented or proposed regulatory frameworks for digital asset businesses.

Compliance with such state-specific regulations may increase costs or impact our business operations.

Further, if we or our service providers are unable to comply with evolving federal or state regulations, we may be forced to dissolve or liquidate certain operations, which could materially impact our investors.

The availability of spot ETPs for digital assets may adversely affect the demand for our common stock, which could result in a decrease in the market price of our listed securities.

Although Bitcoin and other digital assets such as ZEC have experienced a surge of investor attention since Bitcoin was invented in 2008, until recently investors in the United States had limited means to gain direct exposure to digital assets through traditional investment channels, and instead generally were only able to hold digital assets 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 digital assets directly, as well as the potential reluctance of financial planners and advisers to recommend direct digital asset holdings to their retail customers because of the manner in which such holdings are custodied, some investors have sought exposure to digital assets through investment vehicles that issue shares representing fractional undivided interests in their underlying digital asset holdings.

On January 10, 2024, the SEC approved the listing and trading of spot Bitcoin ETPs, the shares of which can be sold in public offerings and are traded on U.S.

national securities exchanges.

The SEC has also approved spot ETPs for Ethereum and other digital assets.

The listing and trading of spot ETPs for digital assets offers investors another alternative to gain exposure to digital assets, which could result in a decline in the price of our listed securities relative to the value of our digital assets.

Although we are an operating company, and we believe we offer a different value proposition than an investment vehicle such as a spot digital asset ETP, investors may nevertheless view our securities as an alternative to an investment in an ETP, and choose to purchase shares of an ETP instead of our securities.

They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to digital assets that is generally not subject to federal income tax at the entity level as we are, or the other risk factors applicable to an operating business, such as ours.

Additionally, unlike spot digital asset ETPs, we (i) do not seek for our common stock to track the value of the underlying digital assets we hold before payment of expenses and liabilities, (ii) may not benefit from various exemptions and relief under the Securities Exchange Act of 1934, as amended, 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 a Delaware corporation rather than a statutory trust, 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 digital asset holdings or our net asset value.

Based on how we are viewed in the market relative to ETPs, and other vehicles which offer economic exposure to digital assets, such as futures ETPs, leveraged futures ETPs and similar vehicles offered on international exchanges, any premium or discount in our common stock relative to the value of our digital asset holdings may increase or decrease in different market conditions.

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

Although we currently are not considered to be a “controlled company” under Nasdaq corporate governance rules, we may in the future become a controlled company due to the concentration of voting power among Winklevoss Capital and their affiliates.

A “controlled company” pursuant to the Nasdaq corporate governance rules is a company of which more than 50% of the voting power is held by an individual, group, or another company.

Winklevoss Capital beneficially owns 19.9% of our outstanding shares of common stock, which excludes an additional 71,647,916 shares of Common Stock issuable upon exercise of Pre-Funded Warrants and 57,182,378 shares of Common Stock issuable upon exercise of the Common Warrants.

Although we currently are not considered to be a “controlled company” under the Nasdaq corporate governance rules, we may in the future become a controlled company if such shares are issued.

In the event that Winklevoss Capital acquires more than 50% of the voting power of the Company, we may in the future be able to rely on the “controlled company” exemptions under the Nasdaq corporate governance rules due to this concentration of voting power and the ability of Winklevoss Capital and its affiliates to act as a group.

If we were a controlled company, we would be eligible, and could elect, not to comply with certain of the Nasdaq corporate governance standards.

Such standards include the requirement that a majority of our directors are independent directors, subject to certain phase-in periods, and the requirement that our compensation, nominating and governance committee consist entirely of independent directors.

In such a case, if the interests of our stockholders differ from Winklevoss Capital, including as a result of Winklevoss Capital’s affiliation with Gemini, our stockholders would not have the same protection afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance standards, and the ability of our independent directors to influence our business policies and corporate matters may be reduced.

Risks Related to Leap

We have a history of losses, have no source of product revenue, and may never become profitable.

Investment in the biotechnology research and development business conducted by Leap is highly speculative because it entails substantial upfront capital expenditures and significant risk that our lead product candidate, sirexatamab, or any other products will fail to gain regulatory approval or become commercially viable.

We do not currently have any products approved by regulatory authorities for marketing and have not generated any revenue from product sales.

We have incurred significant research, development and other expenses related to our ongoing operations.

