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Item 1A. Risk Factors

2026-05-15 compared with 2025-11-14 · 3 added, 504 removed, 11 unchanged (98% of the section changed)

5 unchanged sentences

contained in this report.

There have been no material changes to our Risk

Factors as therein previously reported, except as noted below:

Risks Related to Cryptocurrency

Absent federal regulations, there is a possibility that certain

cryptocurrencies may be classified as “securities.” Any classification of a cryptocurrency as a “security” would

subject us to additional regulation and could materially impact the operation of our business.

Cryptocurrency refers to digital assets that are issued by and transmitted

through an open-source protocol, collectively maintained by a peer-to-peer network of decentralized user nodes.

We believe that digital

assets intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from

the use of the blockchain system, such as HYPE, are not securities, but neither the SEC nor any other U.S.

federal or state regulator

has formally taken such a position.

Despite the Trump Administration’s Executive Order titled “Strengthening American Leadership

in Digital Financial Technology” which includes as an objective “protecting and promoting the ability of individual citizens

and private sector entities alike to access and to maintain self-custody of digital assets,” cryptocurrency has not yet been classified

with respect to U.S.

federal securities laws.

Therefore, while (for the reasons discussed below) we believe that HYPE and other cryptocurrencies

intrinsically linked to a blockchain system are digital commodities and not “securities” within the meaning of the U.S.

federal securities laws, and registration of the Company under the 1940 Act, is therefore not required under the applicable securities

laws, we acknowledge that a regulatory body or federal court may determine otherwise.

Therefore, our belief, even if reasonable under

the circumstances, would not preclude legal or regulatory action based on such a finding that cryptocurrency is a “security,”

which would require us to register as an investment company under the 1940 Act.

We have also adapted our process for analyzing the U.S.

federal securities

law status of cryptocurrencies over time, as guidance and case law have evolved.

As part of our U.S.

federal securities law analytical

process, we take into account a number of factors, including the various definitions of “security” under U.S.

federal securities

laws and federal court decisions interpreting the elements of these definitions, such as the U.S.

Supreme Court’s decisions in the Howey and Reves cases,

as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing

guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S.

federal securities

Our belief that HYPE and other blockchain-linked cryptocurrencies in which we intend to invest are not a “security”

is premised, among other reasons, on our belief that such cryptocurrencies do not meet the elements of the Howey test.

For instance, ownership of HYPE and other blockchain-linked cryptocurrencies do not convey the right to receive any interest, rewards,

or other returns.

We acknowledge, however, that the SEC, a federal court or another relevant

entity could take a different view.

The regulatory treatment of cryptocurrency is such that it has drawn significant attention from legislative

and regulatory bodies, in particular the SEC which has previously stated it deemed cryptocurrency a security.

Application of securities

laws to the specific facts and circumstances of digital assets is complex and subject to change.

Our belief, even if reasonable under

the circumstances, would not preclude legal or regulatory action based on a finding that cryptocurrency, or any other digital asset we

might hold is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential

injunctions, cease-and-desist orders, fines, and penalties if cryptocurrency was determined to be a security by a regulatory body or a

Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations,

financial condition, and prospects.

The emergence or growth of other digital assets, including those

with significant private or public sector backing, could have a negative impact on the price of cryptocurrencies we hold and adversely

affect our business.

The emergence or growth of digital assets other than cryptocurrencies

we may hold could have a material adverse effect on our financial condition.

There are numerous alternative digital assets and many entities,

including consortia and financial institutions, are researching and investing resources into private or permissioned blockchain platforms

or digital assets.

For example, some cryptocurrency networks utilize proof-of-work mining.

Others use a “proof-of-stake” mechanism

for validating transactions that requires significantly less computing power than proof-of-work mining.

If the mechanisms for validating

transactions in alternative digital assets are perceived as superior to the mechanisms used by the digital assets in which we invest,

those digital assets could gain market share.

