What changed in this filing

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Item 1A. Risk Factors

2022-05-16 compared with 2021-11-15 · 77 added, 4 removed, 0 unchanged (100% of the section changed)

evaluating us and our common stock, we urge you to carefully consider the risks and other information in this Quarterly Report on Form

10-Q, as well as the risk factors disclosed in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended December

31, 2020, which we filed with the SEC on March 22, 2021, and in the registration statement and related amendments and supplements (including

prospectus supplements) relating to the June Offering.

Risk Factors.

Quarterly Report on Form 10-Q should

be read in conjunction with our 2021 Form 10-K, which describes various material risks and uncertainties to which we are or may become

These risks and uncertainties could, directly or indirectly, adversely affect our business, results of operations, financial

condition, liquidity, or cash flows and could cause our actual results to differ materially from our past results or the results contemplated

by any forward-looking statements we make.

changes from the risk factors set forth in our 2021 Form 10-K are set forth below:

a particular non-fungible token (NFT) or other digital or “crypto” asset is a “security” is subject to a high

degree of uncertainty, and if we are unable to properly characterize an NFT or other digital asset, we may be subject to regulatory scrutiny,

inquiries, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.

SEC and its staff have taken the position that certain digital or “crypto” assets (which includes NFTs) fall within the definition

of a “security” under the U.S.

federal securities laws.

The legal test for determining whether any given digital asset is

a security is a highly complex, fact-driven analysis that evolves over time, and the outcome is difficult to predict.

The SEC generally

does not provide advance guidance or confirmation on the status of any particular digital asset as a security.

Furthermore, the SEC’s

views in this area have evolved over time and it is difficult to predict the direction or timing of any continuing evolution.

possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views

of the SEC and its staff.

foreign jurisdictions have taken a broad-based approach to classifying digital assets as “securities,” while certain other

foreign jurisdictions have adopted a narrower approach.

As a result, certain digital assets may be deemed to be a “security”

under the laws of some jurisdictions but not others.

Various foreign jurisdictions may, in the future, adopt additional laws, regulations,

or directives that affect the characterization of digital assets as “securities.”

classification of a digital asset as a security under applicable law has wide-ranging implications for the regulatory obligations that

flow from the offer and sale of such assets.

For example, a digital asset that is a security in the United States may generally only

be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for

an exemption from registration.

Persons that effect transactions in digital assets that are securities in the United States may be subject

to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers

to trade digital assets that are securities in the United States are generally subject to registration as national securities exchanges,

or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system (ATS) in compliance

with rules for ATSs.

Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing

Foreign jurisdictions may have similar licensing, registration, and qualification requirements.

have policies and processes to analyze whether each NFT that we seek to facilitate posting and sale on our platform could be deemed to

be a “security” under applicable laws.

Our policies and processes do not constitute a legal standard but rather represent

our company-developed model, which permits us to make a risk-based assessment regarding the likelihood that a particular NFT could be

deemed a “security” under applicable laws.

Regardless of our conclusions, we could be subject to legal or regulatory action

in the event the SEC, a state or foreign regulatory authority, or a court were to determine that an NFT posted and sold on our platform

is a “security” under applicable laws.

Because our platform is not registered or licensed with the SEC or foreign authorities

as a broker-dealer, national securities exchange, or ATS (or foreign equivalents), and we do not seek to register or rely on an exemption

from such registration or license to facilitate the offer and sale of NFTs on our platform, we only permit posting on our platform of

those NFTs for which we determine there are reasonably strong arguments to conclude that the NFT is not a security.

We believe that our

process reflects a comprehensive and thoughtful analysis and is reasonably designed to facilitate consistent application of available

legal guidance to digital assets to facilitate informed risk-based business judgment.

However, we recognize that the application of securities

laws to the specific facts and circumstances of digital assets may be complex and subject to change, and that a posting determination

does not guarantee any conclusion under the U.S.

federal securities laws.

We expect our risk assessment policies and to continuously

evolve to take into account case law, facts, and developments in technology.

can be no assurances that we will properly characterize any given NFT as a security or non-security for purposes of determining whether

our platform will allow the posting of such NFT, or that the SEC, foreign regulatory authority, or a court, if the question was presented

to it, would agree with our assessment.

If the SEC, state or foreign regulatory authority, or a court were to determine that NFTs offered

or sold on our platform are securities, we would not be able to offer such NFTs until we are able to do so in a compliant manner.

A determination

by the SEC, a state or foreign regulatory authority, or a court that an NFT posted and sold on our platform was a security may also result

in us determining that it is advisable to remove NFTs from our platform that have similar characteristics to the NFT that was determined

to be a security.

In addition, we could be subject to judicial or administrative sanctions for failing to offer or sell the NFT in compliance

with the registration requirements, or for acting as a broker, dealer, or national securities exchange without appropriate registration.

Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal

liability, and reputational harm.

Customers that purchased such NFTs on our platform and suffered losses could also seek to rescind a

transaction that we facilitated as the basis that it was conducted in violation of applicable law, which could subject us to significant

We may also be required to cease facilitating transactions in other similar NFTs, which could negatively impact our business,

operating results, and financial condition.

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

What changed 10-Q

Item 1A. Risk Factors