As a result, we have not been profitable to date and have incurred losses in every reporting period since our inception in 2011.

For the year ended December 31, 2024, we reported a net loss of $67.6 million and had an accumulated deficit of $467.4 million at December 31, 2024.

We expect to continue to incur significant expenses and operating losses for the foreseeable future.

We anticipate these losses to increase as we continue the research and development of and seek regulatory approvals for sirexatamab and FL-501.

We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues.

If sirexatamab fails in clinical trials or does not gain regulatory approval, or if approved, fails to achieve market acceptance, we may never become profitable.

Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

We currently have no source of product revenue and may never become profitable.

We have not generated any product revenues, and we have no commercial products.

Our ability to generate revenue from product sales and achieve profitability will depend upon our ability to successfully gain regulatory approval and commercialize sirexatamab, FL-501, or other product candidates that we may in-license or acquire in the future.

Our ability to generate revenue from product sales and achieve profitability with respect to our biotechnology research and development operations conducted by Leap will depend upon our ability to successfully gain regulatory approval and commercialize sirexatamab, FL-501, or other product candidates that we may in-license or acquire in the future.

Even if we are able to successfully achieve regulatory approval, we do not know when we will generate revenue from product sales, if at all.

11 unchanged sentences

Our operations have consumed substantial amounts of cash since inception.

We expect to continue to spend substantial amounts to advance the development of sirexatamab and FL-501 and launch and commercialize our product candidates, if we receive regulatory approval.

We will need to spend substantial amounts to advance the development of sirexatamab and FL-501 and launch and commercialize our product candidates, if we receive regulatory approval.

We will require additional capital for further development and potential commercialization.

If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

We believe that our cash and cash equivalents will enable us to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months from the date of this filing.

We have based this estimate on assumptions that may prove to be wrong, and we could deploy our available capital resources sooner than we currently expect.

Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to the:

● initiation, progress, timing, costs and results of pre-clinical studies and clinical trials for our product candidates;

● costs and timing of additional clinical trial and commercial manufacturing activities;

● clinical development plans we establish for sirexatamab, FL-501 and any other future product candidates;

● number and characteristics of any new product candidates that we in-license and develop;

● outcome, timing and cost of regulatory review by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect;

● costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property rights;

● effect of competing product candidates and market developments;

● costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval.

If we are unable to fund our operations or otherwise capitalize on our business opportunities due to a lack of capital, our business, operations and financial condition will be materially adversely affected, and we could be forced to significantly limit or reduce the scope of our business, operations and activities, or to sell ourselves or engage in some other strategic transaction at an unfavorable price and on other unfavorable terms, or to discontinue our business and operations entirely, wind-up and liquidate.

If we are unable to raise capital when needed or on attractive terms, we could be forced to reduce or eliminate our research and development programs.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates.

Until we can generate substantial revenue from product sales, if ever, we expect to seek additional capital through a combination of private and public equity offerings, debt financings, strategic collaborations and alliances, licensing arrangements, and mergers with other companies.

Until Leap can generate substantial revenue from product sales, if ever, Leap expects to seek additional capital through a combination of private and public equity offerings, debt financings, strategic collaborations and alliances, licensing arrangements, and mergers with other companies.

To the extent that we raise additional capital through the sale or issuance of equity or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of existing stockholders.

If we are unable to raise additional funds through equity or debt financing when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts, or to grant rights to develop and market our product candidates that we would otherwise prefer to develop and market ourselves, or to sell ourselves or engage in some other strategic transaction at an unfavorable price and on other unfavorable terms, or to discontinue our business and operations entirely, wind-up and liquidate.

If we are unable to raise additional funds through equity or debt financing when needed, we may be required to terminate our product development efforts, or to grant rights to develop and market our product candidates that we would otherwise prefer to develop and market ourselves, or to sell ourselves or engage in some other strategic transaction at an unfavorable price and on other unfavorable terms, or to discontinue our drug development business and operations entirely.

If we raise additional funds through strategic collaborations and alliances, licensing arrangements, or mergers with third parties, we may have to relinquish valuable rights to our product candidates in particular countries, or grant licenses on terms that are not favorable to us.

Risks Related to Our Business and Industry

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.

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The results of preclinical studies, preliminary study results, and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials or the ultimately completed trials.

