Exodus Movement, Inc. 10-K

Item 1A. Risk Factors Investing in or maintaining your investment in our common stock involves risk. You should carefully consider each of the risks and uncertainties set forth below as well as the other information contained in this report before deciding to invest in our securities. The following summarizes management’s beliefs and opinions as to the material factors that could make an investment in our common stock risky or speculative. We have grouped our Risk Factors under captions that we believe describe various categories of potential risk. For the reader’s convenience, we have not duplicated risk factors that could be included in more than one category. These risk factors do not describe all of the risks that we face, as we could also be impacted by factors that we currently consider to be immaterial, that are not presently known to us, or that are generally applicable to most companies. Any of the following risks and uncertainties could materially and adversely affect our business, financial condition, results of operations, liquidity and/or cash flows and the impact could lead to a decline in the trading price of our common stock or be compounded if multiple risks were to occur. Some of the factors, events and 21 Table of contents contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future. S ummary of Risk Factors Risks Related to Our Business • Our profitability is dependent on our ability to attract, maintain and grow our user base, as well as maintaining our brand or reputation. We may not grow in line with historical rates. • Our success depends on the success of our third-party service providers, and disruptions in our agreements with these providers may adversely affect our business, results of operations and financial condition. • In the event of errors, misconduct, negligence, or failures by our management team, our employees or contractors, or third-party service providers, our business may be adversely impacted. • Our business could be negatively impacted by cybersecurity threats and other disruptions. • The third-party platforms on which users swap digital assets may be unregulated or may not be in compliance, and, therefore, may be more exposed to fraud and security breaches than established, regulated exchanges. • Operational problems or failures by digital asset-related businesses and fluctuations in digital asset prices may reduce confidence in these venues or in digital assets generally. • Digital asset exchanges may be exposed to front-running, wash trading or other manipulative practices. • Sending and receiving digital assets from a user’s Exodus wallet involve risks, which could result in loss of a user’s assets, which are not insured. We could thus be adversely affected if users blame the Exodus Platform. • If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any of our digital assets, it could cause regulatory scrutiny, reputational harm and financial losses. • Some of our technology incorporates or utilizes software released under the terms of “open source” licenses, which could subject us to possible litigation and be used by competitors. • Disputes with our users and third parties could be costly, time-consuming and harm our business and reputation. • We face intense and increasing competition, and may not be able keep pace with technological developments that are attractive to our current and prospective users, which could adversely affect us. • If we fail to manage our growth, it could harm our business operations, corporate culture, and competitiveness. • We may be unable to raise additional capital needed to grow our business. • We periodically pursue strategic transactions, which could be difficult to identify and implement, and could disrupt our business or change our business profile significantly. • Our holdings of digital assets, including the markets for Bitcoin, Tether, Ether and USDC, could expose us to exchange, security, valuation and liquidity risks, which could negatively affect us. • Staking poses risks to our users’ assets which, in turn, may damage our brand and reputation, discourage existing and future customers from utilizing Everstake’s services, and adversely impact our staking revenue. • Our platform or our API Providers’ platforms may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams, which could adversely affect our business. • Our users may be exposed to an API Provider experiencing insolvency or bankruptcy, which could adversely impact our business, operating results, and financial condition. • We do not conduct diligence with respect to the exchanges, market makers and other third parties our API Providers may contract with to conduct the services they provide to our users. • Our success depends on our ability to attract and retain key technical, user support and management personnel while supporting the onboarding and career development of our team members. • If we are required to reclassify independent contractors as employees, we may incur additional costs and taxes which could adversely affect us. • Our international operations expose us to additional risks and failure to manage those risks could materially and adversely impact our business. 22 Table of contents • Operational cost may exceed the award for solving blocks or transaction fees. Increased transaction fees may adversely affect the usage of the Bitcoin network. • Our business could be adversely impacted by the decision of foreign governments, internet service providers or others to block transmission from IP addresses on which our platform depends. • We are subject to changes in tax laws, treaties or regulations in various jurisdictions. • We may spend significant resources deploying new products, which may fail to attract widespread adoption and adversely affect our business, and may incorporate AI technologies into some of our products or processes. These technologies may present business, compliance, and reputational risks. • Fluctuations in interest rates, and rapidly changing interest rate environments could reduce expected revenues and otherwise result in reduced profitability. Risks Related to Our Industry • Due to the unfamiliarity or negative publicity associated with digital assets, confidence or interest in digital asset platforms may decline which could adversely affect our business, results of operations and financial condition. • The new and rapidly evolving market for digital assets and services is subject to a high degree of uncertainty. • Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in digital asset-related activities. Risks Related to Regulation • We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors. • The regulatory regime governing stablecoins, blockchain technologies, digital assets and securities is uncertain and new regulations or policies may materially adversely affect the development of the Exodus Platform. • We have made legal determinations as to whether our business, products, or services are in scope of various U.S. and international laws and regulations, including whether certain digital assets traded using third-party services integrated within our platform or other programs could be viewed as “securities." We face potentially material legal, financial, and other risks to the extent a regulator disagrees with one or more of these determinations, including the possibility of being deemed as a broker-dealer, in which we would likely experience difficulty in complying with the broker-dealer financial responsibility rules. • Regardless of the revenue structure for digital asset staking offered through Everstake, we could be deemed a broker-dealer if the services that users can obtain related to these digital assets are deemed securities under U.S. federal securities law, and we would likely experience difficulty in complying with the broker-dealer financial responsibility rules. • Failure to comply with anti-corruption, privacy, export control, import, or sanctions laws could harm our business, limit international competitiveness, and expose us to liability. • The limited rights of legal recourse available expose us and our investors to the risk of loss of our digital assets. • We may plan to launch products in the future that require regulatory licenses for which we may fail to obtain or experience significant delays in obtaining. Risks Related to Ownership of Our Class A Common Stock • Our Class A common stock may be highly volatile, decline due to actual or perceived large sales, and may not maintain an active or stable trading market, potentially causing significant investor losses. • The dual class structure of our common stock, as well as provisions of our Certificate of Incorporation and our Bylaws, could deter or prevent a change in control. We are currently a “controlled company” and, as a result, qualify for and could rely on exemptions from certain corporate governance requirements. • We are not subject to the provisions of Section 21.606 of the Texas Business Organizations Code, which could negatively affect your investment. Risks Related to Ownership of Our Common Stock Tokens • The distributed ledger technology used by Securitize, the Transfer Agent, and SuperState, the co-transfer agent, is novel with respect to our Common Stock Tokens and has been subject to limited testing and usage. • The regulations governing tokenized securities in the United States are evolving and could introduce material costs of compliance. 23 Table of contents The foregoing factors should not be construed as exhaustive. This summary of risk factors should be read in conjunction with the more detailed risk factors below and the information provided elsewhere in this report, including “Item 1 – Business” and “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Risks Related t o Our Business Our profitability is dependent on our ability to attract, maintain and grow our user base. We may not grow in line with historical rates. The success of our business depends on our ability to attract and retain Exodus Platform users. To do so, we must demonstrate to potential and existing users that our platform offers significant advantages over those of our competitors. Market acceptance of the Exodus Platform is affected by a number of factors, many of which are beyond our control, including the timing of the release into the market of new products, features and functionality introduced by our competitors, the performance of third-party services offered through the Exodus Platform, user perceptions of the Exodus Platform’s security and reliability, acceptance and interest in digital assets and the growth or contraction of the market in which we compete. As the market for digital assets and related services continues to mature, we expect that an increased focus on user satisfaction will profoundly impact demand for the Exodus Platform. We believe that our users are increasingly looking for flexible and secure digital asset wallets that seamlessly integrate a range of applications and support a wide variety of digital assets, while streamlining the user experience and minimizing complexity. Despite past performance, if we are unable to meet this demand, or if the Exodus Platform otherwise fails to achieve widespread market acceptance, our business, results of operations, financial condition and growth prospects may be adversely affected. If we are not able to maintain our brand or reputation, our business and results of operations may be adversely affected. We believe that maintaining our reputation as a leading provider of a self-custodial digital asset wallet with superior user support is critical to our relationship with our existing users and our ability to attract new users. The successful promotion of our brand will depend on several factors, including our ability to maintain a record of security, performance and reliability; our ability to continue to develop and integrate high-quality products and features for our platform through API agreements; and our ability to successfully differentiate our platform from competitive products and services. Independent industry and financial analysts often provide reviews of our platform, as well as those of our competitors. Perception of our offerings in the marketplace may be significantly influenced by these expert reviews. If reviews of our platform are negative or less positive than those of our competitors our brand may be adversely affected. The performance and reputation of our third-party API Providers may also affect our brand and reputation, particularly if users do not have a positive experience with our API Providers. Further promotion of our brand may require us to make increased expenditures, and we anticipate that the expenditures will increase as our market becomes more competitive. Expenditures intended to maintain and enhance our brand may not be cost-effective or effective at all. If we do not successfully maintain and enhance our brand, we may experience reduced pricing power relative to our competitors, a decrease in existing users, failure to attract new users or an inability to expand offerings of new products to our existing users, all of which could materially and adversely affect our business, results of operations and financial condition. Our success depends on the success of our third-party service providers, and disruptions in our agreements with these providers may adversely affect our business, results of operations and financial condition. The success of third-party services on the Exodus Platform is affected by a number of factors, many of which are beyond our control, such as our ability to successfully integrate services into the Exodus Platform using third-party APIs, technological changes and developments, user preferences and technical support provided by the third party. Interruptions or delays in our cloud or internal infrastructure or third-party services and cybersecurity incidents such as attacks on our information systems by malicious actors could also affect our third-party services. There can be no assurance that these third-party services will continue to perform in a manner our users find adequate. In addition, if any of the agreements with our API Providers are terminated or suspended, whether due to a failure or breach of performance or otherwise, we could be forced to incur additional expenses in seeking replacements, may not be able to obtain replacements in a timely fashion, if at all, and such interruptions or discontinuations of service could interfere with our existing user relationships and make us less attractive to potential new users. Multiple terminations or suspensions in a short period of time could impair the functionality of the Exchange Aggregator, resulting in user dissatisfaction and revenue loss. Additionally, certain of our third-party API Providers deliver features and functionalities that, if no longer available to us, cannot be replaced easily or in a timely fashion, if at all. Users may attribute such interruptions or delays to 24 Table of contents the operations of our platform, leading to doubts about the efficiency or reliability of the Exodus Platform which could have an adverse effect on our reputation and financial condition. In the event of errors, misconduct, negligence, or failures by our management team, our employees or contractors, or third-party service providers, our business may be adversely impacted. Management, employee, contractor or third-party service provider misconduct or errors could subject us to legal liability, financial