Other alternative digital assets could include “stablecoins,”

which are designed to maintain a constant price because of, for instance, their issuers’ promise to hold high-quality liquid assets

(such as U.S.

dollar deposits and short-term U.S.

treasury securities) equal to the total value of stablecoins in circulation.

have grown rapidly as an alternative to other digital assets as a medium of exchange and store of value, particularly on digital asset

trading platforms.

Additionally, central banks in some countries have started to introduce

digital forms of legal tender.

For example, China’s CBDC project was made available to consumers in January 2022, and governments

including the United States, the United Kingdom, the European Union, and Israel have been discussing the potential creation of new CBDCs.

Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete

with, or replace, other digital assets as a medium of exchange or store of value.

As a result, the emergence or growth of these or other

digital assets could cause the market price of cryptocurrencies we hold to decrease, which could have a material adverse effect on our

business, financial condition and results of operations.

If we were deemed to be an investment company under the 1940

Act, applicable restrictions likely would make it impractical for us to continue segments of our business as currently contemplated.

Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally

will be deemed to be an “investment company” if (i) it is, or holds itself out as being, engaged primarily, or proposes to

engage primarily, in the business of investing, reinvesting, or trading in securities or (ii) it engages, or proposes to engage, in the

business of investing, reinvesting, owning, holding, or trading in securities and it owns or proposes to acquire investment securities

having a value exceeding 40% of the value of its total assets (exclusive of U.S.

government securities, shares of registered money market

funds under Rule 2a-7 of the 1940 Act, and cash items) on an unconsolidated basis.

Rule 3a-1 under the 1940 Act generally provides that

notwithstanding the Section 3(a)(1)(C) test described in clause (ii) above, an entity will not be deemed to be an “investment company”

for purposes of the 1940 Act if no more than 45% of the value of its assets (exclusive of U.S.

government securities, shares of registered

money market funds under Rule 2a-7 of the 1940 Act, and cash items) consists of, and no more than 45% of its net income after taxes (for

the past four fiscal quarters combined) is derived from, securities other than U.S.

government securities, shares of registered money

market funds under Rule 2a-7 of the 1940 Act, securities issued by employees’ securities companies, securities issued by qualifying

majority owned subsidiaries of such entity, and securities issued by qualifying companies that are controlled primarily by such entity.

We do not believe that we are an “investment company” as such term is defined in either Section 3(a)(1)(A) or Section 3(a)(1)(C)

of the 1940 Act.

Historically, we have been focused on developing a next-generation

enhanced ultrasound technology platform—Thermo-Acoustic Enhanced Ultrasound, or TAEUS®.

Recently, we have begun focusing

on pursuing opportunities to expand our portfolio into coins, digital assets and cryptocurrency.

Since we believe cryptocurrency is not

an investment security, we do not hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing,

reinvesting, or trading in securities within the meaning of Section 3(a)(1)(A) of the 1940 Act.

With respect to Section 3(a)(1)(C), we believe we satisfy the elements

of Rule 3a-1 and therefore are deemed not to be an investment company under, and we intend to conduct our operations such that we will

not be deemed an investment company under, Section 3(a)(1)(C).

We believe that we are not an investment company pursuant to Rule 3a-1

under the 1940 Act because, on a consolidated basis with respect to wholly-owned subsidiaries but otherwise on an unconsolidated basis,

no more than 45% of the value of the Company’s total assets (exclusive of U.S.

government securities, shares of registered money

market funds under Rule 2a-7 of the 1940 Act, and cash items) consists of, and no more than 45% of the Company’s net income after

taxes (for the last four fiscal quarters combined) is derived from, securities other than U.S.

government securities, shares of registered

money market funds under Rule 2a-7 of the 1940 Act, securities issued by employees’ securities companies, securities issued by qualifying

majority owned subsidiaries of the Company, and securities issued by qualifying companies that are controlled primarily by the Company.