For instance, while we have early clinical trial results for our clinical studies of sirexatamab, additional clinical trials are still ongoing and will be needed for the registration of sirexatamab.

Moreover, these results may not be representative of the ultimate global study population.

The ultimate study results of our ongoing or future trials may be different than the ones we have seen to date.

Additionally, the clinical trials conducted to date were relatively small, open-label, uncontrolled studies.

Preliminary and final results from such studies may not be representative of study results that are found in larger, controlled, blinded, and longer-term studies.

For instance, while we have early clinical trial results for our clinical studies of sirexatamab, additional clinical trials will be needed for the registration of sirexatamab.

The ultimate study results of our future trials may be different than the ones we have seen to date.

Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials.

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Further, because we currently plan to develop our product candidates for use in combination with other oncology products, the design, implementation, and interpretation of the clinical trials necessary for marketing approval may be more complex than if we were developing our product candidates alone.

We may also experience numerous unforeseen events during, or as a result of, clinical trials that could delay or adversely affect our existing or future development programs, including:

● we may have delays in identifying and adding new investigators or clinical trial sites, we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and our third - party clinical research organizations ( “ CROs ” ) or we may experience a withdrawal of clinical trial sites;

● the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment may be slower than we anticipate or participants may drop out at a higher rate than we anticipate;

● clinical trials of our product candidates may produce negative or inconclusive results, or our studies may fail to reach the necessary level of statistical significance, and we may decide to conduct additional clinical trials or abandon product development programs;

● we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development;

● the cost of clinical trials of our product candidates may be greater than we anticipate or we may have insufficient funds for a clinical trial;

● the supply or quality of the clinical trial material of our product candidates may be insufficient or inadequate to conduct clinical trials;

● there may be changes to the therapies which we are administering in combination with our product candidates or changes to standards of care, which require that we change our study design, or otherwise halt, discontinue or delay our clinical studies.

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable , especially for an early-stage company such as ours.

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we may not be able to commercialize our product candidates as expected, and our ability to generate revenue could be materially impaired.

Because we are at the early stages of the clinical and regulatory development of our product candidates, the time required to obtain approval for them from the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of such regulatory authorities.

The time required to obtain approval for a new therapeutic from the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of such regulatory authorities.

In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

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Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities and clinical trial sites by, the relevant regulatory authorities.

We may also experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:

● regulators or IRBs may not authorize us or our investigators to commence a clinical trial or to conduct a clinical trial at a prospective trial site, we may fail to reach an agreement with regulators or IRBs regarding the scope, design, or

implementation of our clinical trials or regulators or IRBs may require that we modify or amend our clinical trial protocols;

● our third-party contractors may fail to comply with regulatory requirements, standard operating procedures or clinical trial protocols, or fail to meet their contractual obligations to us in a timely manner, or at all, or we may be required to engage in additional clinical trial site monitoring or manufacturing activities;

● we, relevant regulators, or IRBs may require the suspension or termination of clinical research for various reasons, including noncompliance with regulatory requirements or a finding that participants are being exposed to unacceptable health risks, undesirable side effects, or other unexpected characteristics of a product candidate, or due to findings of undesirable effects caused by a chemically or mechanistically similar therapeutic or therapeutic candidate;

● changes in or the enactment of additional statutes or regulations;

● there may be changes in marketing approval or regulatory review policies during the development period rendering our data insufficient to obtain marketing approval;

● we may decide, or regulators may require us, to conduct additional clinical trials, analyses, reports, data, or preclinical trials, or we may abandon product development programs;

● there may be regulatory questions or disagreements regarding interpretations of data and results, or new information may emerge regarding our product candidates, the FDA or comparable foreign regulatory authorities may disagree with our study design or our interpretation of data from preclinical studies and clinical trials or find that a product candidate’s benefits do not outweigh its safety risks;

● the FDA or comparable foreign regulatory authorities may disagree with our intended indications;

● the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with our manufacturing processes or our manufacturing facilities for clinical and future commercial supplies;

● the data collected from clinical trials of our product candidates or any additional product candidate may not be sufficient to cause the FDA or comparable foreign regulatory authorities to support the submission of a BLA, or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere;

● the FDA or comparable foreign regulatory authorities may take longer than we anticipate to make a decision on our product candidates.

Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application.