losses, and regulatory sanctions and could seriously harm our reputation and negatively affect our business. Such misconduct could include engaging in improper or unauthorized transactions or activities, insider trading and misappropriation of information, failing to supervise other employees, contractors or service providers, improperly using confidential information, as well as improper trading activity such as spoofing, layering, wash trading, manipulation and front-running. Additionally, our third-party service providers may misappropriate customer funds or digital assets. Third- party service provider errors may include mistakes in executing, recording, or processing transactions for users. The processes and procedures we have implemented and the training provided to our team members to reduce the likelihood of misconduct and error, and as well as the representations we require our third-party service providers to make to us regarding their processes and procedures, may not be successful. It is not always possible to deter misconduct, and the precautions we and our third-party service providers take to prevent and detect this activity may not be effective in all cases. If we were found to have not met our compliance and other obligations, we could be subject to regulatory sanctions, financial penalties, restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity and seriously damage our reputation. Our employees, contractors and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or result in financial liability. Further, allegations by regulatory or criminal authorities of improper trading activities could affect our brand and reputation. If our third-party service providers were found to have not met their regulatory oversight and compliance and other obligations or if our third-party service providers experience bankruptcy or insolvency, we could receive negative publicity and damage to our reputation that could adversely impact our business. Our business could be negatively impacted by cybersecurity threats and other disruptions. Our information systems, and those of the third parties on which we rely, are subject to growing risks associated with cybersecurity threats which may include attacks from malicious third parties, viruses, ransomware and other malicious software, computer hacking, human error or malfeasance, and social engineering (including phishing attacks). We, and our users, have experienced, and may continue to experience, efforts to gain unauthorized access to, or disrupt, our internal systems, networks and data. The cybersecurity threat landscape is rapidly evolving and has become increasingly sophisticated, and we may not be successful in preventing or mitigating cybersecurity threats that could have a material adverse effect on us despite our efforts to protect against them . If any of the foregoing events were to materialize, they could result in technical disruptions or errors, the loss of sensitive information, and unauthorized access to our internal systems, networks and data. Moreover, a delay in or failure to detect a cybersecurity incident, or the full extent of an incident, could exacerbate its effects. We may also be required to expend significant resources to investigate and remediate vulnerabilities or other identified risks, costs which may not fully be covered by insurance coverage or indemnified by other means. Any actual or perceived failure of the Exodus Platform to prevent technical failures, disruptions or errors, security incidents or other cybersecurity incidents could harm our reputation, affect the services we provide to our customers and users, cause the Exodus Platform to be perceived as insecure, underperforming or unreliable, impede our efforts to attract and retain users, impact our competitive position, or result in litigation or regulatory proceedings, fines, penalties or other liabilities. The third-party platforms on which users swap digital assets may be unregulated or subject to regulation in a relevant jurisdiction but may not be in compliance, and, therefore, may be more exposed to fraud and security breaches than established, regulated exchanges for other financial assets or instruments, which could have a negative impact on the performance of our business. Over the past several years, a number of digital asset trading platforms have been closed or faced issues due to fraud, failure, security breaches or governmental regulations. Particularly for operators outside of the United States, digital asset trading platforms are not regulated in ways similar to national securities exchanges and other highly regulated trading environments or, if subject to regulation in a relevant jurisdiction, may not be in compliance. As a result, capital requirements, clearing infrastructure and technical and operational security requirements may vary. The nature of the digital assets held at these platforms makes them appealing targets for hackers and a number of digital asset trading 25 Table of contents platforms have been victims of cybercrimes. It is possible that the customers of such digital asset trading platforms may not be compensated or made whole for the partial or complete losses of their account balances in such platforms. Negative perception, a lack of stability in the digital asset trading markets and the closure or temporary shutdown of these third-party platforms due to fraud, business failure, hackers or malware, or government regulation may reduce confidence in such platforms and result in greater volatility in the prices of digital assets. Operational problems or failures may reduce confidence in digital asset-related businesses, the Exodus Platform, or in digital assets generally. Digital asset platforms are relatively new, and many are unlicensed, may be subject to regulation in a relevant jurisdiction but may not be in compliance, are unregulated, or may operate without supervision by any governmental authorities, and do not provide the public with significant information regarding their management team, corporate practices, cybersecurity, and regulatory compliance. To the extent that unanticipated operational or trading problems or other failures, such as security or technical failures, arise on trading platforms or the Exodus Platform, customers, users and the general public may lose confidence or interest in digital asset platforms, including the Exodus Platform, which could have an adverse impact on our business and our customers’ perception of us, including decreased use of our platform and loss of customer demand for our products and services. Digital asset exchanges may be exposed to front-running, wash trading or other manipulative acts or practices. Digital asset exchanges may be susceptible to “front-running,” which refers to the process whereby someone uses technology or market advantage to obtain information about upcoming transactions. Front-running is a frequent activity on centralized as well as decentralized exchanges. By using bots functioning on a millisecond-scale timeframe, bad actors are able to take advantage of the forthcoming price movement and make economic gains at the cost of those who conducted these transactions. The objective of a front runner is to buy a chunk of tokens at a low price and later sell them at a higher price. Front-running happens via manipulations of gas prices or timestamps, also known as slow matching. Digital asset exchanges may be susceptible to wash trading, which occurs when offsetting trades are entered into for other than bona fide reasons, such as the desire to inflate reported trading volumes. Wash trading may be motivated by non-economic reasons, such as a desire for increased visibility on popular websites that monitor markets for digital assets so as to improve their attractiveness to investors who look for maximum liquidity, or it may be motivated by the ability to attract listing fees from token issuers who seek the most liquid and high-volume exchanges on which to list their digital assets. Results of wash trading may include unexpected obstacles to trade and erroneous investment decisions based on false information. In the United States, there have been allegations of wash trading even on regulated venues. Any actual or perceived false trading in the digital asset exchange market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of digital assets and/or negatively affect the market perception of digital assets. To the extent that front-running, wash trading or other manipulative acts or practices occur or appear to occur in digital asset exchanges, investors may develop negative perceptions about the price integrity of digital assets exchanges and the digital assets industry more broadly, which could adversely impact the price of digital assets. User actions to send and receive digital assets from a user’s Exodus wallet involve risks, which could result in loss of a user’s assets. We do not insure against potential losses, and we could be adversely affected if users blame or become dissatisfied with the Exodus Platform as a result of these negative experiences. Public and private digital asset “keys,” comprising an alphanumeric code, enable users to manage their digital assets on the blockchain. Our users are able to send digital assets by inputting a public blockchain address and an amount to transfer and are able to receive digital assets by providing the sending party with the users’ own public blockchain address. Our involvement in these transfers is generally limited to providing a visual interface to access the blockchain. We do not take possession of the user’s assets and have no access to the user’s public or private keys. A number of errors can occur in the process of a user depositing or withdrawing digital assets into or from their Exodus wallets, such as typos, mistakes, or the failure to include the information required by the respective blockchain network. For instance, a user may incorrectly enter the desired recipient’s public key when withdrawing from our platforms or transfer digital assets to a wallet address that the user does not own, control, or hold the private keys to. In addition, each wallet address is only compatible with the underlying blockchain network on which it is created. For example, an Ethereum wallet address can only be used to send and receive Ether. If any Bitcoin or other digital assets are sent to an Ethereum wallet address or if any of the foregoing errors occur, all of the user’s sent digital assets will be permanently and irretrievably lost with no means of recovery, including by us. In these scenarios, users may blame or become dissatisfied with the Exodus Platform as a result of these negative experiences, which could adversely affect our business. 26 Table of contents We do not have insurance for any losses of assets in our users’ wallets. As a result, if private keys are compromised, including due to a cybersecurity incident or to the extent that any of the private keys relating to our users’ wallets are lost, destroyed or otherwise compromised or unavailable, and no backup of the private key is accessible, we will be unable to access the digital assets held in the related wallet. In these scenarios, users may blame or become dissatisfied with the Exodus Platform as a result of these negative experiences, which could adversely affect our ability to access or sell our digital services and subject us to regulatory scrutiny, reputational harm and significant financial losses. If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any of our digital assets, it could cause regulatory scrutiny, reputational harm and other losses. Digital assets are controllable only by the possessor of the unique private key relating to the wallet in which the digital assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded in order to prevent a third party from accessing the digital assets held in such a wallet. To the extent that any of the private keys relating to our hot wallet or cold wallet containing digital assets held for our own account are lost, destroyed or otherwise compromised or unavailable, and no backup of the private key is accessible, we will be unable to access the digital assets held in the related wallet which could adversely affect our ability to access or sell our digital assets and subject us to regulatory scrutiny, reputational harm and significant financial losses, all of which could materially and adversely affect our business, results of operations and financial condition. Some of our technology incorporates or utilizes software released under the terms of “open source” licenses, which could subject us to possible litigation and be used by other companies to compete against us. Aspects of the Exodus Platform and our applications include or utilize software released under the terms of open source licenses, including the MIT License, Internet Systems Consortium License, Apache License, Mozilla Public License and GNU Lesser General Public License. While we monitor our use of open source software (“OSS”), we could be subject to suits for noncompliance with open source licensing terms, infringement on a third party’s intellectual property rights or indemnification. Such inadvertent use could also require us to release our proprietary source code, pay damages, royalties, license fees or other amounts, seek new licenses from third parties, re-engineer our platform or applications, discontinue sales or distribution of software in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from the operation of our business, maintenance of our platform or our development efforts, any of which could adversely affect our business. Disputes with our users and other third parties could be costly, time-consuming and harm our business and reputation. Our business requires us to enter into a large number of agreements with third-party service providers and distribute the Exodus Platform in many different jurisdictions. Our agreements contain a variety of terms, including service levels, data privacy and security obligations, indemnification, dispute resolution procedures and regulatory requirements. Agreement terms may not be standardized across our business and can be subject to differing interpretations and local law requirements, which could result in disputes with our users and other third parties from time to time. If our users or other third parties notify us of a breach of contract or otherwise dispute the terms of our agreements, the dispute resolution process could be expensive and time consuming and result in the diversion of resources that could otherwise be deployed to grow our business. Even if these disputes are resolved in our favor, we may be unable to recoup the expenses and other diverted resources committed to resolving the dispute and, if we receive negative publicity in connection with the dispute, our reputation and brand may be harmed. Furthermore, the ultimate resolution of such disputes may be adverse to our interests and as a result could negatively affect our results of operations and financial condition. We face intense and increasing competition, which could adversely affect our business, financial condition and results of operations. The market in which our platform competes is intensely competitive and characterized by rapid changes in technology, user expectations, industry standards, frequent introductions of new products and improvements to existing products. We expect competition to increase as other established or emerging companies enter the markets for