Cryptocurrency and other digital assets, as well as new business models

and transactions enabled by blockchain technologies, present novel interpretive questions under the 1940 Act.

There is a risk that assets

or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes

of the 1940 Act, which would increase the percentage of securities held by us for 1940 Act purposes.

The SEC has requested information

from a number of participants in the digital assets ecosystem, regarding the potential application of the 1940 Act to their businesses.

For example, in an action unrelated to the Company, in February 2022, the SEC issued a cease-and-desist order under the 1940 Act to BlockFi

Lending LLC, in which the SEC alleged that BlockFi was operating as an unregistered investment company because it issued securities and

also held more than 40% of its total assets, excluding cash, in investment securities, including the loans of digital assets made by BlockFi

to institutional borrowers.

If we were deemed to be an investment company, Rule 3a-2 under the

1940 Act is a safe harbor that provides a one-year grace period for transient investment companies that have a bona fide intent to be

engaged primarily, as soon as is reasonably possible (in any event by the termination of such one-year period), in a business other than

that of investing, reinvesting, owning, holding, or trading in securities, with such intent evidenced by the company’s business

activities and an appropriate resolution of its board of directors.

The grace period is available not more than once every three years

and runs from the earlier of (i) the date on which the issuer owns securities and/or cash having a value exceeding 50% of the issuer’s

total assets on either a consolidated or unconsolidated basis or (ii) the date on which the issuer owns or proposes to acquire investment

securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S.

government securities and

cash items) on an unconsolidated basis.

Accordingly, the grace period may not be available at the time that we seek to rely on Rule 3a-2;

however, Rule 3a-2 is a safe harbor and we may rely on any exemption or exclusion from investment company status available to us under

the 1940 Act at any given time.

Furthermore, reliance on Rule 3a-2, Section 3(a)(1)(C), or Rule 3a-1 could require us to take actions

to dispose of securities, limit our ability to make certain investments or enter into joint ventures, or otherwise limit or change our

service offerings and operations.

If we were to be deemed an investment company in the future, restrictions imposed by the 1940 Act—including

limitations on our ability to issue different classes of stock and equity compensation to directors, officers, and employees and restrictions

on management, operations, and transactions with affiliated persons—likely would make it impractical for us to continue our business

as contemplated, and could have a material adverse effect on our business, results of operations, financial condition, and prospects.

We may be subject to regulatory developments related to crypto

assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations.

As cryptocurrency and other digital assets are relatively novel and

the application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects,

it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner

that adversely affects the price of cryptocurrency.

federal government, states, regulatory agencies, and foreign countries may

also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact

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

If cryptocurrency is determined to constitute a security for purposes

of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market

price of cryptocurrency and in turn adversely affect the market price of our common stock.

Moreover, the risks of us engaging in a cryptocurrency

treasury strategy have created, and could continue to create complications due to the lack of experience that third parties have with

companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability

to obtain such coverage on acceptable terms in the future.

Changes in the accounting treatment of cryptocurrency holdings

could have significant accounting impacts, including increasing the volatility of our results.

In December 2023, the FASB issued ASU 2023-08, which upon our adoption

will require us to measure in-scope cryptocurrency assets at fair value in our statement of financial position, and to recognize gains

and losses from changes in the fair value of our cryptocurrency in net income each reporting period.

ASU 2023-08 will also require us

to provide certain interim and annual disclosures with respect to our cryptocurrency holdings.

The standard is effective for our interim

and annual periods beginning January 1, 2025, with a cumulative-effect adjustment to the opening balance of retained earnings as of the

beginning of the annual reporting period in which we adopt the guidance.

Due in particular to the volatility in the price of cryptocurrencies,

we expect the adoption of ASU 2023-08 to have a material impact on our financial results in future periods, increase the volatility of

our financial results, and affect the carrying value of our cryptocurrency on our balance sheet, and it could also have adverse tax consequences,

which in turn could have a material adverse effect on our financial results and the market price of our common stock.