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It is possible that neither of our product candidates, sirexatamab and FL-501, nor any product candidates we may seek to develop in the future will ever obtain the appropriate regulatory approvals necessary for us or any future collaborators to commence product sales.

Finally, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications or uses than we request, may require significant safety warnings, including black box warnings, contraindications, and precautions, may grant approval contingent on the performance of costly post-marketing clinical trials, surveillance, or other requirements, including risk evaluation and mitigation strategies (“REMS”), to monitor the safety or efficacy of the product, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful

commercialization of that product candidate.

Any of these scenarios could compromise the commercial prospects for our product candidates.

If we experience delays in obtaining approval, if we fail to obtain approval of a product candidate or if the label for a product candidate does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate, the commercial prospects for such product candidate may be harmed and our ability to generate revenues from that product candidate could be materially impaired.

If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of clinical data and necessary regulatory approvals could be delayed or prevented.

We may not be able to initiate or continue conducting clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States.

Some of our competitors have ongoing clinical trials for product candidates that treat the same indications or use the same mechanism of action as our product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.

Patient enrollment is affected by other factors including:

● the size and nature of the patient population;

● the severity of the disease under investigation;

● the eligibility criteria for, and design of, the clinical trial in question, including factors such as frequency of required assessments, length of the study and ongoing monitoring requirements;

● the perceived risks and benefits of the product candidate under study, including the potential advantages or disadvantages of the product candidate being studied in relation to other available therapies;

● competition in recruiting and enrolling patients in clinical trials;

● the patient referral practices of physicians;

● patients ’ ability to comply with the specific instructions related to the trial protocol, proper documentation, and use of the biologic product;

● our inability to obtain or maintain patient informed consents;

● the risk that enrolled patients will drop out before completion or not return for post-treatment follow-up;

● the ability to monitor patients adequately during and after treatment;

● the proximity and availability of clinical trial sites for prospective patients.

Our inability to enroll and maintain a sufficient number of patients for our clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether.

Enrollment delays in our clinical trials may result in increased development costs for our product candidates, or our inability to complete the development of our product candidates, which could materially impair our ability to generate revenues, limit our ability to obtain necessary additional financing and cause the value of our company to decline.

Interim, “top-line” or preliminary data from studies or trials announced or published from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we publicly disclose “top-line” or preliminary data from preclinical studies and clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a

more comprehensive review of the data, the particular study, or trial.

We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to evaluate all data.

As a result, the “top-line” or preliminary data that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.

“Top-line” or preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.

As a result, “top-line” or preliminary data should be viewed with caution until the final data are available.

From time to time, we also disclose interim data from our preclinical studies and clinical trials.

Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

Adverse differences between interim data and final data could seriously harm our business.

Third parties, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure.

Any information we determine not to disclose may ultimately be deemed significant by you or others with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business.

If the “top-line” or preliminary data that we report differ from final results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, product candidates may be harmed, which could seriously harm our business.

The FDA may determine that any of our current or future product candidates have undesirable side effects that could delay or prevent their regulatory approval or commercialization.

Undesirable side effects caused by our product candidates could cause us, IRBs, and other reviewing entities or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities.

For example, if concerns are raised regarding the safety of a new therapeutic as a result of undesirable side effects identified during clinical or preclinical testing of a product candidate, the FDA may order us to cease further development, decline to approve that product candidate or issue a letter requesting additional data or information prior to making a final decision regarding whether or not to approve it.

FDA requests for additional data or information can result in substantial delays in the approval of a new biologic.

If any of our product candidates is associated with serious adverse events or undesirable side effects or has properties that are unexpected, we may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk- benefit perspective.

The therapeutic -related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims.

Any of these occurrences may significantly harm our business, financial condition, results of operations, and prospects.

Risks Related to the Development and Commercialization of Our Product Candidates

Our clinical development program was restructured following the results of the data received for our gastric cancer program, and we cannot guarantee that our redirected focus on colorectal cancer and FL-501 will be successful.

On January 28, 2025, we announced results from our DisTinGuish Part C study evaluating sirexatamab (DKN-01) in combination with tislelizumab and chemotherapy in first-line patients with advanced gastroesophageal junction and gastric cancer.

While the study demonstrated activity in certain biomarker populations, it did not generate a clear positive signal and was negative on the primary progression-free survival endpoints.

As a result, we decided not to pursue the development of the program into Phase 3 studies for gastric cancer.