digital assets, particularly with respect to wallets, exchanges and applications designed to support digital assets. In particular, some of our competitors may have substantially broader and more diverse product and services offerings, allowing them to leverage existing commercial relationships, incorporate functionality into existing products, sell products and services with which we compete at zero or negative margins, offer fee waivers and reductions or other economic and non-economic concessions, bundle products, maintain closed technology platforms or render our platform unable to interoperate with such products. If they were to engage in predatory practices, it could harm our existing platform offerings or prevent us from creating viable products in other segments of the markets in which we participate. If we are unable to anticipate or effectively react to these challenges, our competitive position could weaken, and we could experience a 27 Table of contents decline in revenue or our growth rate that could materially and adversely affect our business, financial condition and results of operations. If we are not able to effectively keep pace with technological developments that are attractive to our current and prospective users, our business, results of operations and financial condition could be adversely affected. Because our platform is designed to operate on a variety of networks, applications, systems and devices, we will need to continually modify and enhance our platform to keep pace with technological advancements. There can be no assurance that updates to our platform will be released in a timely or cost-effective manner. In addition, they may contain errors or defects in operability within the Exodus Platform, which could make our platform become less marketable, less competitive or obsolete and our business, results of operations and financial condition may be adversely affected. If we fail to effectively manage our growth, we may be unable to execute our business plan, maintain high-quality levels of support, ensure the security of our platform, adequately address competitive challenges or maintain our corporate culture, and our business, financial condition and results of operations could be adversely affected. Our success depends on our ability to effectively manage the growth of our business. The Exodus Platform has experienced rapid organic growth since the market for digital assets began attracting widespread interest in 2017 and 2018. Our growth has placed, and is expected to continue to place, a strain on our management and our administrative, operational and financial infrastructure. Our success will depend in part on our ability to manage this growth effectively, which will require that we continue to improve our administrative, operational, financial, legal, and management systems and controls by, among other things: maintaining the integrity of our core business purpose, which is to design and provide the best user experience for digital assets; maintaining high levels of user support; ensuring the integrity and security of our platform and IT infrastructure; identifying and continuing to expand strategic relationships with third-party API Providers and executing agreements to integrate third-party software into the Exodus Platform; further improving our key business applications, processes and IT infrastructure; and enhancing our information and communication systems to ensure that our team members around the world are well-coordinated and can effectively communicate with each other and our growing base of third-party API Providers and users. M anaging our growth will require capital expenditure s and allocation of valuable management and team member resources. If we fail to manage our expected growth, the uninterrupted and secure operation of our platform and our compliance with the rules and regulations applicable to our operations, the quality of our platform and ability to compete could suffer. Any failure to preserve our culture also could further harm our ability to retain and recruit personnel, innovate and create new enhancements for our platform, operate effectively and execute on our business strategy. We may be unable to raise additional capital needed to grow our business. While we may need to raise additional capital to expand our operations, pursue our growth strategies and respond to competitive pressures or working capital requirements, we may not be able to obtain additional debt or equity financing on favorable terms, if at all, which could impair our growth and adversely affect our existing operations. The global economy, including credit and financial markets, has in recent years experienced extreme volatility and disruptions, including diminished credit availability, bank collapses, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates, fluctuating currency valuations and uncertainty about economic stability. Such macroeconomic conditions could also make it more difficult for us to incur additional debt or obtain equity financing. Further, the digital asset industry has been negatively impacted by recent events in recent years such as the bankruptcies of Core Scientific, Celsius Network, Voyager Digital Ltd., Three Arrows Capital and FTX. In response to these events, the digital asset markets, including the market for Bitcoin specifically, have experienced extreme price volatility and several other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital asset markets and in Bitcoin. In light of conditions impacting our industry, it may be more difficult for us to obtain equity or debt financing in the future. If we raise additional equity financing, our shareholders may experience significant dilution of their ownership interests, and the per share value of our Class A common stock could decline. Furthermore, if we engage in additional debt financing, the holders of debt likely would have priority over the holders of our Class A common stock on order of payment preference. We may be required to accept terms that restrict our ability to incur additional indebtedness, take other actions including accepting terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests of our shareholders. Additionally, additional debt financing may require us to pledge certain of our digital asset holdings as collateral, which may lead to the forced disposition of such digital asset holdings in certain circumstances, which could adversely impact our business, financial condition and operating results. 28 Table of contents We may pursue strategic transactions, which could be difficult to identify, complete, and implement, and could disrupt our business or change our business profile significantly. Our ability as an organization to successfully acquire technologies or businesses is unproven. However, we believe that our long-term growth depends, in part, on our ability to develop and monetize additional aspects of our platform, which we may pursue through acquisitions, investments in other companies, partnerships, alliances or other strategic transactions. We cannot assure you that we will be able to identify suitable transactions and, even if we are able to identify such transactions, that we will be able to consummate any such acquisitions on acceptable terms or successfully integrate them. Completing or successfully integrating strategic acquisitions involves significant risks that could adversely affect our business, results of operations, capital position, and prospects. Any transaction may fail to close on anticipated terms or timelines; be delayed, conditioned, or prohibited by regulators; or require unexpected divestitures or capital actions. Even if completed, we may be unable to integrate operations, technologies, data, risk and compliance frameworks, products, and cultures effectively; retain customers, counterparties, and key personnel; achieve expected cost synergies or revenue opportunities; or maintain the reliability and security of combined systems and third‑party/vendor relationships, including with respect to cybersecurity and data privacy. We could also inherit unforeseen liabilities, credit or compliance issues, or adverse accounting impacts, and we may incur higher‑than‑expected restructuring and integration expenses. Market volatility, interest rate movements, and funding conditions could reduce the value of acquired assets, among other adverse impacts, while integration activities may distract management, strain risk management and internal control resources, and diminish our ability to execute other strategic priorities. If we overestimate growth or synergy assumptions or encounter operational or regulatory setbacks, such transactions could be dilutive to earnings, impair goodwill or other intangibles, heighten liquidity and capital requirements, and expose us to litigation and reputational harm. For example, in November 2025, we entered into an agreement to acquire W3C, which is expected to close in 2026. Any future strategic transactions we pursue may involve a number of risks that could adversely affect our business, financial condition and operating results. Our holdings of digital assets expose us to exchange, security, valuation and liquidity risks, which could negatively affect us. The market price of Bitcoin has historically been volatile and may affect our business by fluctuating the value of funds available to us, which could materially and adversely affect our financial condition, results of operations and cash flows. Further, because we do not currently hedge our investment in Bitcoin, and do not intend to for the foreseeable future, we are directly exposed to Bitcoin’s price volatility and surrounding risks. In addition, the market price of our Class A common stock has exhibited, and we expect will continue to exhibit, a direct correlation with the market price of Bitcoin. As a result, declines in the price of Bitcoin have historically been accompanied by, and may in the future result in, immediate declines in the market price of our Class A common stock, regardless of our actual or expected operating performance or other traditional factors that influence share prices. The market price of Bitcoin is impacted by a variety of factors and is determined primarily using data from various exchanges, over-the-counter markets and derivative platforms. As described above, the digital asset industry has been negatively impacted by market price volatility. Such prices may also be subject to factors that impact commodities which could subject us to additional influence from fraudulent or illegitimate actors, real or perceived scarcity and political, economic, regulatory or other conditions. Pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of Bitcoin, our Class A common stock price and manipulation of market prices for both Bitcoin and shares of our Class A common stock. Further, volatility in digital asset pricing could lead to other impacts such as increased risks of legal proceedings or governmental scrutiny of us and our affiliates, users, suppliers and partners either in the United States or in other jurisdictions. Continued volatility in the digital asset industry could adversely affect an investment in our Class A common stock. Most of our expenses, like team member salaries, are denominated in U.S. dollars and paid using Bitcoin. At the time of payment, amounts are translated from U.S. dollar to Bitcoin based on the current Bitcoin rate. The Bitcoin used for payments is primarily derived from revenue from ongoing operations received in Bitcoin. The company pays the transfer fees related to outgoing payments. We are subject to translational risk because we may be required to pay a larger amount of Bitcoin to satisfy these expenses if the dollar value of Bitcoin decreases. Certain of our other liabilities, expenses and costs must be paid in U.S. dollars, and we may be required to convert digital assets to U.S. dollars in order to satisfy those liabilities, expenses and costs. The U.S. dollar value of any given digital asset can fluctuate significantly and may be characterized by volatility. There can be no assurance that we will be able to exchange our digital assets for U.S. dollars on a timely basis, if at all, or for a fair price. If the value of our digital assets declines, or if we experience difficulties converting our digital assets to U.S. dollars, we may not have sufficient liquidity to satisfy our liabilities, expenses and costs as they become due, which may negatively affect our business operations and financial condition. For an example of the volatility, the price of Bitcoin was $87,516 and $93,425 as of December 31, 2025 , and 2024 , respectively. To pay the same $100,000 of salary took 1.14 Bitcoin on December 31, 2025 , versus 1.07 Bitcoin on December 31, 2024 . 29 Table of contents Additionally, digital assets are not subject to the protections typically enjoyed by more conventional types of financial assets, such as FDIC or Securities Investor Protection Corporation insurance. If our digital assets are lost, stolen or destroyed, we may not have adequate sources of recovery and, even if we can identify a third party responsible for such loss, theft or destruction, such third party may not have the financial resources sufficient to make us whole again. Digital asset networks may also be subject to vulnerabilities, such as a “51% attack” where, if a mining pool were to gain control of more than 50% of the “hash” rate, or the amount of computing and process power being contributed to the network through mining, a malicious actor would be able to gain full control of the network and the ability to manipulate the blockchain. A significant portion of an individual digital asset may be held by a small number of holders, who would have the ability to manipulate the price of the asset. In addition, we do not have insurance that covers our digital asset holdings in the event of loss or fraud. As a result, we may suffer a loss with respect to our digital asset holdings, and we may not be able to recover any of our carried value in these digital asset holdings if they are lost or stolen. If we are not otherwise able to recover damages from a malicious actor in connection with these losses, our business and results of operations may suffer, which may have a material negative impact on the price of our Class A common stock. Our revenue may be adversely affected if the markets for Bitcoin, Tether, Ether and USDC deteriorate or if their prices decline. Our revenue may be adversely affected if the markets for Bitcoin, Tether, Ether and USDC deteriorate or if their prices decline, including, without limitation, as a result of the following factors: • the reduction in mining rewards of Bitcoin, including block reward halving events, which are events that occur after a specific period of time and reduces the block reward earned by miners (the Bitcoin mining rewards system is expected to continue until 2140, when the proposed limit of 21 million Bitcoin is theoretically reached; in 2009, the reward for each block in the chain mined was 50 Bitcoin; since the first halving, the reward has been periodically reduced to 25, 12.5, and to 6.25 Bitcoins on May 11, 2020; the reward was again reduced to 3.125 when the latest Bitcoin halving occurred on April 19, 2024); • public sentiment related to the actual or perceived environmental impact of Bitcoin, Tether, Ether and USDC, and related activities, including environmental concerns raised by private individuals and governmental actors related to the energy resources consumed in the Bitcoin mining process; • disruptions, hacks, splits in the underlying networks also known as “forks,” attacks by malicious actors who control a significant portion of the networks’ hash rate such as double spend or 51% attacks, or other similar incidents affecting the Bitcoin or Ethereum blockchain networks; • hard “forks” resulting in the creation of and divergence into multiple separate networks, such as Bitcoin Cash and Ethereum Classic; • informal governance led by Bitcoin, Tether, Ether and USDC core developers that lead to revisions to the underlying source code or inactions that prevent network scaling, and which evolve over time largely based on self-determined participation, which may result in new changes or updates that affect their speed, security, usability or value; • the ability for Bitcoin and Ethereum blockchain networks to resolve significant scaling challenges and increase the volume and speed of transactions; • the ability to attract and retain developers and customers to use Bitcoin, Tether, Ether and USDC for payment, store of value, unit of accounting and other intended uses and the absence of another supported digital asset to attract and retain developers and customers for the same; • transaction congestion and fees associated with processing transactions on the Bitcoin and Ethereum networks and the absence of another supported digital asset to replace these transactions; • negative public perception or market sentiment regarding Bitcoin, Tether, Ether and USDC; • development in mathematics, technology, including in digital computing, artificial intelligence, algebraic geometry and quantum computing that could result in the cryptography being used by Bitcoin, Tether, Ether and USDC becoming insecure or ineffective; • adverse legal proceedings or regulatory enforcement actions, judgments or settlements impacting cryptoeconomy participants; • regulatory, legislative or other compulsory or informal restrictions or limitations on Bitcoin, Tether, Ether and USDC lending, mining or staking activities; 30 Table of contents • many digital assets have concentrated ownership or an “admin key,” allowing a small group of holders to have significant unilateral control and influence over key decisions related to their crypto networks, such as governance decisions and protocol changes, as well as the market price of such digital assets; and • liquidity and credit risk issues experienced by other crypto platforms and other participants of the cryptoeconomy, and laws and regulations affecting the Bitcoin and Ethereum networks or access to these networks. Staking poses risks to our users’ assets which, in turn, may damage our brand and reputation, discourage existing and future customers from utilizing Everstake’s services, and adversely impact our staking revenue earned through Everstake. Certain supported digital assets enable holders to earn rewards by participating in decentralized governance, bookkeeping and transaction confirmation activities on their underlying blockchain networks, such as through staking activities, including staking through validation, delegating and baking. Staking allows users to “stake” supported digital assets held in their Exodus wallets by participating in blockchain validation through a third-party API Provider, Everstake. Everstake currently provides and is expected to continue to provide such services for certain supported crypto assets to our users in order to enable them to earn rewards based on crypto assets held in their Exodus wallets. Everstake’s network may further require customer assets to be transferred into smart contracts on the underlying blockchain networks not under Everstake’s or anyone’s control. If Everstake or smart contracts fail to operate as expected, suffer cybersecurity attacks, experience security issues or encounter other problems, our users’ assets may be irretrievably lost. In addition, certain blockchain networks dictate requirements for participation in the relevant decentralized governance activity, and may impose penalties, or “slashing,” if the relevant activities are not performed correctly, such as if the staker, delegator or baker acts maliciously on the network, “double signs” any transactions, or experience extended downtimes. If Everstake is slashed by the underlying blockchain network, our users’ assets may be confiscated, withdrawn or burnt by the network. Any penalties or slashing events could damage our brand and reputation, discourage existing and future customers from utilizing Everstake’s services, and adversely impact our staking revenue earned through Everstake. Our platform or our API Providers’ platforms may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion and scams, which could adversely affect our business. Our platform or our API Providers’ platforms may be exploited to facilitate illegal activity including fraud, money laundering, gambling, tax evasion and scams. We, our API Providers or our partners may be specifically targeted by individuals seeking to conduct fraudulent transfers, and it may be difficult or impossible for us to detect, intervene, disrupt, and avoid such transactions in certain circumstances. The use of our platform for illegal or improper purposes could subject us to claims, individual and class action lawsuits, and government and regulatory investigations, prosecutions, enforcement actions, inquiries, or requests that could result in liability and reputational harm for us. In the event that a customer is found responsible for intentionally or inadvertently violating the laws in any jurisdiction, we may be subject to governmental inquiries, enforcement actions, prosecution, or otherwise held secondarily liable for aiding or facilitating such activities. Owners of intellectual property rights or government authorities may seek to bring legal action against software providers for involvement in the sale of infringing or allegedly infringing items. Any threatened or resulting claims could result in reputational harm, and any resulting liabilities, loss of transaction volume or increased costs could harm our business. Our platform and brand may be impersonated and exploited by third-party criminal actors seeking to defraud users and other illegal activity, and we may not be able to prevent all such activity. For example, in December 2025, the Company became aware of a fraudulent application listed on the App Store that falsely claimed to be our Exodus wallet and resulted in user losses. The Company is not responsible for, does not control, and does not accept liability for the actions of unaffiliated third-party criminals or any losses incurred as a result of such actions. Similar incidents may occur in the future, and our past success in having the fraudulent application removed after sustained and proactive efforts does not guarantee we will obtain similar removals in the future. Our steps to enhance protections and safeguards, such efforts may not be fully effective. Criminal actors may continue to misuse our name, branding, or reputation in ways that are difficult to detect or prevent, and our efforts to mitigate such risks may not be timely or effective. Any such incidents could harm users, damage our brand and reputation, result in increased regulatory scrutiny or litigation, and adversely affect our business, financial condition, or results of operations. Moreover, while illegal activities are primarily facilitated through the use of fiat currencies, digital assets are relatively new and, in many jurisdictions, may be lightly regulated or largely unregulated. Many types of digital assets have characteristics, such as the speed with which digital currency transactions can be conducted, the ability to conduct transactions without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, and the irreversible nature of certain digital asset transactions, and encryption technology that anonymizes these transactions, that make digital assets susceptible to use in illegal activity. U.S. federal and state and foreign regulatory authorities and law enforcement agencies, such as the Department of Justice (“DOJ”), SEC, Commodities Futures Trading 31 Table of contents Commission (“CFTC”), Federal Trade Commission ("FTC"), OFAC or the Internal Revenue Service (“IRS”), and various state securities and financial regulators have taken and continue to take legal action against persons and entities alleged to be engaged in fraudulent schemes or other illicit activity involving digital assets. We also support digital assets that incorporate privacy-enhancing features and may from time to time support additional digital assets with similar functionalities. These privacy-enhancing digital assets obscure the identities of sender and receiver and may prevent law enforcement officials from tracing the source of funds on the blockchain. Facilitating transactions in these digital assets may cause us to be at increased risk of liability arising out of anti-money laundering and economic sanctions laws and regulations. Our users may be exposed to an API Provider experiencing insolvency or bankruptcy, which could adversely impact our business, operating results, and financial condition. Our users may be exposed to an API Provider experiencing insolvency or bankruptcy. In the scenario that an API Provider would experience insolvency or bankruptcy during the period of time in which a user’s assets are exposed to the API Provider’s platform, it is possible that such digital assets may be considered the property of a bankruptcy estate and subject to bankruptcy proceedings. Such users could be treated as the API Provider’s general unsecured creditors. For digital asset swap transactions, this risk would be limited to the brief period of time during which wallet users are engaged in an active crypto-asset transaction. For example, in connection with digital asset swap transactions, a user may be exposed to an API Provider experiencing insolvency or bankruptcy when wallet users are engaged in an active crypto- asset transaction on an API Provider’s platform. As another example, if a staking API Provider like Everstake were to experience insolvency or bankruptcy, the impact on a user’s staked digital assets would depend on the type of digital asset and the staking protocol of the particular blockchain. A user can typically request to unstake digital assets at any time, and in the event of the API Provider’s insolvency or bankruptcy, a user would stop receiving rewards for that period, but its underlying digital assets would be preserved. In this scenario, a user would need to initiate the unstaking process according to the particular blockchain protocol’s requirements (e.g., a 21-day waiting period for ATOM). Following completion of the unstaking request, a user may elect to stake its digital assets with another API Provider and any rewards already earned and stored in a user’s wallet would remain unaffected. We do not conduct diligence with respect to the exchanges, market makers and other third parties our API Providers may contract with to conduct the services they provide to our users. The Exodus Platform allows users to access the services offered and performed by our API Providers. The services provided by our API Providers allow users to engage in transactions such as digital asset exchanging, fiat onboarding and staking products for over 30,000 digital assets. We conduct KYB and other diligence with respect to our API Providers as described in “Item 1. Business – Know Your Customer and Know Your Business Programs – KYB Program For API Providers and Vendors,” and we understand that, in turn, the API Providers conduct AML and KYB procedures with respect to their service providers in accordance with their respective policies, procedures and regulatory obligations. However, we do not independently conduct diligence with respect to the third parties with which our API Providers contract. For example, we do not conduct diligence with respect to the exchanges and market makers with which our API Provider’s contract to support the services they provide to their users (including any users from the Exodus Platform). Because Exodus does not independently conduct diligence with respect to these third parties, we cannot assure users as to these third parties or the processes and procedures our API Providers use to engage such third parties. Our API Providers and the third parties with whom they contract may be subject to financial, legal, regulatory, and labor issues, cybersecurity incidents, disruptions, interruptions, and other misconduct of which we are not aware. Should any of the foregoing materialize and lead to disruptions or issues in third party operations, risks to our users may include loss of information stored with or provided to the API Provider, along with loss of access to the digital assets or fiat currency used in any pending transaction with the API Provider. In such instances, because we do not control the operations of any of our API Providers or third parties with which they contract, we will be unable to intervene and can make no assurances as to the outcome of any issue or dispute between the user and API Provider. In these scenarios, users may blame or become dissatisfied with the Exodus Platform as a result of these negative experiences, which could adversely affect our ability to access or sell our digital services and subject us to legal or regulatory scrutiny, reputational harm and significant financial losses. Our success depends on our ability to attract and retain key technical, user support and management personnel while supporting the onboarding and career development of our team members. Our ability to successfully execute on our business plan depends on the contribution of our management team as well as other key talent including platform development, operations, user support, general administrative functions and our creative and engineering teams. We have previously and may continue to experience increasing competition for available talent in the workforce as reflected by the low unemployment rate, shortages of available industry talent and increasing costs to 32 Table of contents retain team members. As a result, we could experience inefficiencies or a lack of business continuity due to team member turnover, including loss of historical knowledge, new team members’ lack of historical knowledge and lack of familiarity with the business processes, operating requirements, purpose and culture, policies and procedures and key information technologies and related infrastructure used in our day-to-day operations and financial reporting. We may also experience additional costs as new team members learn their roles and gain necessary experience and training, including as it relates to the complex regulations applicable to our business, in addition to the cost of hiring new individuals. We are dependent on our co-founders Jon Paul Richardson and Daniel Castagnoli, the loss of whose services may adversely impact the achievement of our objectives. If we were to lose the services of members of our management team or other key talent, whether due to death, disability, resignation or termination of employment, our ability to successfully implement our business strategy, financial plans, marketing and other objectives could be significantly impaired. In addition, if we are unable to attract and retain qualified key talent, we may not be able to effectively and efficiently manage our business and execute our business plan. If we are required to reclassify independent contractors as employees, we may incur additional costs and taxes which could adversely affect our business, financial condition, results of operations and prospects. We use a significant number of independent contractors in our international operations for whom we do not pay or withhold any employment tax based on their location or jurisdiction. Whether an individual is an employee or an independent contractor depends on applicable local law and may be subject to multiple, fact-intensive factors. There can be no assurance that legislative, judicial or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification of our independent contractors. Foreign tax authorities may determine that we have misclassified our independent contractors for employment tax or other purposes and, as a result, seek additional taxes from us or attempt to impose fines and penalties. Additionally, individual independent contractors could initiate legal actions asserting rights of employment in their various jurisdictions, which could include claims for unpaid wages or other benefits that are required by local laws. If we are required to pay employer taxes or pay backup withholding with respect to prior periods and/or any other amounts with respect to or on behalf of our independent contractors, our operating costs will increase, which could adversely impact our business, financial condition or results of operations. Additionally, if we are the subject of individual legal actions or government investigations related to our independent contractors, the dispute resolution process could be expensive and time consuming and result in the diversion of resources that could otherwise be deployed to grow our business. Even if any such dispute or investigation were to be resolved in our favor, we may be unable to recoup the expenses and other diverted resources committed to resolving the dispute or investigation and, if we receive negative publicity in connection with any such dispute, our reputation and brand may be harmed. Our international operations expose us to additional risks and failure to manage those risks could materially and adversely impact our business. While Exodus does not have physical infrastructure globally, we do have contractors and five subsidiaries outside of the United States and contracts with international third-party API Providers. Our international operations and any expansion internationally, including due to acquisitions, could subject us to a variety of additional risks and challenges, including: • changing macroeconomic conditions in our markets, including as a result of inflation (and related monetary policy actions in response to inflation) and the ongoing longer-term impact of changes in international trade policies; • providing our platform and operating our business in different languages, among different cultures and time zones; • compliance with foreign privacy, data protection, security laws and regulations, data localization requirements, trade laws, antitrust and competition laws, securities and commodities laws, human rights laws, and a variety of other local, national and multinational regulations and laws, and the risks and costs of non-compliance; • compliance with U.S. laws and regulations for foreign operations, including anti-bribery laws, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to acquire new users in certain foreign markets and the risks and costs of noncompliance; • greater difficulty in enforcing contracts and accounts receivable collection; • limitations on our ability to market our platform in foreign markets; • differing technical standards, existing or future regulatory and certification requirements and required features and functionality; • political and economic conditions and uncertainty in each country or region in which we operate; 33 Table of contents • reduced or uncertain protection for intellectual property rights and contractual rights in some countries; • greater risk of unexpected changes in regulatory practices, tariffs, sanctions, trade barriers, tax laws and treaties; and • differing employment practices and labor relations issues. Our measures to support compliance with foreign laws and regulations may be insufficient, and any failure to mitigate the risks associated with our international providers could impact our ability to conduct our business as planned which could materially and adversely impact our business. In addition, increased political and economic conditions and uncertainty, geo-political regional conflicts, terrorist activity, political unrest, civil strife, acts of war, government shutdowns, product boycotts, travel or immigration restrictions, tariffs and other trade restrictions, public health risks or pandemics, energy policy or restrictions, public corruption, expropriation and other economic or political uncertainties, including inaccuracies in our assumptions about these factors, could interrupt and negatively affect our business operations. We actively monitor the impact of the dynamic macroeconomic environment. For example, any geo-political unrest could cause disruptions in the Company’s business and lead to interruptions, delays or loss of critical data. Specifically, financial and digital asset markets may be negatively affected by the conflict between Russia and Ukraine and within the Middle East. Although we believe the digital asset industry remains resilient, as demonstrated by our increase in our volume in 2025 , we cannot predict the extent to which our financial condition, results of operations or cash flows will ultimately be impacted by these ongoing economic conditions. Operational costs may exceed the award for solving blocks or transaction fees. Increased transaction fees may adversely affect the usage of the Bitcoin network. Miners generate revenue from both newly created Bitcoin (known as the “block reward”) and from fees taken upon verification of transactions. If the aggregate revenue from transaction fees and the block reward is below a miner’s cost, the miner may cease operations. Additionally, in the event of a fork of the Bitcoin network, some miners may choose to mine the alternative new Bitcoin resulting from the fork, thus reducing processing power on the original blockchain. Further, the incentives for miners to contribute processing power to the Bitcoin network is set to decrease over time. As a result of the Bitcoin network’s “halving” mechanism, the block reward that miners receive for successfully mining a block are cut in half each time the Bitcoin network mines 210,000 blocks. This type of “halving” event generally occurs once every four years and will continue until the maximum possible 21 million Bitcoin have been mined and released into circulation. Currently, there are approximately 20 million Bitcoin that have been mined and are in circulation. In approximately 2140, new Bitcoin tokens will no longer be awarded for adding a new block and miners will only have transaction fees to incentivize them. As a result, it is expected that miners will need to be better compensated with higher transaction fees to ensure that there is adequate incentive for them to continue mining. If transaction confirmation fees become too high, the marketplace may be reluctant to use Bitcoin. This may result in decreased usage and limit expansion of the Bitcoin network in the retail. Conversely, if the reward for miners or the value of the transaction fees is insufficient to motivate miners, they may cease expending processing power for any blockchain to solve blocks and confirm transactions. Ultimately, if the awards of new Bitcoin for solving blocks declines and transaction fees for recording transactions are not sufficiently high to incentivize miners, or if the costs of validating transactions grow disproportionately, miners may operate at a loss, transition to other networks or cease operations altogether. Each of these outcomes could, in turn, slow transaction validation and usage, which could have a negative impact on the Bitcoin network, which is the primary network used for Exodus’ operations. An acute cessation of mining operations would reduce the collective processing power on the Bitcoin network, which would adversely affect the transaction verification process by temporarily decreasing the speed at which blocks are added to the blockchain and make the blockchain more vulnerable to a malicious actor obtaining control in excess of 50% of the processing power on the blockchain. Reductions in processing power could result in material, though temporary, delays in transaction confirmation time, which could delay receipt of revenue and payment of our expenses. Our business could be adversely impacted by the decision of foreign governments, internet service providers or others to block transmission from IP addresses on which our platform depends in order to enforce certain internet content blocking efforts. The evolving design of our platform may create challenges for various organizations, including governments, that seek to block certain content based on IP address “blacklists” or other mechanisms. If these challenges become too difficult for those organizations to overcome, they could make the decision to block content in an over-broad manner or block completely websites of providers that integrate with our platform. For example, the Chinese government restricts access to certain Google Cloud services from within the People’s Republic of China, and users of our mobile platform have experienced degraded functionality in China due to these restrictions on our platform’s ability to connect with those 34 Table of contents services. Some of these blocking efforts would be out of our control once they have been put in place and may limit our ability to provide our platform or third-party apps on a fully global basis, which could reduce demand for our platform among current or potential users and adversely impact our business, results of operations and financial condition. We are subject to changes in tax laws, treaties or regulations in various jurisdictions. We operate in various jurisdictions and are subject to changes in applicable tax laws, treaties or regulations in those jurisdictions. A material change in the tax laws, treaties or regulations, or their interpretation, of any jurisdiction with which we do business, or in which we have significant operations, could adversely affect us. For example, the Pillar 2 approach, which came into effect in 2023 in certain jurisdictions, will establish a global minimum tax rate of 15%, such that multinational enterprises with an effective tax rate in a jurisdiction below this minimum rate will need to pay additional tax. Pillar 2 did not apply in the years ended December 31, 2025 and 2024 , but many aspects of the application of Pillar 2 remain to be clarified with respect to the implementation of the Organization for Economic Cooperation and Development’s approach in their tax treaties and domestic tax laws in the jurisdictions in which we or our subsidiaries operate or based. We may spend significant resources deploying new products, which may fail to attract widespread adoption and adversely affect our business. Our ability to maintain our status within the digital asset industry is largely dependent on our ability to adjust with changes in consumer demand. As we focus on remaining competitive within the digital asset industry by growing the Exodus Platform, we may deploy significant resources towards developing new or novel products or services. Such resources could include significant financial costs. Despite the significant potential these products or services may have, such products or services may fail to attract widespread adoption and therefore may have a negative impact on our business and result in sunk costs. We may incorporate AI technologies into some of our products or processes. These technologies may present business, compliance, or reputational risks. The digital asset industry is a forward, innovation-leaning industry that is constantly evaluating how to incorporate the latest technological developments into products, including AI. As the digital asset industry matures, we will continue to evaluate opportunities where AI may offer benefits that enhance the Exodus Platform for both existing and potential future products, as well as our processes. AI can pose significant business, compliance, or reputational risks due to both potential existing flaws within AI models or the evolving regulatory landscape in the various jurisdictions where the Exodus Platform may be available. Public AI failures, inadequate AI governance, recordkeeping or auditability failures, data privacy violations, intellectual property leakage, or loss of human judgment are some of the risks that AI technologies may pose to our business as we explore potential use cases for these technologies. Both actual and perceived risks could have a negative impact on us from a business, compliance, or reputational perspective. Additionally, regulatory lag could have a material impact on our use of AI in instances where a jurisdiction imposes new laws or regulations that cause us to change or eliminate the way we may already use AI within the Exodus Platform prior to such changes in laws or regulations. In such instances, we may be required to decrease or completely eliminate some products or AI-dependent features within products, resulting in lower user attraction and retention. Fluctuations in interest rates, and rapidly changing interest rate environments could reduce expected revenues and otherwise result in reduced profitability. As the digital asset industry grows, it has become more sensitive to larger, macroeconomic factors that could affect the ability for digital asset-related businesses to grow and offer certain products. Changes in interest rates could reduce or eliminate our ability to offer products that are indirectly reliant on such interest rates. The payout of any potential stablecoin rewards programs on the Exodus Platform could be adversely affected in cases where underlying financial resources are indirectly reliant upon existing interest rates paid to the stablecoin issuer on the underlying reserve assets . Should any fluctuation or change in the prevailing interest rates happen, these reward programs may be negatively affected or even unfeasible, resulting in reduced profitability. 35 Table of contents Risks Related to Our Industry Due to the unfamiliarity or negative publicity associated with digital assets, confidence or interest in digital asset platforms may decline which could adversely affect our business, results of operations and financial condition. The Exodus Platform is built around holding, transferring, exchanging and using digital assets, which means our business depends on growth in the public’s adoption and acceptance of digital assets and the underlying blockchain technology to maintain and increase demand for the Exodus Platform. During 2022, a major wave of bankruptcies occurred, where multiple companies such as Core Scientific, Celsius Network, Voyager Digital Ltd., Three Arrows Capital and FTX and several of its affiliates all declared bankruptcy. T he FTX app was available on the Exodus Platform until we removed it in November 2022. Following these events, users’ confidence in trading of digital assets has decreased and the digital asset market has experienced negative publicity and extreme price volatility. The decrease in confidence in digital assets has had and may continue to have a negative impact on our business, including a decline in users, transaction-based API fees and value of the digital assets held by Exodus. The new and rapidly evolving market for digital assets and related services is subject to a high degree of uncertainty. The growth of the digital asset industry, as well as the blockchain networks on which digital assets rely, is subject to a high degree of uncertainty regarding consumer adoption and long-term development. The slowing or stopping of the development, general acceptance and adoption of digital assets and blockchain networks may deter or delay the acceptance and adoption of the Exodus Platform or the applications on the Exodus Platform. The factors affecting the further development of the digital asset industry, as well as blockchain networks, include, without limitation: worldwide growth in the adoption and use of digital assets and other blockchain technologies; the regulatory environment relating to digital assets and blockchains; the maintenance and development of the OSS protocol of blockchain networks; a decline in the popularity or acceptance of digital assets and related services; the availability of other forms or methods of buying and selling goods and services or trading assets, including new means of using government-backed currencies or existing networks; and general economic conditions globally and in the United States. For example, there is currently relatively limited use of digital assets in the retail and commercial marketplace in comparison to relatively extensive use as a store of value. Digital assets are not currently a form of legal tender in the United States and have only recently become selectively accepted as a means of payment for goods and services by some retail and commercial outlets, and the use of such assets by consumers to pay such retail and commercial outlets remains limited. Banks and other established financial institutions may refuse to process funds for digital asset transactions; process wire transfers to or from digital asset trading venues, companies or service providers; or maintain accounts for persons or entities transacting in digital assets or providing related services. In addition, some taxing jurisdictions, including the U.S., treat the use of certain digital assets as a medium of exchange for goods and services to be a taxable sale of such assets, which could discourage the use of such assets as a medium of exchange, especially for a holder of such assets that have appreciated in value. Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in digital asset-related activities. A number of companies that engage in Bitcoin and/or other digital asset-related activities have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses associated with digital assets may have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions. To the extent that such events may happen to us, they could have a material adverse effect on our business, prospects or operations. Risks Related to Regulation We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors. We are an emerging growth company, as defined in the Jumpstart Our Business Startups (JOBS) Act, which allows us to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to: (a) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (b) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statement, (c) exemptions from the requirements of holding nonbinding advisory shareholder votes on executive compensation and shareholder approval of any golden parachute payments not previously approved, and (d) extended transition periods available for complying with new or revised accounting standards. We choose to take advantage of these exemptions and relying on any of these provisions may make it more difficult for investors and securities analysts to evaluate our business and longer‑term performance. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock, and our stock price may be more volatile. 36 Table of contents We will remain an emerging growth company ("EGC") until the last day of the fiscal year following the fifth anniversary of the closing of our IPO (which would be fiscal year 2028, after which we would no longer benefit from reduced EGC reporting requirements), although we will lose that status sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of our common stock held by non- affiliates exceeds $700 million as of June 30 of any future year. When we are no longer eligible for these scaled disclosures and accommodations, we will incur additional costs and devote additional management time to comply with more demanding reporting and governance requirements, including auditor attestation of internal controls, which could adversely affect our results of operations and financial condition. The regulatory regime governing blockchain technologies, digital assets and securities is uncertain and new regulations or policies may materially adversely affect the development and utilization of the Exodus Platform. As a general matter, laws and regulations of digital assets, blockchain technologies and digital asset exchanges are currently undeveloped, vary among federal, state, local and international jurisdictions and are subject to significant uncertainty and evolving interpretations. Specifically, the laws and regulations governing un-hosted self-custody wallet providers like Exodus are currently undeveloped and many domestic and international laws and regulations that apply to digital assets, blockchain technologies and digital exchanges may not be applicable to our core wallet business. As digital assets, blockchain technologies and digital asset exchanges continue to expand in popularity and market size, laws and regulations governing un-hosted self-custody wallet providers like Exodus may also develop or may be reinterpreted to apply to us. For more information on our compliance efforts to prepare for such changes in laws and regulations, see “Item 1. Business – Regulatory Environment.” Our efforts to comply with applicable laws and regulations may be unsuccessful, and any actual or perceived failure to meet applicable requirements may result in an adverse effect on our business. As an example of how the uncertain and developing regulatory regime for digital assets, blockchain technologies and digital exchanges may impact our business as a self-custody wallet provider, the FCA has published new rules relating to how digital assets can be marketed to consumers. Specifically, companies seeking to promote digital assets in the U.K. to retail consumers are required to register with the FCA or have any marketing approved by an authorized company. The Company cannot register with the FCA because it operates a self-custodial wallet, and the rules are focused on asset custodians. Therefore, in anticipation of these rules taking effect on October 8, 2023, the Company took steps before the deadline to comply with the new FCA rules by modifying its marketing materials to avoid a determination by the FCA that it was promoting digital assets. Even with the steps taken by the Company, and although at the time the Company believed it was in compliance with such rules, the FCA utilized the broad nature of the new rules to state that the Company is not in compliance with the rules and placed the Company on its Warning List in November 2023. In April 2024, following months of constructive dialogue with the FCA, the FCA removed the Company from its Warning List. Had the Company failed to reach an agreement with the FCA to be removed from the Warning List, it may have had a negative effect on the Company’s financial performance and operations and, in the future, we could have been subject to a variety of civil, criminal and administrative fines, penalties, orders and actions as a result of our business activities. To the extent we are required to comply with new regulations, or if licenses or other authorizations are required in one or more jurisdictions in which we operate or will operate, there is no guarantee that we will be able to comply with such regulations or be granted such licenses or authorizations. We may need to change our business model to comply with these legal or regulatory requirements, licensing and/or registration requirements in order to avoid violating applicable laws or regulations. Various legislative and executive bodies in the U.S. and in other countries may, in the future, adopt laws, regulations, guidance or other actions which may severely impact the development and growth of the Exodus Platform. Failure by Exodus, or certain users of the Exodus Platform, to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including civil penalties and fines. Further, as digital assets, blockchain technologies and digital asset exchanges continue to expand in popularity and market size, federal and state agencies have begun to regulate their use and operation. State regulators in New York, Texas, New Hampshire, North Carolina, Washington and Illinois have created new regulatory frameworks, published guidance on existing laws and regulations or amended their state’s statutes to include cryptocurrencies in their existing licensing requirements. Federal law continues to evolve as well. The USDOT, the SEC, and the CFTC and the IRS have published guidance on the treatment of digital assets. Both federal and state agencies have instituted enforcement actions against those violating their interpretation of existing laws. There can be no assurance that we and our employees, contractors and agents will not violate or otherwise fail to comply with such laws and regulations despite our policies and procedures, 37 Table of contents including geo-blocking technology, designed to help monitor for and support compliance with existing and new laws and regulations. The regulations governing stablecoins in the United States are still being finalized and may materially affect the development and utilization of the Exodus Platform. In July 2025, President Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins Act ("GENIUS Act") into law. The GENIUS Act will go into effect on January 18, 2027, or 120 days after the date on which the primary Federal payment stablecoin regulators issue any final implementing regulations, if earlier. The GENIUS Act establishes the first comprehensive federal regulatory framework for stablecoins by limiting issuance to authorized bank and non-bank issuers, requiring one-to-one reserve backing in cash or short-term U.S. Treasury assets, mandating monthly reserve disclosures and audits, imposing AML/KYC and supervisory compliance obligations, and providing priority rights for stablecoin holders in insolvency. While the rulemaking process remains ongoing, many entities, including our third- party service providers, are developing and deploying products with the intention of complying with finalized rules. Some of the products within the Exodus Platform may be reliant on these third-party service providers. In the event that the finalized rules impose unforeseen requirements, obligations, or prohibitions on these third-party service providers, their planned or existing products may be adversely affected. This may have a direct or indirect material effect on our future products or services that will be reliant on our third-party service providers complying with the GENIUS Act. In such an event, it may cause significant changes, delays, or abandonment of certain products under development, which may adversely affect our business. Additionally, any legislative amendments to the GENIUS Act prior to finalized rules could have a significant impact on its implementation and consequently have an adverse effect on our business. Certain digital assets traded using third-party services integrated within our platform or other programs could be viewed as “securities” for purposes of federal or state regulations and could subject us to regulatory scrutiny, inquiries, investigations, fines and other penalties. Offers and sales of securities in the United States are required under the Securities Act to either be registered with the SEC or to qualify for an exemption from federal registration and may also be required to be registered with applicable state regulators. Certain digital assets could fall within the definition of a security. While we do not engage in trading of digital assets on our platform or otherwise engage in the business of effecting transactions in securities for the account of others on our platform, we receive compensation from the third-party exchanges that have connected to our Exchange Aggregator. We have created two separate fee structures for the third-party exchanges that have connected to our Exchange Aggregator. For services offered by API Providers to persons located in the United States, we charge fees based on a volume-based, tiered monthly subscription structure payable to us in arrears once a month. For services offered by API Providers to persons located outside the United States, we generally utilize a transaction-based structure to charge API Providers a percentage of the underlying value of the digital asset transaction. Certain digital assets could fall within the definition of a security, and the SEC has previously pursued enforcement actions that argued that certain digital assets were securities. Under the current Administration, these lawsuits have largely been dropped or have reached settlements. We receive compensation from the API Providers that have connected to our Exchange Aggregator. It is possible that a receipt of compensation based on the percentage of digital assets exchanged could be deemed to be the receipt of transaction-based fees for facilitating transactions in unregistered securities, and that we could be found to be facilitating or engaged ourselves and in violation of the federal and state securities laws, which could have a negative effect on our business, financial condition and results of operations. Historically, approximately 25% of our volume has been located in the U.S. at any given time. We do not believe we have an obligation to register as a transfer agent under the Exchange Act, but a regulator may disagree. It is possible that we could be viewed as a transfer agent for purposes of federal or state law. Because our platform allows our users to connect through APIs to exchanges that permit the transfer of digital assets, it is possible that if such digital assets were deemed to be securities, the SEC or another regulator could determine that we have acted as a transfer agent. We do not consider ourselves a transfer agent under the Exchange Act because our platform does not provide the services described in the definition of a “transfer agent” under the Exchange Act. However, it is possible that the SEC or another regulator could disagree with our position. If that were the case, we could be forced to register as a transfer agent and comply with applicable law, which could lead to our experiencing significant costs and could force us to change or cease our operations. Any of these developments could have a negative effect on our business, financial condition and results of operations. 38 Table of contents We do not believe we have an obligation to register with the SEC as a clearing agency, but a regulator may disagree. We have taken the position that we are not a clearing agency under the Exchange Act because the Exodus Platform does not provide the services described in the definition of a “clearing agency” under the Exchange Act. However, it is possible that the SEC or another regulatory agency could disagree with our position. If so, we could be forced to register as a clearing agency and comply with applicable law, which could lead to significant costs and could force us to change or cease our operations. Any of these developments could have a negative effect on our business, financial condition and results of operations. We do not believe we have an obligation to register the platform as an exchange or alternative trading system, though a regulator may disagree. Exchanges and alternative trading systems (“ATSs”) are networks that constitute, maintain or provide a marketplace or facilities to aggregate orders of multiple purchasers and sellers of securities by displaying trading interests entered on the system to users through consolidated quote screens or receiving orders for processing and execution. This does not include systems that have only one seller for each security (e.g., the issuer), even if there are multiple buyers. Entities that are engaged as an exchange or ATS, with respect to securities, are subject to federal registration and significant regulatory oversight by the SEC and FINRA. We do not consider ourselves an exchange or ATS because our platform does not provide the services that are undertaken by an exchange or ATS; however, it is possible that the SEC or another regulator could disagree with our position and require us to register and comply with applicable law, which could lead to significant costs and could force us to change or cease our operations. We do not consider ourselves a statutory underwriter under the Securities Act, though a regulator may disagree. We do not believe staking services offered to users of the Exodus Platform through third-party apps, such as Everstake, are deemed to be securities offerings. If a regulator were to disagree, we could be deemed a “statutory underwriter” under Section 2(a)(11) of the Securities Act and subject to additional regulatory obligations which could have a negative effect on our business, financial condition and results of operations. We do not believe we have an obligation to register the platform as a Futures Commission Merchant or a Commodity Pool Operator, but a regulator may disagree. A Futures Commission Merchant is a financial intermediary that takes customer orders to buy or sell futures, options on futures, and swaps, handling client funds (margin) and executing trades on exchanges, acting as the crucial link between individual traders and the complex derivatives markets. A Commodity Pool Operator is an individual or organization that operates a "commodity pool"—a collective investment fund where multiple people pool their money together to trade in commodities, futures contracts, options, or swaps. All Futures Commission Merchants, and most Commodity Pool Operators, must register with both the CFTC and the National Futures Association. We have taken the position that we are neither a Futures Commission Merchant nor a Commodity Pool Operator because our products and services, or those offered by our third-party service providers through the Exodus Platform, are not activities that require registration under the Commodity Exchange Act. However, it is possible that the CFTC or another regulator could disagree with our position and require us to register and comply with applicable law, which could lead to significant costs and could force us to change or cease our operations. We are not registered as a money transmitter or money services business, and our business may be adversely affected if we are required to do so. Currently, money transmission regulations and interpretations at the federal level and varying approaches among the states create a complex and rapidly evolving regulatory landscape that may change through legislative, regulatory, or interpretive developments. It is possible that we could be found to be, or required to be registered as, a money services business (“MSB”) at the federal level and/or a money transmitter at the state level. MSBs include, among other businesses, a person providing money transmission services such as the acceptance and transmission of currency, funds or other value that substitutes for currency from one person another location or person by any means. Because of the breadth of this definition, FinCEN regulations state that whether a person is a money transmitter is ultimately a facts and circumstances determination. In addition to registration obligations at the federal level, virtually every U.S. state (and the District of Columbia) requires entities providing money transmission services to be licensed by the appropriate state agency responsible for the supervision of financial institutions. State laws regulating money transmission are not uniform but generally define money transmission to include the acceptance and transmission of money or monetary value to a location within or outside the United States by any means. Through its interpretations of money transmission regulations, particularly with respect to virtual assets, FinCEN has published formal guidance indicating that without having total independent control over the value in users’ wallets, and 39 Table of contents where the value stored in the wallet is the property of the owner, such a business may fall outside the scope of MSB registration requirements. We believe that we do not meet the definition of an MSB because Exodus does not exercise total independent control over the value in our users’ wallets, accept or transmit cryptocurrency on behalf of any user or otherwise act as an intermediary for exchange of currencies by taking possession of such digital assets. For the same reasons, we believe we are outside the scope of state licensing requirements of a money transmitter. However, if we were deemed to be, or required to register as, an MSB at the federal level, and/or a money transmitter at the state level, we could be subject to significant additional regulation and obligations, including the handling of substantial personal information of users, which could affect our business and operations. Regardless of the revenue structure for our Exchange Aggregator, we could be deemed a broker-dealer because certain digital assets on the Exodus Platform may be deemed to be securities, and we would likely experience difficulty in complying with the broker-dealer financial responsibility rules. Because some digital assets may be considered securities by regulators, it is possible that our activities with respect to digital assets, including digital asset staking, would cause us to be viewed as a “broker” or “dealer” under federal or state law. If we were deemed to be a broker-dealer, as defined in the federal securities laws, we would have to comply with a number of regulatory requirements, including compliance with regulations that govern broker-dealer financial responsibility, such as Exchange Act Rule 15c3-3(b), which relates to establishing and maintaining physical possession or control of a user’s digital asset securities. It is likely that we would experience significant challenges in attempting to comply with these regulations and may not be able to achieve such compliance. Due to the nature of digital asset securities, if we were deemed to be a broker-dealer, it would likely be difficult for us to comply with the requirements to obtain and maintain physical possession or control of all fully paid or excess securities carried for the account of users. In addition, obtaining an exemption from such custody rules would likely result in significant financial costs and management resources and we may not be able to obtain such an exemption. For example, in the ATS Role in the Settlement of Digital Asset Security Trades, SEC Staff No-Action Letter (Sep. 25, 2020), the SEC Staff described an acceptable process for regulated self-custodial ATS exchanges, but such process would be costly to implement and operate. It is likely that we would not be able to implement and operate such a process. Should we be deemed to be a broker-dealer, and should we not be able to either obtain an exemption from or implement acceptable processes for compliance with the broker-dealer financial responsibility rules, we would be deemed not in compliance with the appropriate broker-dealer regulations. Such non-compliance would likely have a materially adverse effect on our business and financial operations. Moreover, pursuant to Section 29(b) of the Exchange Act, any contract made by Exodus in violation of any provision of the Exchange Act, including a sale of securities deemed to have been made by Exodus as an unregistered broker-dealer to an investor, would be voidable at the option of the investor. A successful claim by an investor would generally require the return of an amount equal to the purchase price and rescission of the purchase contract. Regardless of the revenue structure for digital asset staking offered through Everstake, we could be deemed a broker- dealer if the services that users can obtain related to these digital assets are deemed securities under U.S. federal securities law, and we would likely experience difficulty in complying with the broker-dealer financial responsibility rules. It is possible that our activities with respect to digital assets, including digital asset staking, would cause us to be viewed as a “broker” or “dealer” under federal or state law. Because the services that users can obtain related to these digital assets may be considered securities by regulators, the fees we receive from Everstake or other exchanges could potentially raise regulatory issues related to whether the recipient of the fees is required to register as a broker-dealer under the Exchange Act. We believe that our fee structure does not require us to register as a broker-dealer; however, there is no guarantee that regulatory agencies will ultimately agree with our position, and we may be required to stop offering access to digital asset staking. Failure to comply with anti-bribery and anti-corruption laws and similar laws could subject us to penalties and other adverse consequences. We are subject to the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”), the U.S. domestic bribery statute contained in 18 U.S. Code § 201 and possibly other anti-bribery and anti-corruption laws in countries outside of the United States where we conduct our activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted to prohibit companies, their team members , agents, representatives, business partners and third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. We sometimes leverage third parties to sell our products and conduct our business abroad. Exodus, our team members, agents, representatives, business partners and third-party intermediaries may have direct or indirect interactions with 40 Table of contents officials and employees of government agencies, or state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of such parties even if we do not explicitly authorize such activities. As we increase our international sales and business, our risks under these laws may increase. Any allegations or violation of the FCPA or other applicable anti-bribery and anti-corruption laws could result in whistleblower complaints, sanctions, settlements, prosecution, enforcement actions, fines, damages, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, suspension or debarment from government contracts, all of which may have an adverse effect on our reputation, business, results of operations and prospects. Responding to any investigation or action will likely result in a materially significant diversion of management’s attention and resources, significant defense costs and other professional fees. Furthermore, we rely on third parties for our KYC and other compliance obligations. If these third parties fail to effectively provide these services, we may be subject to adverse consequences as described above. Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our platform and adversely affect our business. The laws and regulations in the jurisdictions in which we operate are evolving, may impose inconsistent or conflicting standards among jurisdictions, can be subject to significant change and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions. For example, foreign countries and governmental bodies, including the European Union ("EU") and United Kingdom ("U.K.") and other jurisdictions in which we operate or conduct our business, have laws and regulations concerning the collection, use, retention, security and transfer of the personal data of individuals in those jurisdictions. We may become subject to GDPR and U.K. GDPR, which impose stringent privacy and data protection requirements, and could increase the risk of non-compliance and the costs of providing our products and services in a compliant manner. Additionally, the GDPR (covering the European Economic Area), U.K. GDPR and Swiss data protection regimes impose strict rules on the transfer of personal data out of the EU, U.K. or Switzerland to a “third country,” including to the United States. As an un- hosted self-custody wallet provider, we do not process the personal data of our customers and therefore, compliance with these regimes do not currently have a material impact on our business. However, any actual or perceived breach of the GDPR or U.K. GDPR in the future could further add to our compliance costs, limit how we process information, or lead to reputational damage, regulatory investigations or fines. For example, if regulators assert that we have failed to comply with the GDPR or U.K. GDPR, we may be subject to fines. We may also face civil claims, as well as associated costs, diversion of internal resources, and reputational harm. Aspects of the GDPR, U.K. GDPR, California Consumer Privacy Act, Swiss Secretariat for Economic Affairs and other laws, regulations, industry standards and other obligations related to privacy, data protection and data security remain uncertain. As such, compliance may require us to incur additional costs, modify our data handling practices and restrict our business operations. It is also possible that these laws, regulations, industry standards and other obligations may be interpreted and applied in a manner that is, or is alleged to be, inconsistent with our policies and procedures, the Exodus Platform or our services. If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to modify the Exodus Platform or services or make changes to our business activities and practices. We may be unable to make such changes and modifications in a commercially reasonable manner, or at all, and our ability to develop new offerings and features could be limited. Our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection, and information security may be unsuccessful, and any actual or perceived failure to meet applicable requirements may result in an adverse effect on our business. We also expect that there will continue to be new proposed laws, regulations and standards relating to privacy and data protection in various jurisdictions, and we cannot determine the impact such laws, regulations and standards may have on our business. We are subject to export control, import and sanctions laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate such laws and regulations. Under U.S. export control and sanctions laws and regulations, including EAR and various economic and trade sanctions administered by OFAC, our business activities are subject to various restrictions related to the sale or supply of certain products and services to U.S. embargoed or sanctioned countries, governments, persons and entities and require authorization for the export of certain encryption items. Our precautions to prevent our software and services from being accessed or provided in violation of such laws may not be successful, and we may have previously allowed our software to be downloaded by individuals or entities potentially located in countries or territories subject to U.S. trade embargoes, potentially in violation of U.S. sanctions laws. In December 2018, we received an administrative subpoena issued by OFAC seeking information regarding potential transactions with individuals in Iran. In response, we conducted a 41 Table of contents comprehensive review that covered all countries and territories subject to U.S. trade embargoes administered by OFAC. We submitted a voluntary self-disclosure and subpoena responses regarding potential violations to OFAC, and took remedial action designed to prevent similar activity from occurring in the future. In June 2024, OFAC issued a Pre-Penalty Notice informing the Company that OFAC intends to impose a civil monetary penalty for alleged violations of U.S. sanctions laws. The alleged violations involve the free download of the un-hosted self-custodial Exodus wallet by users potentially located in Iran, Syria, Sudan, and the Crimea region of Ukraine, as well as the provision of customer support to users potentially located in Iran and Crimea. We submitted a response to the Pre-Penalty Notice, which asserts a range of factual and legal defenses to these allegations, and have continued to cooperate with OFAC. In 2025, we reached a settlement agreement with OFAC to fully resolve the matter regarding individuals in Iran and as of December 31, 2025, the civil monetary penalty was paid in full. The limited rights of legal recourse available to us expose us and our investors to the risk of loss of our digital assets for which no person is liable. At this time, there is no specifically enumerated U.S. or foreign governmental, regulatory, investigative or prosecutorial authority or mechanism through which to bring an action or complaint regarding missing or stolen digital assets. Although law enforcement agencies like the Federal Bureau of Investigation have recovered stolen Bitcoin, recovery efforts have been labor intensive. To the extent that we are unable to recover our losses from such action, error or theft, such events could have a material adverse effect on our business, prospects, operations and potentially the value of any Bitcoin or other digital assets we acquire or hold for our own account. We may plan to launch products in the future that require regulatory licenses for which we may fail to obtain or experience significant delays in obtaining. Exodus, as a noncustodial wallet provider, does not currently possess the regulatory licenses that a custodial financial intermediary does. Activities conducted through the Exodus Platform that leverage third-party service providers are, to the extent necessary, reliant on licenses held by those providers. However, as we evaluate new products, we may conclude that it is necessary for us to obtain and maintain regulatory licenses that we do not currently possess. In such instances, the deployment of certain future products may be dependent on our ability to obtain those licenses. In the event that we are unable to obtain, or experience significant delays in obtaining, those licenses, our future products may be significantly delayed or abandoned, which may lead to significant costs and have an adverse effect on our business. Risks Related to Ownership of Our Class A Common Stock The market prices and trading volume of our shares of Class A common stock may experience rapid and substantial volatility which could cause purchasers of our Class A common stock to incur substantial losses. Shares of our Class A common stock may experience rapid and substantial price and trading volume volatility unrelated to our financial performance, which could cause purchasers of our Class A common stock to incur substantial losses. Extreme fluctuations in the market price and trading volume of our Class A common stock may occur in response to: • strong and atypical retail investor interest, including on social media platforms and online forums; • direct access by retail investors to broadly available trading platforms; • the amount and status of short interest in our securities; • access to margin debt; • trading in options, derivatives or any other related hedging on our Class A common stock; • actual or anticipated variations in our operating and financial performance, including projected operational and financial results and failure to meet those projections; • our inability to pay dividends or other distributions or repurchase shares of our Class A common stock; • changes in market valuations of similar companies; • market reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings of our existing shareholders; • any major change in our Board, management or key personnel; • actions by institutional or significant shareholders; • speculation in the press or investment community about our company or industry; • strategic actions by us or our competitors, such as acquisitions or other investments; 42 Table of contents • legislative, administrative, regulatory or other actions affecting our business or industry, including positions taken by the IRS; • investigations, proceedings or litigation that involve or affect us; • the occurrence of any of the other risk factors included in this report; • general market and economic conditions; and • other trading factors. We cannot assure you that the market price and trading volume of our Class A common stock will not fluctuate or decline significantly in the future, in which case you could incur substantial losses. Further, the market price and trading volume of our shares of Class A common stock may fluctuate dramatically, regardless of any developments in our business. Sales of substantial amounts of our Class A common stock in the public market, or the perception that they might occur, could reduce the price that our Class A common stock might otherwise attain. We cannot predict what effect, if any, future issuances by us of our Class A common stock will have on the market price of our Class A common stock. In addition, shares of our Class A common stock that we may issue in connection with any acquisition may not be subject to resale restrictions. The market price of our Class A common stock could drop significantly if certain large holders of our Class A common stock, or recipients of our Class A common stock in connection with any acquisition, sell all or a significant portion of their shares of Class A common stock or are perceived by the market as intending to sell these shares other than in an orderly manner. In addition, these sales could impair our ability to raise capital through the sale of additional Class A common stock in the capital markets. Furthermore, our directors, executive officers, and other team members may sell shares of our Class A common stock, including shares received pursuant to equity incentive plans, during periodic trading windows. Because of the limited trading volume of our Class A common stock, concentrated sales when the trading window opens have in the past caused, and may in the future cause, the market price of our Class A common stock to decline. The dual class structure of our common stock has the effect of concentrating voting control with certain shareholders, including our executive officers, team members and directors and their affiliates, which will limit your ability to influence the outcome of important transactions, including a change in control. Our authorized common stock is divided into two series, denominated as “Class A common stock” and “Class B common stock.” Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of shareholders, unless otherwise required by law or our amended and restated certificate of incorporation. As of December 31, 2025 , the shareholders holding shares of Class B common stock collectively beneficially own shares representing approximately 95% of the voting power of our outstanding common stock. Messrs. Richardson and Castagnoli, each an executive officer and director of the Company, control approximately 93% of the voting power of our outstanding common stock. Because of our dual class structure, we anticipate that, for the foreseeable future, these individuals will continue to be able to control all matters submitted to our shareholders for approval, including the election and removal of directors. These holders of Class B common stock may vote in a way which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of our company, could deprive our shareholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our Class A common stock. In addition, because the holders of our Class B common stock control a substantial majority of the voting power of our outstanding common stock, they have the ability to approve matters requiring shareholder approval by written consent without a meeting and without the participation of other shareholders. As a result, corporate actions requiring shareholder approval, such as the adoption or amendment of equity incentive plans, may be approved solely by our controlling shareholders, which may limit your ability to influence those decisions. Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our amended and restated certificate of incorporation, including, without limitation, transfers for tax and estate planning purposes, so long as the transferring holder of Class B common stock continues to hold exclusive voting and dispositive power with respect to the shares transferred. All shares of Class B common stock will convert automatically into shares of Class A common stock upon the date on which the Class B common stock ceases to represent at least 10% of the total voting power of our 43 Table of contents outstanding common stock. The conversion of shares of Class B common stock into shares of Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term, which may primarily include our executive officers and directors. Provisions of our Certificate of Incorporation and our Bylaws could discourage potential acquisition proposals and could deter or prevent a change in control. Certain provisions of our amended and restated certificate of incorporation and our amended and restated bylaws could have the effect of delaying, deferring or discouraging another person from acquiring control of our company, delaying or preventing changes in control of our management team, Board, governance or policy and could limit the price that some investors might be willing to pay for shares of our common stock. These provisions prohibit our shareholders from calling special meetings of our shareholders; include the absence of cumulative voting; authorize our Board to designate and issue one or more series of preferred stock without shareholder approval, the terms of which may be determined at the sole discretion of our Board; reflect the dual class structure for our common stock; and restrict the forum for certain litigation against us to certain federal or Delaware state courts. These provisions apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our Board determines is in our best interests and that of our shareholders. We are not subject to the provisions of Section 21.606 of the Texas Business Organizations Code, which could negatively affect your investment. In general, Section 21.606 of the Texas Business Organizations Code (“Section 21.606”) prohibits a publicly held Texas corporation from engaging in a “business combination” with an “affiliated shareholder” for a period of three years after the date of the transaction in which the person became an affiliated shareholder, unless the business combination is approved in a prescribed manner. We elected in our certificate of incorporation to not be subject to the provisions of Section 21.606. This may make us more vulnerable to takeovers that are completed without the approval of our Board and/or without giving us the ability to prohibit or delay such takeovers as effectively. We are currently a “controlled company” and, as a result, qualify for and could rely on exemptions from certain corporate governance requirements. Our directors and officers currently have beneficial ownership of a majority of the total voting power. As a result, we are considered a “controlled company” within the meaning of the corporate governance standards of the NYSE American and are exempt from certain stock exchange corporate governance requirements that would otherwise apply, which include (i) the requirement that a majority of the board of directors consists of independent directors, (ii) requirement that director nominees be selected either by the independent directors or a nomination committee comprised solely of independent directors and (iii) the requirement that the compensation of officers be determined, or recommended to the board of directors for determination, either by the independent directors or a compensation committee comprised solely of independent directors. We have elected to be exempt from some or all corporate governance requirements of the NYSE American and, as a result, you may not have the same protections afforded to shareholders of companies that are subject to all the corporate governance requirements of the NYSE American. Risks Related to Ownership of Our Common Stock Tokens The distributed ledger technology used by our Transfer Agent, Securitize, and our co-transfer agent, Superstate (together, our “Transfer Agents”), is novel with respect to our Common Stock Tokens and has been subject to limited testing and usage. Each share of Class A common stock has a corresponding Common Stock Token, and the Common Stock Tokens are maintained by our Transfer Agents. The infrastructure that facilitates peer-to-peer transactions in our Common Stock Tokens is a novel system and has been subject to only limited testing and usage, which subjects it to the following risks, including: • the possibility of undiscovered technical flaws; • the possibility that cryptographic security measures that authenticate transactions and the distributed ledger could be compromised; • the possibility that new technologies or services inhibit access to the blockchain network used by the Common Stock Tokens; and • the possibility that our Transfer Agents do not competently manage transfers, potentially disrupting transfers of Common Stock Tokens. 44 Table of contents The regulations governing tokenized securities in the United States are evolving and could introduce material costs of compliance. Tokenized securities is an ongoing topic of conversation amongst various regulators, including the SEC. As regulators contemplate additional rules or guidance to help facilitate the issuance and trading of tokenized securities, additional regulatory requirements could be imposed on the corresponding Common Stock Token that comprises each share of our Class A common stock. This could include changes to regulations affecting a token holder’s ability to transfer or custody such Common Stock Tokens in their wallet. While it remains speculative as to how regulators may approach these issues, there could be significant requirements imposed on either our Transfer Agents or Exodus that may negatively impact token holders.