Additionally, as

a result of ASU 2023-08 requiring a cumulative-effect adjustment to our opening balance of retained earnings as of the beginning of the

annual period in which we adopt the guidance and not permitting retrospective restatement of our historical financial statements, our

future results will not be comparable to results from periods prior to our adoption of the guidance.

The broader digital assets industry, including the technology associated

with digital assets, the rate of adoption and development of, and use cases for, digital assets, market perception of digital assets,

and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing, and there may be additional

risks in the future that are not possible to predict.

Changes in our ownership of cryptocurrency could have accounting, regulatory

and other impacts, as well.

While we currently intend to primarily own cryptocurrency directly, we may investigate other potential approaches

to owning cryptocurrencies, including indirect ownership (for example, through ownership interests in a fund that owns cryptocurrencies

and deemed ownership via ownership of cryptocurrency derivative assets).

If we were to own all or a portion of our cryptocurrencies in

a different manner, the accounting treatment for our cryptocurrencies, our ability to use our cryptocurrencies as collateral for additional

borrowings, and the regulatory requirements to which we are subject, may correspondingly change.

For example, the volatile nature of cryptocurrencies

may force us to liquidate our holdings to use it as collateral, which could be negatively impacted by any disruptions in the cryptocurrency

market, and if liquidated, the value of the collateral would not reflect potential gains in market value of our cryptocurrency.

Our management relies upon the advice of an asset manager through

an asset management agreement to assist in building a narrowly focused investment strategy and the execution of the Company’s strategy

and may not yield the desired return.

We have engaged an asset manager to manage our cryptocurrency holdings

and have adopted a treasury policy in which we plan to maintain a majority of our holdings in one to five decentralized finance digital

assets, including HYPE.

Our management, cryptocurrency advisory board and such asset manager will have broad discretion in the application

of the net proceeds from any offering by the Company and could spend the proceeds in ways that do not improve our results of operations

or enhance the value of our common stock.

The failure to apply these funds effectively could result in financial losses that could cause

the price of our common stock to decline.

Cryptocurrency price volatility may materially depress asset

valuations, necessitating substantial cash reserves or liquidity buffers to maintain operational resilience.

These risks are compounded

by the lack of comprehensive regulation governing cryptocurrency trading platforms, which face material exposure to fraud, market manipulation,

security breaches, and operational failures that could materially and adversely affect the value of our cryptocurrency holdings.

We may invest in even more cryptocurrencies in the future, which could

materially and adversely affect our business, financial condition and results of operations, primarily due to the inherent price volatility

of cryptocurrency and the impact of accounting standards.

Cryptocurrencies can be highly susceptible to sharp price swings, which can

significantly impact our financial statements, especially under mark-to-market accounting.

To mitigate these risks, companies holding

significant amounts of cryptocurrencies must maintain substantial capital reserves to absorb potential declines in asset value without

compromising their overall financial health.

This heightened need for liquidity reflects the increased risk associated with holding cryptocurrencies

and underscores the importance of robust risk management strategies when navigating the uncertainties of the digital asset market.

Digital asset trading platforms handling cryptocurrencies and particularly

small-cap cryptocurrencies are relatively new and often operate without the oversight typical of regulated securities or commodities markets.

Many platforms, particularly those based outside the United States, are subject to limited or inconsistent regulatory standards and often

do not provide transparent information about their ownership, management, or compliance practices.

This lack of oversight increases the

risk of fraudulent activities such as artificial trading volume, wash trading, and market manipulation—issues that have been documented

in unregulated cryptocurrency markets and could similarly affect cryptocurrency trading.

Reports have indicated that a significant portion

of trading volume on unregulated digital asset trading platforms may be artificially inflated or non-economic in nature.

Manipulative behavior on cryptocurrency exchanges can distort market

prices and lead to unexpected losses for investors.

As a result, reduced market confidence in these platforms could negatively impact

the liquidity and value of cryptocurrencies.

We may hold substantial amounts of cryptocurrencies and must be vigilant about these risks,

as trading activity that is not reflective of genuine market interest can lead to volatility and potential losses.

The operational integrity of digital asset trading platforms is another

critical risk factor.

Many of these platforms may lack robust security measures, making them vulnerable to hacking, fraud, and other operational

As we may hold large quantities of cryptocurrencies, we must consider the risk of security breaches, which could materially

and adversely affect our business, financial condition and results of operations.

We intend to use the majority of net proceeds from any future

offering by the Company to purchase additional cryptocurrency, the price of which has been, and will likely continue to be, highly volatile.

We may use the net proceeds from any future offering by the Company

to purchase additional HYPE and other cryptocurrencies in accordance with our treasury strategy.

Cryptocurrency is a highly volatile asset.

Cryptocurrency does not pay interest, but if management determines to stake the cryptocurrency tokens in treasury, rewards can be earned

on cryptocurrency.

The ability to generate a return on investment from the net proceeds from any offering by the Company will depend on

whether there is appreciation in the value of HYPE and other cryptocurrencies following our purchases of such cryptocurrency with the

net proceeds from any future offering by the Company and whether the Company is successful in pursuing other strategies to create income

streams or otherwise generate funds using its cryptocurrency holdings.

Future fluctuations in HYPE and other cryptocurrency’s trading

prices may result in our converting cryptocurrency purchased with the net proceeds from any offering into cash with a value substantially

below the net proceeds from such an offering.

Cryptocurrency and other digital assets are novel assets, and are subject

to significant legal, commercial, regulatory and technical uncertainty, which could adversely impact their price.

The application of state

and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators

in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the

price of various cryptocurrencies.

federal government, states, regulatory agencies, and foreign countries may also enact new

laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of cryptocurrency

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

For example, the U.S.

executive branch and

SEC, among others in the United States and abroad, have been active in recent years, and laws including the European Union’s Markets

in Crypto Asset Regulation and the U.K.’s Financial Services and Markets Act 2023 became law.

It is not possible to predict whether,

or when, any of these developments will lead to Congress granting additional authorities to the SEC or other regulators, or whether, or

when, any other federal, state or foreign legislative bodies will take any similar actions.

It is also not possible to predict the nature

of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets

to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, nor

how any new regulations or changes to existing regulations might impact the value of digital assets generally and cryptocurrency specifically.

The consequences of increased or different regulation of digital assets and digital asset activities could adversely affect the market

price of cryptocurrency and in turn adversely affect the market price of our common stock.

Moreover, the risks of engaging in a digital

asset treasury strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience

that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance

or the potential inability to obtain such coverage on acceptable terms in the future.

Cryptocurrency holdings are less liquid than our existing cash

and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Historically, the crypto markets have been characterized by significant

volatility in price;

limited liquidity and trading volumes compared to sovereign currencies markets;

relative anonymity;

regulatory landscape;

potential susceptibility to market abuse and manipulation;

compliance and internal control failures at exchanges;

and various other risks inherent in its entirely electronic, virtual form and decentralized network.

During times of market instability,

we may not be able to sell our cryptocurrency at favorable prices or at all.

Further, cryptocurrency which we hold with our custodians

does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation

by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Additionally, pursuant to the asset management

agreement we intend to enter into with the asset manager, we are currently and may generally be unable to enter into term loans or other

capital raising transactions collateralized by our unencumbered cryptocurrency or otherwise generate funds using our cryptocurrency holdings,

including in particular during times of market instability or when the price of cryptocurrency has declined significantly.

If we are unable

to sell our cryptocurrency, enter into additional capital raising transactions using cryptocurrency as collateral, or otherwise generate

funds using our cryptocurrency holdings, or if we are forced to sell our cryptocurrency at a significant loss, in order to meet our working

capital requirements, our business and financial condition could be negatively impacted.

Cryptocurrencies do not pay interest or dividends.

Cryptocurrencies do not pay interest or other returns and we can only

generate cash from our cryptocurrency holdings if we sell our cryptocurrency or implement strategies to create income streams or otherwise

generate cash by using our cryptocurrency holdings.

Even if we pursue any such strategies, we may be unable to create income streams or

otherwise generate cash from our cryptocurrency holdings, and any such strategies may subject us to additional risks.

We are not subject to legal and regulatory obligations that apply

to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.

Mutual funds, exchange-traded funds and their directors and management

are subject to extensive regulation as “investment companies” and “investment advisers” under U.S.

this regulation is intended for the benefit and protection of investors.

We are not subject to, and do not otherwise voluntarily

comply with, these laws and regulations.

This means, among other things, that the execution of or changes to our cryptocurrency treasury

strategy, our use of leverage, the manner in which our cryptocurrency is intended to be custodied, our ability to engage in transactions

with affiliated parties and our operating and investment activities generally are not subject to the extensive legal and regulatory requirements

and prohibitions that apply to investment companies and investment advisers.

Consequently, our board of directors has broad discretion

over the investment, leverage and cash management policies it authorizes, whether in respect of our cryptocurrency holdings or other activities

we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding cryptocurrency.

If we or our third-party service providers experience a security

breach or cyberattack and unauthorized parties obtain access to our cryptocurrency, or if our private keys are lost or destroyed, or other

similar circumstances or events occur, we may lose some or all of our cryptocurrency and our financial condition and results of operations

could be materially adversely affected.

Security breaches and cyberattacks are of particular concern with respect

to cryptocurrency.

Blockchain-based cryptocurrencies and the entities that provide services to participants in the cryptocurrency ecosystem

have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.

For example, in October

2021, it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers

of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers.

Similarly, in November

2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400

million in digital assets from customers.

A successful security breach or cyberattack could result in:

● a partial or total loss of our cryptocurrency in a manner that may not be

covered by insurance or the liability provisions of the custody agreements with the custodians who hold our cryptocurrency;

● harm to our reputation and brand;

● improper disclosure of data and violations of applicable data privacy and

● significant regulatory scrutiny, investigations, fines, penalties, and other

legal, regulatory, contractual and financial exposure.

Further, any actual or perceived data security breach or cybersecurity

attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are

directly impacted, could lead to a general loss of confidence in the broader cryptocurrency ecosystem or in the use of the cryptocurrency

network to conduct financial transactions, which could negatively impact us.

Attacks upon systems across a variety of industries, including industries

related to cryptocurrency, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated,

well-funded and organized groups and individuals, including state actors.

The techniques used to obtain unauthorized, improper or illegal

access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly

evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target.

These attacks may occur on our systems or those of our third-party service providers or partners.

We may experience breaches of our security

measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities.

In particular, we

expect that unauthorized parties will attempt to gain access to our systems and facilities, as well as those of our partners and third-party

service providers, through various means, such as hacking, social engineering, phishing and fraud.

Threats can come from a variety of

sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders.

In addition, certain

types of attacks could harm us even if our systems are left undisturbed.

For example, certain threats are designed to remain dormant or

undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate

preventative measures.

Further, there has been an increase in such activities due to the increase in work-from-home arrangements.

risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing Russia-Ukraine, Israel-Hamas and Israel-Iran

conflicts, or other future conflicts, including potential proliferation of malware into systems unrelated to such conflicts.

breach of our operations or those of others in the cryptocurrency industry, including third-party services on which we rely, could materially

and adversely affect our financial condition and results of operations.

We face significant risks relating to disruptions, forks, 51%

attacks, hacks, network disruptions, or other adverse events or other compromises to the cryptocurrency blockchains, which could materially

and adversely impact our business, financial condition and results of operations.

Blockchain networks are maintained by decentralized networks of participants,

and as such are susceptible and vulnerable to a variety of risks, including disruptions, security breaches, and fundamental technical

Both networks are vulnerable to attacks by malicious actors who gain control of a significant portion of the network’s mining

hash rate, a scenario commonly referred to as a 51% attack.

In such an event, the attacker could double-spend transactions, reverse previously

confirmed transactions, or otherwise disrupt the normal operations of the network.

Successful 51% attacks have historically undermined

trust in affected blockchain networks and could materially decrease the value of cryptocurrency assets.

Additionally, forks, or splits in the underlying protocol, may occur

when participants fail to reach consensus on proposed upgrades or changes.

Forks can lead to the creation of duplicate networks, confusion

among market participants, dilution of the original network’s value, and disruption of the network’s operations.

in particular, can materially and adversely impact the perceived stability and value of digital assets, leading to reduced demand and

price declines.

Further, hacks and other security breaches targeting the core infrastructure

of blockchain networks or major participants, such as exchanges and custodians, could severely impact the reputation and market confidence

in these networks.

Exploits of protocol-level vulnerabilities could also compromise the integrity of the cryptocurrency blockchains, resulting

in a substantial loss of value.

The success and growth of cryptocurrency assets depend significantly

on their continued security, stability, and scalability.

Any technical failures, consensus breakdowns, governance disputes, or regulatory

interventions that diminish confidence in the networks or impair their functionality could lead to a material decline in their market

prices, which could materially and adversely impact our business, financial condition and results of operations.

A sustained or significant

decrease in the price or liquidity of cryptocurrencies, whether due to 51% attacks, forks, hacks, network disruptions, or other adverse

events, could negatively impact our business, financial condition, and results of operations.

Furthermore, even the perception that any

of these events could occur may lead to significant market volatility and price declines, adversely affecting our business, financial

condition and results of operations.

Our custodially-held cryptocurrencies may become part of the

custodian’s insolvency estate if one or more of our custodians enters bankruptcy, receivership or similar insolvency proceedings.

We plan to hold substantially all of our cryptocurrency in custody

accounts at a U.S.-based, institutional-grade custodian that has demonstrated a record of regulatory compliance and information security.

As we further execute on our strategy, we intend to expand our holdings to multiple similar custodians.

If our custodially-held cryptocurrencies are considered to be the property

of our custodians’ estates in the event that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings,

we could be treated as a general unsecured creditor of such custodians, inhibiting our ability to exercise ownership rights with respect

to such cryptocurrencies and this may ultimately result in the loss of the value related to some or all of such assets.

A series of recent

high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in

the digital asset industry, the closure or liquidation of certain financial institutions that provided lending and other services to the

digital assets industry, and the filing and subsequent settlement of a civil fraud lawsuit have highlighted the counterparty risks applicable

to owning and transacting in digital assets.

These bankruptcies, closures, liquidations and other events have likely negatively impacted

the adoption rate and use of cryptocurrencies.

Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other

events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price, and

use of cryptocurrencies, limit the availability to us of financing collateralized by such assets, or create or expose additional counterparty

Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage we maintain related to

our cryptocurrencies.

Even if we are able to prevent our cryptocurrencies from being considered the property of a custodian’s bankruptcy

estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing

our cryptocurrencies held by the affected custodian during the pendency of the insolvency proceedings.

Any such outcome could have a material

adverse effect on our financial condition and the market price of our listed securities.

Risks Related to Owning Our Securities, Our Financial

Results and Our Need for Financing

Our stock is subject to minimum requirements

to remain listed on the Nasdaq Capital Market, including a minimum bid price requirement and stockholders’ equity requirement, and

may be delisted if it does not maintain compliance with those requirements.

On May 3, 2024, the Company received a notification

letter from the Listing Qualifications Department of Nasdaq (the “Staff”) notifying the Company that, because the closing

bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer

met the minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring

a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”).

Effective August 16, 2024, the Company effected a

reverse stock split at a ratio of one-for-fifty (“August Reverse Stock Split”).

The August Reverse Stock Split did not

have the intended effect of regaining compliance with the Nasdaq Minimum Bid Price Rule and shares of the Company’s common stock

opened for trading on a post-split basis on the Nasdaq Capital Market on August 20, 2024 at a bid price of $0.99.

The Company held a special meeting of the stockholders

on October 28, 2024 for the purpose of approving a subsequent reverse stock split.

Following stockholder approval, the Company filed

a Certificate of Amendment to the Company’s Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-35

reverse stock split of the shares of the Company’s common stock, effective as of November 7, 2024 (the “November Reverse Stock

As a result of the November Reverse Stock Split, the Company regained compliance with the Nasdaq Minimum Bid Price Requirement.

If we fall below the Minimum Bid Price Requirement again, we cannot be certain that our stockholders will approve a reverse stock split

or, if approved, how the market would respond to such a reverse stock split.

While Nasdaq rules do not impose a specific limit

on the number of times a listed company may effect a reverse stock split to maintain or regain compliance with the Minimum Bid Price Requirement,

Nasdaq has stated that a series of reverse stock splits may undermine investor confidence in securities listed on Nasdaq.

Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that if any listed company that fails to meet the Minimum Bid Price Requirement after effecting

one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then the company

is not eligible for a Minimum Bid Price Requirement compliance period of 180 days.

As a result, since the Company has effected the 1-for-50

August Reverse Stock Split and the 1-for-35 November Reverse Split, if we subsequently fail to satisfy the Minimum Bid Price Requirement,

Nasdaq will begin the process of delisting our common stock without providing a Minimum Bid Price Requirement compliance period.

the Company would still be eligible to request a hearing before the Nasdaq Panel to present its plan for regaining and sustaining compliance

with the Minimum Bid Price Requirement.

In addition to the Minimum Bid Price Requirement,

Nasdaq Marketplace Rule 5550(b) requires listed companies to maintain $2.5 million of stockholders’ equity, a market value of listed

securities of at least $35 million, or $500,000 of net income for the most recently completed fiscal year or for two of the three most

recently completed fiscal years (the “Stockholders’ Equity Requirement”).

On May 27, 2025, the Company received a notification

letter from the Staff notifying the Company that its stockholders’ equity had fallen below the $2,500,000 required minimum for continued

listing set forth in the Stockholders’ Equity Requirement.

The notification letter stated that the Company had until July 11, 2025

to provide Nasdaq with a specific plan to achieve and sustain compliance.

The Company submitted its plan to regain compliance on July

11, 2025 and subsequently provided the Staff with additional materials.

On October 31, 2025, the Company received written notice that,

based on review of the compliance plan and additional materials, the Staff had granted the Company an extension to November 24, 2025 to

regain compliance with the Stockholders’ Equity Requirement.

As a result of the Company’s closing of a

private placement offering for gross proceeds of approximately $4.9 million on October 15, 2025, the Company believes it has

regained compliance with the minimum $2.5 million Stockholders’ Equity Requirement for continued listing.

Nasdaq will continue

to monitor the Company’s ongoing compliance with the Stockholders’ Equity Requirement and, if at the time of its next

periodic report the Company does not evidence compliance, it may be subject to delisting.

If our common stock ceases to be listed for trading

on the Nasdaq Capital Market, we would expect that our common stock would be traded on one of the three tiered marketplaces of the OTC

Markets Group.

If Nasdaq were to delist our common stock, it would be more difficult for our stockholders to dispose of our common stock

and more difficult to obtain accurate price quotations on our common stock.

Our ability to issue additional securities for financing or

other purposes, or otherwise to arrange for any financing we may need in the future, may also be materially and adversely affected if

our common stock or warrants are not listed on a national securities exchange.

Unregistered Sales of Equity Securities

and Use of Proceeds

There have been no material changes to our Risk Factors as therein

previously reported.

Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

4 unchanged sentences

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What changed 10-Q

Item 1A. Risk Factors