We have redirected our development focus and resources primarily toward our colorectal cancer program based on the data from the DeFianCe study, and we are continuing the preclinical development of FL-501, our humanized monoclonal antibody targeting the

growth and differentiation factor 15 (GDF-15) protein.

This strategic realignment represents a significant change in our clinical development pipeline and priorities.

There can be no assurance that our colorectal cancer program will show positive results as the data matures or in future clinical trials.

Similarly, we cannot guarantee that our preclinical FL-501 program will advance successfully through development.

If our redirected focus on these programs does not yield positive results, our business, financial condition, and prospects could be materially and adversely affected.

The therapeutic safety and efficacy of sirexatamab is unproven, and we may not be able to successfully develop and commercialize any of our products.

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As a result of these and other risks described herein that are inherent in the development of novel therapeutic agents, we may never successfully develop, enter into or maintain third party licensing or collaboration transactions with respect to, or successfully commercialize sirexatamab, in which case we will not achieve profitability and the value of our stock may materially decline.

Our future success is heavily dependent on the success of sirexatamab.

We do not have any products that have gained regulatory approval.

Currently, our most advanced clinical-stage product candidate is sirexatamab, and it is currently in its Phase II randomized, controlled clinical trials.

As a result, our business is substantially dependent on our ability to successfully develop, form strategic partnerships for, obtain regulatory approval for, and, if approved, to successfully commercialize sirexatamab.

We must demonstrate, with substantial evidence gathered in preclinical studies and well-controlled clinical trials, that the product is safe and effective for use for that target indication and that the manufacturing facilities, processes and controls are adequate.

Even if sirexatamab were to successfully obtain approval from the FDA and comparable foreign regulatory authorities, any approval might contain significant limitations, such as use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements.

If we are unable to obtain regulatory approval in one or more jurisdictions, or any approval contains significant limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of any other product candidate that we may discover, in-license, develop or acquire in the future.

If we are unable to successfully develop or commercialize our products, we may not be able to earn sufficient revenues or generate sufficient funding to continue our business.

We face substantial competition from much larger competitors, which may result in others discovering, developing or commercializing products before, or more successfully than, we do.

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Due to the significant resources required for the development of our product candidates, we must decide which product candidates to pursue and advance and the resources to allocate to each.

Our decisions concerning the allocation of research, development, collaboration, management, and financial resources toward particular product candidates may not lead to the development of any viable commercial

product and may divert resources away from better opportunities.

As a result of these factors, our competitors may obtain regulatory approval of their products before we are able to, which may limit our ability to develop or commercialize sirexatamab and FL-501.

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We may acquire other assets, form collaborations or make investments in other companies or technologies, that could harm our operating results, dilute our stockholders’ ownership, or cause us to incur significant expense.

As part of our business strategy, we intend to pursue acquisitions of assets, including preclinical or clinical stage product candidates, or enter into strategic alliances and collaborations to expand our existing programs and operations, such as we did with the merger with Flame Biosciences.

As part of our business strategy for Leap, we intend to pursue acquisitions of assets, including preclinical or clinical stage product candidates, or enter into strategic alliances and collaborations to expand our existing programs and operations, such as we did with the merger with Flame Biosciences.

We may not realize the anticipated benefits of any such transaction, any of which could have a detrimental effect on our financial condition, results of operations and cash flows.

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Additional funds may not be available on terms that are favorable to us, or at all.

Risks Related to Our Dependence on Third Parties

We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials.

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If our CMOs were to encounter any of these difficulties, our ability to provide product candidates to patients in our clinical trials and for commercial use, if approved, could be jeopardized.

Reliance on third-party CMOs entails exposure to risks to which we would not be subject if we manufactured the product candidate ourselves, including:

● reduced day-to-day control over the manufacturing process for our product candidates as a result of using third-party CMOs for all aspects of manufacturing activities;

● reduced control over the protection of our trade secrets and know-how from misappropriation or inadvertent disclosure;

● termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that may be costly or damaging to us or result in delays in the development or commercialization of our product candidates;

● disruptions to the operations of our third-party CMOs caused by conditions unrelated to our business or operations, which could result in disruptions in the development or commercialization of our product candidates.

Reliance on third-party CMOs entails exposure to risks to which we would not be subject if we manufactured the product candidate ourselves.

In addition, all CMOs of our product candidates and therapeutic substances must comply with cGMP requirements enforced by the FDA that are applicable to both finished products and their active components used both for clinical and commercial supply, through its facilities inspection program.

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Any performance failure on the part of our distributors could delay clinical development of our product candidates, which could produce additional losses.

We depend on information technology and a failure of, or significant disruption to, those systems could have a material adverse effect on our business and operations.

We are increasingly dependent on our information technology systems and infrastructure for our business, which are inherently vulnerable to malicious intrusion, random attack, loss of data privacy, disruption, degradation or breakdown.

Data privacy or security breaches of our internal systems or those of our information technology vendors may in the future result in the failure of critical business operations.

Such breaches may cause sensitive data to be exposed to unauthorized persons or to the public.

To date, neither our business nor our operations have been materially impacted by such incidents.

Cybersecurity attacks and incidents are increasing in their frequency, sophistication and intensity and, due to the nature of some of these attacks, there is a risk that they may remain undetected for a period of time.

Our investments in the protection of our data and information technology and our efforts to monitor our systems on an ongoing basis may be insufficient to prevent compromises in our information technology systems that could have a material adverse effect on our business.

Such adverse consequences could include the loss of critical or sensitive information from us or our third - party providers’ databases or information technology systems and could also result in legal, financial, reputational or business harm to us and potentially substantial remediation costs.

In addition, our cyber insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems or those of our third - party vendors.

Risks Related to Legal and Compliance Matters

If we fail to comply with federal and state healthcare laws, including fraud and abuse and health and other information privacy and security laws, we could face substantial penalties and our business, financial condition, results of operations, and prospects could be adversely affected.

As a biopharmaceutical company, we are subject to many federal and state healthcare laws in the United States and healthcare and data protection laws around the world.

If we or our operations are found to be in violation of any federal or state healthcare law, global general data protection laws, or any other governmental regulations that apply to us, we may be subject to penalties, including civil, criminal, or administrative penalties, damages, fines, disgorgement, debarment from government contracts and/or refusal of orders under existing contracts, exclusion from participation in U.S.

federal or state health care programs, corporate integrity agreements, or the curtailment or restructuring of our operations, any of which could materially adversely affect our ability to operate our business and our financial results.

If any of the physicians or other healthcare providers or entities with whom we expect to do business, including our collaborators, is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including but not limited to, exclusions from participation in government healthcare programs, which could also materially adversely affect our business.

Although an effective compliance program can mitigate the risks of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated.

Moreover, achieving and sustaining compliance with applicable privacy, security, and fraud laws may prove to be costly.

Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

Risks Related to Our Intellectual Property

If we are unable to protect our intellectual property rights or if our intellectual property rights are inadequate to protect our technology and product candidates, our competitive position could be harmed.

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Other competing companies may have therapeutic antibodies to the same target as our product candidates, but have a different amino acid sequence and, as a result, may not be determined to infringe our patents which are limited by amino acid sequence(s).

Even for those patents which are defined by the target

of a therapeutic antibody and not limited by an amino acid sequence, we cannot be certain that we will be able to successfully enforce those patents against our competitors with antibodies to these targets.

Even for those patents which are defined by the target of a therapeutic antibody and not limited by an amino acid sequence, we cannot be certain that we will be able to successfully enforce those patents against our competitors with antibodies to these targets.

Our pending applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications.

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The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

● public perception and market reaction to companies with a digital asset treasury strategy;

● the price of ZEC and issues related to Zcash developers, users, infrastructure, service providers, and ecosystem;

● the results of clinical trials or development activities of our programs, or any future programs we may acquire;

● public perception and market reaction to our interim data from clinical trials;

● actual or anticipated fluctuations in our financial condition and operating results;

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In the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock.

If in the future any of our stockholders brought a lawsuit against us, we could incur significant legal expenses, settlement costs or damage awards that are not covered by, or exceed the

limits of, our available directors’ and officers’ liability insurance, which could adversely impact our financial condition, results of operations or cash flows.

If in the future any of our stockholders brought a lawsuit against us, we could incur significant legal expenses, settlement costs or damage awards that are not covered by, or exceed the limits of, our available directors’ and officers’ liability insurance, which could adversely impact our financial condition, results of operations or cash flows.

Such a lawsuit could also divert the time and attention of our management.

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If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.

Our business is subject to changing regulations for corporate governance and public disclosure that has increased both our costs and the risk of noncompliance.

If we fail to maintain an effective system of disclosure controls and internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected.

Each year we are required to evaluate our internal controls systems in order to allow management to report on our internal controls as required by Section 404 of the Sarbanes-Oxley Act.

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We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

If we are not able to comply with the requirements of Section 404, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, which would require additional financial and management resources.

During the preparation of our financial statements for the quarter and fiscal year ended December 31, 2025, we identified a material weakness in internal control over financial reporting in connection with our accounting for certain complex and unusual transactions, as further described under Part II, Item 9A.

of this Annual Report.

If we are not able to comply with the requirements of Section 404, if we are not able to adequately remediate the previously identified material weakness, or if we or our independent registered public accounting firm identify additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, which would require additional financial and management resources.

Sales of a substantial number of shares of our common stock in the public market by our stockholders could cause our stock price to fall.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.

We are unable to predict the effect that sales may have on the prevailing market price of our common stock.

In October 2025, we completed the private placement of:

(i) 15,212,311 shares of common stock, (ii) pre-funded warrants to purchase up to an aggregate of 80,768,504 shares of common stock and (iii) common warrants to purchase up to an aggregate of 71,985,605 shares of common stock.

During the fourth quarter of 2025, we sold an additional 27,151,211 shares of common stock pursuant to our ATM program (as described herein).

Future sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our

ability to raise capital through the sale of additional equity securities.

We are unable to predict the effect that future sales may have on the prevailing market price of our common stock.

Substantial sales of common stock by our stockholders could have a material adverse effect on the trading price of our common stock.

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On March 4, 2026, we received a letter from Nasdaq stating that the we were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Closing Bid Price Rule”) because our common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days.

This letter provides an initial 180 calendar day period, or until September 8, 2025, in which to regain compliance.

We may request stockholder approval to undergo a reverse stock split in order to regain compliance with the $1.00 closing bid price requirement.

If we do not regain compliance by September 8, 2025, we may be eligible for an additional 180-day grace period.

If we fail to regain and maintain compliance with the Closing Bid Price Rule or we fail to continue to meet all other applicable continued listing requirements for The Nasdaq Stock Market, our common stock may be delisted, which would adversely affect the market liquidity of our common stock and our ability to obtain financing to fund our operations.

This letter provides an initial 180 calendar day period, or until August 31, 2026, in which to regain compliance.

If we do not regain compliance by August 31, 2026, we may be eligible for an additional 180-day grace period.

We will continue to monitor the closing bid price of our common stock and intend to continue to take definitive steps in an effort to evidence compliance with the Closing Bid Price Rule, including by implementing a reverse stock split, if necessary.

Our stockholders previously adopted a Charter amendment that permits our Board, in its discretion, to effect a reverse stock split of our common stock in a ratio to be determined, within a range of 1 to 5 (1:5) up to 1 to 20 (1:20), in order to regain compliance with Nasdaq’s $1.00 closing bid price requirement.

The Board may choose whether or not to effect a reverse stock split at any time prior to December 15, 2026, without further stockholder approval.

If we were to implement a reverse stock split to facilitate compliance with the Closing Bid Price Rule and maintenance of our Nasdaq listing, the announcement and implementation of the reverse stock split could negatively affect the price of our common stock.

We cannot assure you that the prices for shares of the common stock after a reverse stock split would increase proportionately to prices for shares of our common stock immediately before a reverse stock split.

Furthermore, even if the market price of our common stock did rise following a reverse stock split, we cannot assure you that the market price of our common stock immediately after a reverse stock split would be maintained for any period of time, or that we may not again be subject to delisting for failure to meet the $1.00 closing bid price requirement.

There is also the possibility that liquidity may be adversely affected by the reduced number of shares which would be issued and outstanding when a reverse stock split is effected, particularly if the price per share of our common stock were to begin a declining trend after the reverse stock split is effected.

Accordingly, our total market capitalization after a reverse stock split may be lower than the market capitalization before such reverse stock split.

If we do not regain compliance with the Closing Bid Price Rule or we fail to continue to meet all other applicable continued listing requirements for The Nasdaq Stock Market, our common stock may be delisted, which would adversely affect the market liquidity of our common stock and our ability to obtain financing to fund our operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors