What changed in this filing

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Item 1A. Risk Factors

2026-03-31 compared with 2025-03-27 · 684 added, 242 removed, 160 unchanged (85% of the section changed)

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lose part or all of your investment.

of Significant Risks Affecting Our Company

significant risks may be summarized as follows:

have a limited operating history on which to judge our performance and assess our prospects for future success.

may not succeed in selling and distributing syringes.

business may be affected by changes in the health care regulatory environment.

are dependent on our management;

without whose services our business operations could cease.

have recently adopted a digital asset treasury strategy with a focus on SOL, and we may be unable to successfully implement this

new strategy.

further development and acceptance of Solana and other cryptocurrency networks, which represent a relatively new and rapidly changing

industry, are subject to a variety of factors that are difficult to evaluate.

The slowing or stopping of the development or acceptance of Solana and other cryptocurrency networks may adversely

affect an investment in us.

digital asset trading platforms on which cryptocurrency trades are relatively new and largely unregulated or may not be complying

with existing regulations.

shift towards a SOL-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational

technologies are based on theoretical conjectures as to the impossibility of solving certain cryptographical puzzles quickly.

premises may be incorrect or may become incorrect due to technological advances.

of interest may arise with our Consultant and Strategic Advisor that may adversely affect our operations.

we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our

SOL, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our

SOL and our financial condition and results of operations could be materially adversely affected.

stock price may be volatile, and the value of our common stock may decline.

shares will be subject to potential delisting if we do not maintain the listing requirements of the Nasdaq Capital Market.

are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable

to emerging growth companies will make our common stock less attractive to investors.

Related to Our Technology, Business, and Industry

are an early-stage company with a history of losses.

incurred net losses of $9,296,202 and $9,841,638 for the year ended December 31, 2024 and 2023, respectively.

We have not generated any revenue

to date, and we had an accumulated deficit of $34,445,206 as of December 31, 2024.

We have developed our Sharps product line but there can be no

assurance that it will be commercially successful.

Our potential profitability is dependent upon a number of factors, many of which are

beyond our control.

incurred net losses of $282.5 million and $9.3 million for the years ended December 31, 2025 and 2024, respectively.

accumulated deficit of $316.9 million as of December 31, 2025.

There can be no assurance that we will be commercially successful in selling and distributing syringes.

Our shift towards a SOL-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant

operational risks.

Our potential profitability is dependent upon a number of factors, many of which are beyond our

we are unable to achieve and sustain profitability, the value of our business and common stock may significantly decrease.

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have a limited operating history, and we may not succeed.

We have commercialized our Securgard syringe products in mid 2023 yet no revenues

have occurred and have not yet commercialized our Sharps Provensa products.

You should consider, among other factors, our prospects for

success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages.

For example, unanticipated

expenses, problems, and technical difficulties may occur and they may result in material challenges to our business.

We may not be able

to successfully address these risks and uncertainties or successfully implement our operating strategies.

If we fail to do so, such failure

could have a material adverse effect on our business, financial conditions and results of operation.

We may never generate significant

revenues or achieve profitability.

may not succeed in commercializing Sharps Provensa products or any future product.

may face difficulties or delays in the commercialization of Sharps Provensa or other future products, which could result in our

inability to timely offer such products or services.

We formerly manufactured and commercialized syringe products and now solely sell and distribute them, with

only limited revenues.

You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered

by companies that, like us, are in their early stages.

For example, unanticipated expenses, problems, and technical difficulties may

occur and they may result in material challenges to our business.

We may not be able to successfully address these risks and uncertainties

or successfully implement our operating strategies.

If we fail to do so, such failure could have a material adverse effect on our business,

financial conditions and results of operation.

We may never generate significant revenues or achieve profitability.

may not succeed in selling and distributing syringes.

may face difficulties or delays in selling and distributing syringes, which could result in our inability to timely offer such

products or services.

We may, for example, encounter difficulties due to:

inability to adequately market our products;

inability to effectively scale manufacturing as needed to maintain an adequate commercial supply of our products;

inability to attract and retain skilled support team, marketing staff and sales force necessary to increase the market for our products

and to maintain market acceptance for our products;

difficulty of establishing brand recognition and loyalty for our products.

In addition, to increase our production capacity, we will need to build

inventory, which will require that we purchase certain additional equipment, including molding machines and molds.

We have had no revenues

We have recently entered into supply and sales agreements for our Securegard

and Sologard products.

Even if we succeed in building inventory and increasing our production capacity, there is no assurance as to the

timing of orders for our products or any future products.

inability to adequately market syringes or other medical devices and our inability to enter into one or more agreements on commercially

reasonable terms to act as a third-party sales agent for medical device manufacturers;

inability to attract and retain skilled support team, marketing staff and sales force necessary to sell and distribute syringes.

may encounter significant competition and may not be able to successfully compete.

are many medical device companies offering safety syringes, and more competitors are likely to arrive.

are many medical device companies offering safety syringes and other medical devices, and more competitors are likely to arrive.

Some of our competitors have

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As a result, we may not be able to successfully compete in our market, which could

result in our failure to successfully commercialize Sharps disposable syringe products or otherwise fail to successfully compete.

anticipate that our major domestic competitors will include Retractable Technologies, Inc., Becton, Dickinson & Company,

Medtronic Minimally Invasive Therapies, (“Medtronic,” formerly known as Covidien), Terumo Medical Corp., Smiths Medical,

There can be no assurances that we will be able to compete successfully in this environment.

are vulnerable to new technologies.

we have a narrow focus on particular product lines and technology (currently, safety needle products), we are vulnerable to the development

of superior or similar competing products and to changes in technology which could eliminate or reduce the need for our products.

a superior or similar technology is created, the demand for our products could be adversely affected.

result in our failure to successfully sell and distribute syringes.

There can be no assurances that we will be able to compete

successfully in this environment.

are subject to product liability risk.

a manufacturer and provider of safety needle products, we will face an inherent business risk of exposure to product liability claims.

Additionally, our success will depend on the quality, reliability, and safety of our products and defects in our products could damage

our reputation.

If a product liability claim is made and damages are in excess of our product liability coverage (which is currently

$5 million, and which we may increase as we commence and increase sales of our products), our competitive position could be weakened

by the amount of money we could be required to pay to compensate those injured by our products.

In the event of a recall, we have recall

a provider of safety needle products and potentially other medical devices in the future, we may face an inherent business risk of

exposure to product liability claims.

Additionally, our success will depend on the quality, reliability, and safety of our products

and defects in our products could damage our reputation.

If a product liability claim is made and damages are in excess of our

product liability coverage, our competitive position could be weakened by the amount of money we could be required to pay to

compensate those injured by our products.

In the event of a recall, we have recall insurance.

business may be affected by changes in the health care regulatory environment.

and internationally, government authorities may enact changes in regulatory requirements, reform existing reimbursement programs,

and/or make changes to patient access to health care, all of which could adversely affect the demand for our products and/or put downward

pressure on our prices.

and internationally, government authorities may enact changes in regulatory requirements, reform existing reimbursement

programs, and/or make changes to patient access to health care, all of which could adversely affect the demand for syringes and

medical devices and/or put downward pressure on our prices.

Future healthcare rulemaking could affect our business.

We cannot predict the timing or impact of any future

rulemaking or changes in the law.

approval process for medical device products outside the United States varies among countries and may limit our ability to develop, manufacture

and sell our products internationally.

Failure to obtain marketing and regulatory approval in international jurisdictions would prevent

our products from being marketed abroad.

order to market and sell products, other than Securgard or Sologard, and any additional medical device products we may develop in the future in the European

Union and many other jurisdictions, we, and our collaborators, must obtain separate marketing approvals and comply with numerous and

varying regulatory requirements.

We have not yet received approval or clearance to sell our products in any jurisdiction outside the

United States.

The approval procedure varies among countries and may involve additional testing.

We may conduct clinical trials for,

and seek regulatory approval to market, our product candidates in countries other than the United States.

If we or our collaborators

seek marketing approval for a product candidate outside the United States, we will be subject to the regulatory requirements of health

authorities in each country in which we seek approval.

With respect to marketing authorizations in Europe, we will be required to submit

a European Marketing Authorization Application, or MAA, to the European Medicines Agency, or EMA, which conducts a validation and scientific

approval process in evaluating a product for safety and efficacy.

The approval procedure varies among regions and countries and may involve

additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval or clearance.

marketing approval or clearance by the FDA does not ensure approval or clearance by the health authorities of any other country.

regulation of our products may limit how we market our products, which could materially impair our ability to generate revenue.

or clearance of a medical device product may carry conditions that limit the market for the product or put the product at a competitive

disadvantage relative to alternative products.

For instance, a regulatory approval or clearance may limit the indicated uses for which

we can market a product or the patient population that may utilize the product.

These restrictions could make it more difficult to market

any product effectively.

Accordingly, we expect to continue to expend time, money and effort in all areas of regulatory compliance.

predict the timing or impact of any future rulemaking or changes in the law.

are dependent on our management;

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prospects may be materially adversely affected.

care crises could have an adverse effect on our business.

during 2020, several states and local jurisdictions imposed, and others in the future may impose, “shelter-in-place” orders,

quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19.

the manufacturing facility we operate continued to operate during the 2020-2021 COVID-19 pandemic due to its status as an essential business,

we cannot guarantee that the situation would be the same for any future pandemic.

In the future, we may elect or be required to close

temporarily which would result in a disruption in our activities and operations.

Our supply chain, including transportation channels,

may be impacted by any such restrictions as well.

Any such disruption could impact our sales and operating results.

health crises also negatively affect economies which could affect demand for our products.

While we plan to market our Sharps smart safety

syringe products for use for injecting medicines as well as Covid-19 and other vaccines, in the event of a resurgence of COVID-19 or

in the case of any future pandemic, there is no guarantee that revenues from syringes needed for vaccines would offset the effects to

our business in a global economic decline.

systems and other healthcare providers in our markets that provide procedures that may use our products have suffered financially and

operationally and may not be able to return to pre-pandemic levels of operations.

Travel and import restrictions may also disrupt our

ability to manufacture or distribute our devices.

Any import or export or other cargo restrictions related to our products, or the raw

materials used to manufacture our products could restrict our ability to manufacture and ship products and harm our business, financial

condition, and results of operations.

key personnel and other employees could still be affected by any future pandemic, which could affect our ability to operate efficiently.

business may be adversely affected by uncertainties in obtaining and enforcing intellectual property rights.

believe our main competitive strength is our technology, including patent protection and trade secrets relating to the manufacture and

design of our products.

We are dependent on patent rights to prevent unlawful copying of our products, and if the patent rights are invalidated

or circumvented, our business would be adversely affected.

We consider patent protection to be of material importance in the design,

development, and marketing of our products.

patent pending applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from

commercially exploiting products similar to ours.

have four issued utility patents, two pending patent applications in the United States, and four PCT (Patent Cooperation Treaty)

patent application.

We cannot be certain that we are the first inventor of the subject matter to which we have filed a particular

patent application, or if we are the first party to file such a patent application.

If another party has filed a patent application

to the same subject matter as we have, we may not be entitled to the protection sought by the patent application.

Further, the scope

of protection of issued patent claims is often difficult to determine.

As a result, we cannot be certain that the patent

applications that we file will issue, or that our issued patents will be broad enough to protect our proprietary rights or otherwise

afford protection against competitors with similar technology.

In addition, the issuance of a patent is not conclusive as to its

inventorship, scope, validity or enforceability.

Our competitors may challenge or seek to invalidate our issued patents, or design

around our issued patents, which may adversely affect our business, prospects, financial condition or operating results.

costs associated with enforcing patents, confidentiality and invention agreements, or other intellectual property rights may make

aggressive enforcement impracticable.

distribution and sale by third parties of counterfeit versions of our products could have a negative impact on us.

parties may illegally distribute and sell counterfeit versions of our products which do not meet our rigorous manufacturing and testing

Our reputation and business could suffer harm as a result.

Related to Our Securities

common stock could be subject to extreme volatility.

trading price of our common stock may be affected by a number of factors, including events described in the risk factors set forth in

this annual report, as well as our operating results, financial condition and other events or factors.

In addition to the uncertainties

relating to future operating performance and the profitability of operations, factors such as variations in interim financial results

or various, as yet unpredictable, factors, many of which are beyond our control, may have a negative effect on the market price of our

common stock.

In recent years, broad stock market indices, in general, and smaller capitalization companies, in particular, have experienced

substantial price fluctuations.

In a volatile market, we may experience wide fluctuations in the market price of our common stock and

wide bid-ask spreads.

These fluctuations may have a negative effect on the market price of our common stock.

In addition, the securities

market has, from time to time, experienced significant price and volume fluctuations that are not related to the operating performance

of particular companies.

These market fluctuations may also materially and adversely affect the market price of our common stock.

Related to Ownership of Our Common Stock

price of our Common Stock has been and may continue to be volatile and fluctuate substantially, which could result in substantial losses

for purchasers of our Common Stock.

stock price has been and is likely to continue to be volatile.

The stock market in general has experienced extreme volatility that has

often been unrelated to the operating performance of particular companies.

With the adoption of our new SOL Treasury Policy, we expect

to see additional volatility.

a result of this volatility, you may not be able to sell your Common Stock.

The market price for our Common Stock may be influenced by

many factors, including:

SOL Treasury Policy;

success of competitive products, services or technologies;

or legal developments in the United States and other countries;

recruitment or departure of key personnel;

or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

in our financial results or those of companies that are perceived to be similar to us;

economic, industry and market conditions.

financial results and the market price of our Common Stock may be affected by the prices of SOL.

As part of our capital allocation strategy for assets that are not required

to provide working capital for our ongoing operations, we have invested and will continue to invest in SOL.

As of the date of this filing,

we hold approximately 2,000,000 SOL, including staking rewards.

The prices of SOL have historically been subject to dramatic price

fluctuations and are highly volatile.

Moreover, digital assets, such as SOL, are relatively novel and the application of securities laws

and other regulations to such assets is unclear in many respects.

It is possible that regulators may interpret laws in a manner that adversely

affects the liquidity or value of SOL.

In addition, because our Treasury Policy is currently primarily concentrated in SOL, adverse developments

specific to Solana, including protocol-level failures, governance decisions, validator network instability, or ecosystem contraction,

could disproportionately impact our financial condition.

decrease in the fair value of SOL below our carrying value for such assets could require us to incur a loss due to the decrease in fair

market value, and such charge could be material to our financial results for the applicable reporting period, which may create significant

volatility in our reported earnings.

Any decrease in reported earnings or increased volatility of such earnings could have a material

adverse effect on the market price of our Common Stock.

In addition, the application of generally accepted accounting principles in the

United States, with respect to SOL, may change in the future and could have a material adverse effect on our financial results and the

market price of our Common Stock.

addition, if investors view the value of our Common Stock as dependent upon or linked to the value or change in the value of our SOL

holdings, the price of SOL may significantly influence the market price of our Common Stock.

securities analysts do not publish research or reports about our business or if they publish negative, or inaccurate, evaluations of

our Common Stock, the price of our stock and trading volume could decline.

trading market for our Common Stock may be impacted, in part, by the research and reports that securities or industry analysts publish

about us or our business, including our SOL Treasury Policy.

There can be no assurance that analysts will cover us, continue to cover

us or provide favorable coverage.

If one or more analysts downgrade our Common Stock or change their opinion of our Common Stock, our

share price may decline.

In addition, if one or more analysts cease coverage of us or fail to regularly publish reports on us, we could

lose visibility in the financial markets, which could cause our share price or trading volume to decline.

have never paid common stock dividends and have no plans to pay dividends in the future, as a result our common stock may be less valuable

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public market for our shares and make obtaining future debt or equity financing more difficult for us.

Specifically, as disclosed in

a Current Report filed on Form 8-K on July 16, 2023, the Company had received a notice (the “Notice”) from the staff of the

Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company

that it was not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Rule”) because it failed to maintain a minimum bid

price of $1.00 over the previous 30 consecutive business days dated May 26, 2023 to July 11, 2023.

The Rules provide the Company a compliance

period of 180 calendar days in which to regain compliance.

If at any time during this 180 day period the closing bid price of the Company’s

security is at least $1 for a minimum of ten (10) consecutive business days, the Staff will provide written confirmation of compliance

and this matter will be closed.

January 16, 2024, the Staff determined that the Company is eligible for an additional 180 calendar day period, or until July 8, 2024,

to regain compliance.

On October 7, 2024, the Company held a Special Meeting of its stockholders.

The Company’s stockholders approved

a proposal to authorize the Company’s Board in its discretion at any time within one year after stockholder approval is obtained,

to amend the Company’s Articles of Incorporation to effect a reverse stock split of shares of the Company’s common stock,

at a ratio with a range of 1-for-8 to 1 for 22, with the exact ratio to be determined by the Company’s Board.

The Board approved

the 1 for 22 reverse stock split on October 7, 2024 which went into effect on October 16, 2024.

Nasdaq notified the Company on November

13, 2024 that the Company regained compliance on November 5, 2024 with Listing Rule 5550(a)(2), (the “Bid Price Rule”).

On March 12, 2025, Sharps

Technology, Inc.

(the “ Company ”), was notified by the staff (the “ Staff ”) of The Nasdaq Stock Market,

LLC (“ Nasdaq ”) that it was not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule

5550(a)(2) for continued listing on The Nasdaq Capital Market as the bid price of its securities had closed at less than $1.00 per share

over the previous 30 consecutive business days.

Normally, a company would be afforded a 180-calendar day period to demonstrate compliance

with the rule.

However, pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv), the Company is not eligible for any compliance period due to

the fact that the Company has effected a reverse stock split over the prior one-year period or has effected one or more reverse stock

splits over the prior two-year period with a cumulative ratio of 250 shares or more to one.

The Company’s

securities will be delisted from the Nasdaq Capital Market unless the Company requests a hearing and appeals Nasdaq’s determination.

Accordingly, the Company filed a hearing request before the deadline which will automatically stay the delisting and suspension

of the Company’s securities pending the decision of the Nasdaq Hearings Panel (the “ Panel ”).

At the hearing,

the Company intends to present its views and its plans to regain compliance with the minimum bid price rule to the Panel.

no assurance that the Company will be able to evidence compliance with the minimum bid price rules or any other applicable requirements

for continued listing on The Nasdaq Capital Market prior to the hearing.

In the interim, the Company expects its common stock and warrants

will remain listed on Nasdaq under its existing symbols, “STSS” and “STSSW” while it awaits the hearing

Staff’s determination is based on the Company meeting the continued listing requirement for market value of publicly held

shares and all other applicable requirements for initial listing on the Capital Market with the exception of the bid price

requirement, and the Company’s written notice of its intention to cure the deficiency by effecting a reverse stock split, if

However, if it appears to the Staff that the Company will not be able to cure the deficiency, the Staff will provide

notice that its securities will be subject to delisting.

The Company will continue to monitor the closing bid price of its Common

Stock and will consider its available options to resolve the deficiency and regain compliance with the Minimum Bid Price Requirement

within the allotted compliance period.

There can be no assurance that the Company will regain compliance with the Minimum Bid Price

will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time

to compliance with our public company responsibilities and corporate governance practices.

a public company, we will incur significant legal, accounting and other expenses, which we expect to further increase after we are no

longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act,

the listing requirements of the Nasdaq Capital Market, and other applicable securities rules and regulations impose various requirements

If our stock price falls

below $1.00 for 30 consecutive days it may be difficult for us to regain compliance with the minimum bid price as we may not be

eligible for an extended compliance period as a result of either effecting a reverse stock split within the last year or multiple reverse stock splits over the prior two-year period with a cumulative ratio of at least 250 shares to one.

incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance

with our public company responsibilities and corporate governance practices.

a public company, we incur significant legal, accounting and other expenses, which we expect to further increase after we are no longer

an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the

listing requirements of the Nasdaq Capital Market, and other applicable securities rules and regulations impose various requirements

on public companies.

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result, the value of our common stock.

are required for 2023 and after, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things,

the effectiveness of our internal control over financial reporting as of the end of the fiscal year that coincides with the filing

of our annual report on Form 10-K.

This assessment will need to include disclosure of any material weaknesses identified by

our management in our internal control over financial reporting.

In addition, our independent registered public accounting firm may

be required to attest to the effectiveness of our internal control over financial reporting in our first annual report required to

be filed with the SEC following the date we are no longer an “emerging growth company.” We have commenced the costly and

time-consuming process of compiling the system and processing documentation necessary to perform the evaluation needed to comply

with Section 404, and we expect to be able to complete our evaluation, testing and any required remediation in a timely fashion.

compliance with Section 404 will require that we incur substantial expenses and expend significant management efforts.

do not have an internal audit group, and we in the future we may need to hire additional accounting and financial staff with

appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary

to perform the evaluation needed to comply with Section 404.

are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness

of our internal control over financial reporting as of the end of the fiscal year that coincides with the filing of our annual report

on Form 10-K.

This assessment will need to include disclosure of any material weaknesses identified by our management in our internal

control over financial reporting.

In addition, our independent registered public accounting firm may be required to attest to the effectiveness

of our internal control over financial reporting in our first annual report required to be filed with the SEC following the date we are

no longer an “emerging growth company.” We have commenced the costly and time-consuming process of compiling the system and

processing documentation necessary to perform the evaluation needed to comply with Section 404, and we expect to be able to complete

our evaluation, testing and any required remediation in a timely fashion.

Our compliance with Section 404 will require that we incur

substantial expenses and expend significant management efforts.

We currently do not have an internal audit group, and we in the future

we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge

and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404.

current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.

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Almost all of our outstanding shares are available to be sold in the open market under Rule 144

or because they have been registered under the Securities Act We have also registered shares of our common stock for sale into the public

market ,which are issuable upon the exercise of warrants, by certain selling stockholders named therein.

or because they have been registered under the Securities Act.

We have also registered shares of our common stock for sale into the public

market, which are issuable upon the exercise of warrants.

These shares represent a large

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has the authority to issue up to 1,000,000 shares of our preferred stock without further stockholder approval.

1 share of preferred stock

is designated Series A Preferred Stock and is outstanding.

Our board of directors could authorize the creation of additional series of

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of our common stock or result in dilution to our existing stockholders.

Future securities issuances

could result in significant dilution to our stockholders and impair the market price of our common stock.

Future issuances of shares

of our common stock could depress the market price of our common stock and result in dilution to existing holders of our common stock.

Also, to the extent outstanding options and warrants to purchase our shares of our common stock are exercised or options or other equity-based

awards are issued or become vested, there will be further dilution.

The amount of dilution could be substantial depending upon the size

of the issuances or exercises.

Furthermore, we may issue additional equity securities that could have rights senior to those of our common

stock offerings in the future may dilute then-existing shareholders’ percentage ownership of the Company.

our plans and expectations that we will need additional capital and personnel, we anticipate that we will need to issue additional shares

of common stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible

notes, stock options or warrants.

The issuance of additional securities in the future will dilute the percentage ownership of then current

stockholders.

securities issuances could result in significant dilution to our stockholders and impair the market price of our common stock.

issuances of shares of our common stock could depress the market price of our common stock and result in dilution to existing holders

of our common stock.

Also, to the extent outstanding options and warrants to purchase our shares of our common stock are exercised or

options or other equity-based awards are issued or become vested, there will be further dilution.

The amount of dilution could be substantial

depending upon the size of the issuances or exercises.

Furthermore, we may issue additional equity securities that could have rights

senior to those of our common stock.

are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable

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as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

Related to Our Digital Asset Trading Strategy and Cryptocurrencies

further development and acceptance of Solana and other cryptocurrency networks, which represent a relatively new and rapidly changing

industry, are subject to a variety of factors that are difficult to evaluate.

The slowing or stopping of the development or acceptance

of Solana and other cryptocurrency networks may adversely affect an investment in us.

Cryptocurrency

networks and chains are a new and rapidly evolving industry of which Solana is a prominent, but not unique, part.

The growth of Solana

and the cryptocurrency industry is subject to a high degree of uncertainty.

The factors affecting the further development of Solana and

the cryptocurrency industry include:

worldwide growth in the adoption and use of SOL and other cryptocurrencies, including those competitive with SOL;

and quasi-government regulation of SOL and other cryptocurrencies and their use, or restrictions on or regulation of access to and

operation of Solana or similar cryptocurrency systems;

maintenance and development of the open-source software protocol of Solana;

in consumer demographics and public tastes and preferences;

availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat

economic conditions and the regulatory environment relating to cryptocurrencies and cryptocurrency service providers.

decline in the popularity or acceptance of Solana and other cryptocurrency networks may harm the price of our Common Stock.

no assurance that Solana or the service providers necessary to accommodate it will continue in existence or grow.

Furthermore, there

is no assurance that the availability of and access to cryptocurrency service providers will not be negatively affected by government

regulation or supply and demand of Solana.

digital asset trading platforms on which cryptocurrency trades are relatively new and largely unregulated or may not be complying with

existing regulations.

digital asset trading platforms through which SOL and other cryptocurrencies trade are new and largely unregulated or may not be complying

with existing regulations.

These markets are local, national and international and include a broadening range of cryptocurrencies and

participants.

Significant trading may occur on systems and platforms with minimum predictability.

Spot markets may impose daily, weekly,

monthly or customer-specific transaction or withdrawal limits or suspend withdrawals entirely, rendering the exchange of SOL for fiat

currency difficult or impossible.

Participation in spot markets requires users to take on credit risk by transferring SOL from a personal

account to a third-party’s account.

asset trading platforms do not appear to be subject to, or may not comply with, regulation in a manner similar to other regulated trading

platforms, such as national securities exchanges or designated contract markets.

Many digital asset trading platforms are unlicensed,

are unregulated, operate without extensive supervision by governmental authorities, and do not provide the public with significant information

regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance.

In particular, those

located outside the United States may be subject to significantly less stringent regulatory and compliance requirements in their local

jurisdictions.

Digital asset trading platforms may be out of compliance with existing regulations.

to detect and deter fraudulent or manipulative trading activities (such as market manipulation, front-running of trades, and wash-trading)

may not be available to or employed by digital asset trading platforms or may not exist at all.

As a result, the marketplace may lose

confidence in, or may experience problems relating to, these venues and the digital assets that trade on these venues.

digital asset trading platform on which cryptocurrency trades is immune from these risks.

The closure or temporary shutdown of digital

asset trading platforms due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in

cryptocurrency and can slow down the mass adoption of it.

Further, digital asset trading platform failures can have an adverse effect

on cryptocurrency markets and the price of cryptocurrency and could therefore have a negative impact on the performance of the Common

perception, a lack of stability in the digital asset trading platforms, manipulation of cryptocurrency trading platforms by customers

and/or the closure or temporary shutdown of such trading platforms due to fraud, business failure, hackers or malware, or government-mandated

regulation may reduce confidence in cryptocurrency generally and result in greater volatility in the market price of SOL and other cryptocurrency

and the Common Stock.

Furthermore, the closure or temporary shutdown of a cryptocurrency trading platform may impact our ability to determine

the value of our cryptocurrency holdings.

may be unable to successfully implement our digital asset treasury strategy with a focus on SOL.

have adopted our Treasury Policy primarily dedicated to SOL, including potential investments in SOL, including through staking

and other decentralized finance activities.

There is no assurance that we will be able to successfully implement this strategy or

operate SOL-related activities at the scale or profitability currently anticipated.

Solana operates with a proof-of-stake consensus mechanism,

which differs significantly from bitcoin’s Proof-of-Work mining mechanism.

This strategic shift requires specialized employee skillsets

and operational, technical and compliance infrastructure to support SOL and related staking activities.

This also requires that we implement

different security protocols, and treasury management practices.

Further, there is ongoing scrutiny and limited formal guidance from

regulatory agencies, including Nasdaq and the SEC, with respect to the treatment of public company cryptocurrency strategies.

no assurance that we will be able to execute this strategy by building out the needed infrastructure within the timeframe that we currently

Errors by key management could result in significant loss of funds and reduced rewards.

As a result, our shift towards SOL

could have a material adverse effect on our business and financial condition.

shift towards a SOL-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational

shift towards a SOL-focused strategy, including staking and other decentralized finance activities, exposes us to significant

operational risks.

SOL’s proof-of-stake consensus mechanism requires that we operate validator nodes, delegate SOL to other

validator service operators and employ secure key management to generate yield from our SOL.

It also requires that we maintain

constant up time to ensure that we are eligible for staking rewards and to avoid penalties.

In addition, the SOL ecosystem rapidly

evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup.

and protocol changes may require that we incur unanticipated costs and could cause temporary service disruptions.

We may also need

to employ third-party service providers in our operations, which may introduce risks outside of our control, including significant

cybersecurity risks.

Any of these operational risks could materially and adversely affect our ability to execute our SOL strategy,

prevent us from realizing positive returns and severely hurt our financial condition.

concentration in a single digital asset exposes us to unique liquidity risks that may prevent us from converting SOL into fiat currency

or other assets when desired, particularly during periods of market stress.

in digital asset markets can quickly deteriorate in response to negative news, regulatory scrutiny, or systemic events affecting exchanges

or stablecoins.

In the event of a market-wide liquidity crunch, we may be unable to sell, stake, or otherwise monetize our SOL holdings

at prevailing quoted prices—or at all—without significantly affecting the market price of SOL.

Limited liquidity may also

impair our ability to fund working-capital needs, repay indebtedness, or pursue acquisition opportunities, any of which could have a

material adverse effect on our business, financial condition, and prospects.

disruption of the Internet may affect the operation of the cryptocurrency networks, which may adversely affect the cryptocurrency industry

and an investment in us.

Cryptocurrency

networks rely on the Internet.

A significant disruption of Internet connectivity could disrupt cryptocurrency networks’ functionality

until such disruption is resolved.

A disruption in the Internet could adversely affect an investment in us.

In particular, some variants

of cryptocurrencies have experienced a number of denial-of-service attacks, which have led to temporary delays in block creation and

cryptocurrency transfers.

Cryptocurrencies

are also susceptible to border gateway protocol hijacking (“BGP hijacking”).

Such an attack can be a very effective way for

an attacker to intercept traffic en route to a legitimate destination.

BGP hijacking impacts the way different nodes are connected to

one another to isolate portions of them from the remainder of the network, which could lead to a risk of the network allowing double-spending

and other security issues.

If BGP hijacking occurs on any cryptocurrency network, participants may lose faith in the security of cryptocurrency,

which could affect cryptocurrency’s value and consequently the value of the Common Stock.

Internet failures or Internet connectivity-related attacks that impact the ability to transfer cryptocurrency could have a material adverse

effect on the price of cryptocurrency and the value of an investment in us.

technologies are based on theoretical conjectures as to the impossibility of solving certain cryptographical puzzles quickly.

These premises

may be incorrect or may become incorrect due to technological advances.

technologies are premised on theoretical conjectures as to the impossibility, in practice, of solving certain mathematical problems quickly.

Those conjectures remain unproven, however, and mathematical or technological advances could conceivably prove them to be incorrect.

Blockchain technology companies may also be negatively affected by cryptography or other technological or mathematical advances, such

as the development of quantum computers with significantly more power than computers presently available, that undermine or vitiate the

cryptographic consensus mechanism underpinning the Solana network and other distributed ledger protocols.

If either of these events were

to happen, markets that rely on blockchain technologies could quickly collapse, and an investment in our Common Stock may be adversely

shortcomings or defects in the Solana network, including changes to its validator structure, governance model, or core software, could

diminish the utility and value of SOL and harm our business.

Solana network is a public, open-source blockchain protocol that is not under our control.

Its ongoing viability depends on the continued

consensus and cooperation of independent developers, validators, node operators, and other ecosystem participants.

If the Solana network

experiences a successful cyber-attack, a material software bug, a “hard fork” that fragments the network, or a prolonged

outage, market confidence in SOL could be severely undermined.

Similarly, decisions by influential validators to adopt protocol changes,

modify transaction-fee structures, or alter burn practices or network governance could adversely affect SOL’s economics and, therefore,

the value of our holdings.

validators exit the Solana network, it could increase the likelihood of a malicious actor obtaining control.

exiting the network could make Solana more vulnerable to a malicious actor obtaining control other network, which

might enable them to manipulate the Solana network by censoring or manipulating specific transactions.

If the Solana network suffers

such an attack, the price of SOL could be negatively affected, and a loss of confidence in the Solana network could result.

Any reduction

in confidence in the transaction confirmation process or staking power of the Solana network may adversely affect an investment in the

Common Stock.

face risks relating to the potential compromise of the Solana network and other cryptocurrencies’ network security by emerging

technologies, including artificial intelligence and quantum computing, which may materially and adversely impact our operations and financial

security and integrity of Solana and other cryptocurrencies’ network are fundamentally dependent on the robustness of its cryptographic

SOL and other cryptocurrencies’ protocol relies heavily on public key cryptography and hashing algorithms to secure

transactions, safeguard private keys, and prevent double-spending.

Advances in emerging technologies, particularly artificial intelligence

(“AI”) and quantum computing may pose significant risks to Solana and other cryptocurrencies’ network’s security

and operational stability.

computing, in particular, presents a long-term threat to the cryptographic assumptions underpinning SOL and other cryptocurrencies.

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

blockchain, such as elliptic curve digital signature algorithms (ECDSA).

A sufficiently powerful quantum computer could potentially reverse-engineer

private keys from public addresses or compromise the blockchain’s consensus mechanism, leading to the theft of digital assets,

double-spending, and other forms of fraud.

Although current quantum computing capabilities are not yet at this level, advancements in

quantum technologies could materialize more rapidly than anticipated, creating significant systemic risks for the Solana network.

may also pose security risks.

AI-driven cyberattacks, including advanced phishing schemes, autonomous malware, and intelligent

blockchain analysis tools, could increase the sophistication and success rate of attacks targeting SOL and other cryptocurrencies’

users, exchanges, custodians, and node operators.

The use of AI to exploit vulnerabilities in software, mining hardware, or network protocols

could threaten the stability and reliability of the Solana and other cryptocurrencies’ ecosystems.

can be no assurance that SOL and other cryptocurrencies’ current cryptographic safeguards will be sufficient to protect against

future technological advances.

While research and development efforts are ongoing to develop quantum-resistant cryptographic protocols,

the Solana and other cryptocurrencies’ networks may face challenges in adopting such technologies at scale, particularly given

their decentralized governance structure.

Any successful attack or perceived vulnerability arising from AI or quantum computing could

materially and adversely affect the price, liquidity, and adoption of SOL and other cryptocurrencies and could negatively impact our

business, financial condition and results of operations.

trading prices of many digital assets, including SOL, have experienced extreme volatility in recent periods and may continue to do so.

Extreme volatility in the future, including further declines in the trading prices of SOL, could have a material adverse effect on the

value of the Common Stock.

trading prices of many digital assets, including SOL, have experienced extreme volatility in recent periods and may continue to do so,

including as a result of shifts in market sentiment, speculative trading, macroeconomic trends, technology-related disruptions, and regulatory

announcements.

Digital asset trading markets, including the Solana network, are relatively new, largely unregulated, and, at times, subject

to limited liquidity.

As a result, trading activity on or reported by these digital asset trading platforms, including SOL, is generally

significantly less regulated than trading in regulated U.S.

securities and commodities markets and may reflect behavior that would be

prohibited in regulated U.S.

trading venues.

Furthermore, many digital asset trading platforms lack certain safeguards put in place by

more traditional exchanges to enhance the stability of trading on the platform.

The digital asset markets may also be experiencing a

bubble or may experience a bubble in the future, which may undermine confidence and affect liquidity of the digital asset markets.

rapid decrease in the price of SOL—whether as a result of negative perception, a lack of stability in the digital asset trading

platforms, market manipulation of cryptocurrency trading platforms by customers, a cyber-security incident, regulatory action, or other

factors—could materially reduce the value of any SOL we hold, force us to recognize impairment charges, trigger defaults or covenant

breaches in any future financing arrangements, and could have a material adverse effect on the value of our Common Stock that may result

in the loss of all or substantially all of its value.

management may invest or otherwise use the proceeds of any offering by us in ways with which you may not agree or in ways that may not

yield a return.

management will have broad discretion in the application of the net proceeds from any offering by us and could use the proceeds in ways

that do not improve our results of operations or enhance the value of our Common Stock.

The failure by our management to apply these

funds effectively could result in financial losses that could cause the price of our Common Stock to decline.

we lose key personnel, including our Chief Investment Officer, Consultant and Strategic Advisor, or if we fail to recruit additional

highly skilled personnel, our ability to operate and manage our digital asset treasury strategy will be impaired.

ability to operate and manage our digital asset treasury strategy depends upon our ability to attract and retain highly qualified personnel,

including our Chief Investment Officer and members of our executive team, and other key personnel, including the Consultant and Strategic

The loss of the services of any of our executive officers, key employees, and the Consultant and Strategic Advisor, and our

inability to find suitable replacements, could result in significant disruption in our operations and management of our digital assets.

our efforts to retain valuable members of our management, employees and consultants, such key personnel may terminate their

employment with us on short notice.

Although we have agreements with our key employees and consultants, these agreements provide for

at-will employment, which means that any of our employees or consultants could leave our employment at any time, with or without

We do not currently maintain “key man” insurance policies on any of our employees or consultants.

of interest may arise with our Consultant and Strategic Advisor that may adversely affect our operations.

Edge Limited, our Consultant, and Sol Markets, our Strategic Advisor, are each a related party and both wholly-owned and controlled

by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and director.

Zhang’s husband Jason Hu was until

recently a senior member of the team at the Consultant that manages our digital assets.

Additionally, each of Ms.

Danner, our Executive Chairman, and our Principal Financial Officer, sit on our Treasury Oversight Committee.

The Treasury Oversight

Committee has direct oversight over the Consultant and Strategic Advisor.

The Consultant will have a material influence on the operation and management of our digital asset treasury strategy

by providing consulting and related services to us with respect to our Treasury Policy.

The Strategic Advisor will have a material influence

on the future partnerships, marketing and general business activities of the Company by providing strategic advice and guidance relating

to our business, operations, growth initiatives and industry trends in the crypto technology sector.

may not negotiate or enforce contractual terms as aggressively with our Consultant and our Strategic Advisor as we might with an unrelated

party, and the commercial terms of our agreements may be less favorable than we might obtain in negotiations with third parties.

business dealings with our Consultant and our Strategic Advisor are not as favorable to us as arms-length transactions, our results of

operations may be harmed.

our Strategic Advisor has received warrants to purchase shares of our Common Stock.

This equity interest may also create actual or potential

conflicts of interest, as their decisions could be influenced by their ownership interests rather than solely by the best interests of

us or our stockholders.

There is no assurance that such conflicts will be resolved in our favor, and any failure to manage these conflicts

could adversely affect our business, financial condition, and reputation.

we are unable to raise additional capital on acceptable terms, our ability to implement and sustain our Treasury Policy may be compromised.

strategy contemplates the discretionary purchase of SOL and related yield-generating instruments.

The capital required to acquire, stake,

and actively manage SOL may exceed our existing cash resources and cash flows from operations.

Market conditions, our share price performance,

the volatility of digital assets, and regulatory uncertainties could impair our ability to access debt or equity capital on terms acceptable

to us, or at all.

Failure to obtain necessary financing could force us to curtail or abandon our digital asset strategy, which could

materially harm our growth prospects and the value of our securities.

SOL 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, a developing

regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges,

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

During times of market instability,

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

Further, SOL we hold with our custodians and transact with our trade

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

subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Although our qualified

custodians segregate our assets and do not rehypothecate client holdings, SOL maintained at non-qualified venues may be subject to rehypothecation

or counterparty credit risk.

The failure of such venues could result in partial or total loss of assets held there.

Additionally, we may

be unable to enter into term loans or other capital raising transactions collateralized by our SOL or otherwise generate funds using our

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

a certain portion of our SOL are under a programmatic lockup from the FTX estate (“locked SOL”), and we may continue to acquire

locked SOL at a discount to market prices of unlocked SOL in order to generate value for stockholders.

These locked SOL are significantly

less liquid than cash and our unlocked SOL holdings.

If we are unable to sell our locked or unlocked SOL, enter into additional capital

raising transactions using locked or unlocked SOL as collateral, or otherwise generate funds using our locked or unlocked SOL holdings,

or if we are forced to sell our locked or unlocked SOL at a significant loss, in order to meet our working capital requirements, our business

and financial condition could be negatively impacted.

Staking Program involves a temporary loss of Transferability of Staked SOL during the “deactivation” or Cooldown Period.

acknowledge that during the deactivation period, as described below, staked SOL is not earning rewards and is not yet liquid.

The “deactivation”

or cooldown period is such period when we chose to stop staking our SOL and during such period there is a loss of transferability of

Under normal conditions, we expect to regain complete control over un-staked SOL within approximately 48 hours;

network conditions could extend this period.

As such, we may be unable to adjust to market conditions, including being able to sell such

SOL during such period.

To mitigate liquidity risk, we intend to maintain a portion of our treasury in un-staked SOL and cash to meet

short-term obligations.

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 SOL 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 SOL.

While the SEC issued interpretive guidance in March 2026

33-11412) classifying SOL as a digital commodity rather than a security, this interpretation is not a statutory designation

and could be challenged in court or superseded by future legislation.

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

Although SOL itself is

currently classified as a digital commodity, if the manner in which SOL is offered or sold is determined to constitute a security or

an investment contract for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a

determination could adversely affect the market price of SOL and in turn adversely affect the market price of our Common Stock.

Moreover, the risks of us engaging in a SOL Treasury Policy 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.

Future regulatory developments

regarding the treatment of digital assets, including the SEC’s 2026 clarification that certain protocol staking activities do not involve

securities transactions, staking rewards, or digital asset treasury strategies for U.S.

federal, state, or international tax purposes

could materially affect the way we account for, recognize, and report our SOL holdings and related income.

tax legislation or regulatory guidance regarding digital assets, including the treatment of staking rewards, could materially affect

our financial condition and results of operations.

federal income tax treatment of digital assets, including SOL and staking rewards, remains subject to significant uncertainty and

evolving guidance.

The Internal Revenue Service (“IRS”) has issued limited guidance on the treatment of digital assets and

staking rewards for U.S.

federal income tax purposes.

Under current IRS guidance, staking rewards may be treated as ordinary income at

the time of receipt, valued at fair market value.

However, this position is subject to ongoing litigation and may change.

Future legislative

or regulatory developments could alter the timing, character, or amount of income recognized from our SOL holdings and staking activities.

Additionally, the tax treatment of transactions involving locked SOL, derivative instruments on SOL, and transfers between custodians

or staking validators remains unclear.

Changes in tax law or guidance could result in increased tax liability, require changes to our

Treasury Strategy, or adversely affect our financial condition and results of operations.

We may also face tax obligations in foreign

jurisdictions where our subsidiaries hold or transact in digital assets.

change reclassifying SOL as a security could lead to our falling within the definition of “investment company” under the

Investment Company Act of 1940, as amended (the “1940 Act”), and could adversely affect the market price of SOL and the market

price of our Common Stock.

Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes

of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing,

reinvesting or trading in securities or (2) it is engaged, or proposes to engage, in the business of investing, reinvesting, owning,

holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of

its total assets (exclusive of U.S.

government securities and cash items) on an unconsolidated basis.

We do not believe that we are an

“investment company,” as such term is defined in the 1940 Act, and are not registered as an “investment company”

under the 1940 Act as of the date of this filing.

monitor our assets and income in order to conduct our business activities in a manner such that we do not fall within the definition

of “investment company” under the 1940 Act or would qualify under one of the exemptions or exclusions provided by the 1940

Act and corresponding SEC rules.

If SOL is determined to be a security for purposes of the federal securities laws, we would take steps

to reduce our holdings of SOL as a percentage of our total assets.

These steps may include, among others, selling SOL that we might otherwise

hold for the long term and deploying our cash in assets that are not considered to be investment securities under the 1940 Act, in which

case we may be forced to sell our SOL at unattractive prices.

We may also seek to acquire additional assets that are not considered to

be investment securities under the 1940 Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements

that are not otherwise attractive to our business.

Any of these actions could have a material adverse effect on our results of operations

and financial condition.

Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid meeting

the definition of “investment company” under the 1940 Act and becoming subject to its requirements.

If SOL is determined

to constitute a security for purposes of the federal securities laws, and if we are not able to come within an available exemption or

exclusion under the 1940 Act, then we would have to register as an investment company and require us to change the manner in which we

conduct our business.

In addition, such a determination could adversely affect the market price of SOL and in turn adversely affect the

market price of our Common Stock.

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.

funds, exchange-traded funds and their directors and management are subject to extensive regulation as “investment companies”

and “investment advisers” under U.S.

federal and state law;

this regulation is intended for the benefit and protection of

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 Treasury Reserve Policy or our SOL strategy, our use of leverage, the manner in which our SOL

is custodied, our ability to engage in transactions with affiliated parties and our operating and investment activities generally are

not subject to the extensive legal and regulatory requirements and prohibitions that apply to investment companies and investment advisers.

For example, although a significant change to our Treasury Policy would require the approval of our Board, no stockholder or

regulatory approval would be necessary.

Consequently, our Board has broad discretion over the investment, leverage and cash management

policies it authorizes, whether in respect of our SOL holdings or other activities we may pursue, and has the power to change our current

policies, including our strategy of acquiring and holding SOL, See “ Use of Proceeds .”

classification as a digital asset treasury company may affect our eligibility for inclusion in stock indices and exchange-traded funds,

which could adversely affect the trading price and liquidity of our Common Stock.

providers such as MSCI, S&P, and FTSE Russell have discretion to classify companies and determine index eligibility based on their

assessment of a company’s primary business activities.

Our transition to a digital asset treasury strategy may result in our reclassification

by index providers from our prior industry classification to a financial or alternative asset classification or may result in our exclusion

from certain indices altogether.

Index providers may determine that companies whose primary treasury reserve asset is a digital asset

do not meet the criteria for inclusion in broad market indices.

Exclusion from or reclassification within stock indices could reduce

demand for our Common Stock from index-tracking funds and other institutional investors, which could adversely affect the trading price,

liquidity, and volatility of our Common Stock.

rely on third-party custodians, trading platforms, and other counterparties to acquire, secure, stake, and dispose of SOL.

or malfeasance by these counterparties could result in total or partial loss of our digital assets.

ability to implement our Treasury Policy depends on the performance, solvency, and information-technology infrastructure of third-party

exchanges, custodians, blockchain validators, and decentralized finance protocols.

These counterparties may experience cyber-attacks,

internal control failures, fraud, insolvency, or regulatory enforcement that could freeze, delay, or permanently impair access to our

SOL holdings or the yield we expect to generate from staking or other on-chain activities.

In addition, concentrated holdings of SOL

by a limited number of counterparties heighten our exposure to counterparty and systemic risk.

Any loss or inaccessibility of SOL held

on our behalf could have a material adverse effect on our financial condition and results of operations.

we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our SOL,

or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our SOL and

our financial condition and results of operations could be materially adversely affected.

Substantially

all of the SOL we own is held in custody accounts at U.S.-based institutional-grade digital asset custodians.

Security breaches and cyberattacks

are of particular concern with respect to our SOL.

SOL and other blockchain-based cryptocurrencies and the entities that provide services

to participants in the Solana ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious

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

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:

partial or total loss of our SOL in a manner that may not be covered by insurance or the liability provisions of the custody agreements

with the custodians who hold our SOL;

to our reputation and brand;

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

regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

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

Solana ecosystem or in the use of the Solana network to conduct financial transactions, which could negatively impact us.

upon systems across a variety of industries, including industries related to Solana, 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.

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.

The risk of cyberattacks could also be increased by cyberwarfare in connection with

the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential proliferation of malware into systems

unrelated to such conflicts.

Any future breach of our operations or those of others in the Solana industry, including third-party services

on which we rely, could materially and adversely affect our financial condition and results of operations.

custodians currently maintain insurance coverage over the digital assets that they are custodying, including our digital asset holdings,

however those insurance coverages may not cover losses arising from cyberattacks, operational failures, or insolvencies at custodians

or execution venues or may not have enough coverage to cover the amount of our digital assets held by them.

We do not independently maintain

our own insurance coverage over our digital asset holdings.

do not independently maintain our own insurance coverage specifically for our digital asset holdings separate from the coverage maintained

by our custodians.

The insurance policies maintained by our custodians are for the custodians’ benefit and may not directly protect

us in the event of a loss.

The scope, terms, and coverage limits of our custodians’ insurance policies may be insufficient to cover

the full value of our digital asset holdings, and there can be no assurance that our custodians will maintain adequate insurance coverage

in the future.

The digital asset insurance market remains nascent, and comprehensive insurance products covering the full range of risks

associated with digital asset custody, including but not limited to theft, fraud, hacking, and loss of private keys, may not be available

on commercially reasonable terms or at all.

Treasury Policy also contemplates the use of DeFi protocols which exposes us to unique risks, including:

Vulnerabilities

or flaws in a smart contract could allow attackers to drain assets, prevent us from accessing our holdings, or manipulate protocol

Once deployed, smart contracts are difficult to amend, and in many cases cannot be modified at all without widespread

validator or governance consensus.

protocols, wallets, and bridges have been frequent targets of sophisticated cyberattacks, including flash-loan attacks, cross-chain

bridge exploits, and private key compromises.

Losses from such incidents are often immediate, irreversible, and may not be covered

by insurance or contractual recourse.

legal and regulatory treatment of DeFi remains highly uncertain.

Regulators could impose restrictions or obligations on participants

or on protocols themselves, which could adversely affect our ability to use such platforms or the value of assets held in them.

protocols are governed by decentralized communities through on-chain voting mechanisms, which may be subject to capture by a small

number of participants.

Protocol governance decisions could adversely affect our ability to use or recover assets.

Additionally,

protocols may change rules, fees, or parameters without advance notice.

we or our counterparties suffer losses as a result of DeFi protocol failures, hacks, or exploits, we may be unable to recover some or

all of our assets.

Such an event could materially and adversely affect our business, financial condition, and the market price of our

Common Stock.

of the date of this filing, we have not yet engaged a significant portion of our assets with DeFi protocols.

face other risks related to our SOL treasury reserve business model.

SOL treasury reserve business model exposes us to various risks, including the following:

and other digital assets are subject to significant legal, commercial, regulatory, and technical uncertainty, and our SOL strategy

subjects us to enhanced regulatory oversight;

changes could impact our ability to stake on validators or receive rewards;

scrutiny of our activities may increase, potentially limiting our operations;

litigation risks exist related to smart contract vulnerabilities, or our business activities;

around SOL’s regulatory status may impact our ability to list on certain exchanges;

in political administration may not guarantee a favorable regulatory environment for SOL;

SEC actions or court decisions could retroactively classify SOL as a security, potentially leading to penalties or forced unwinding

of transactions;

regulatory focus on Layer-1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements;

use of call and put options on SOL exposes us to derivative-specific risks, including potential leverage effects, counterparty default

risk, valuation and liquidity challenges, and the possibility that option strategies may not effectively hedge downside risk or may

limit upside participation;

SOL staking rewards depend on validator selection and performance;

poor validator performance could reduce rewards;

concentration

of influence by the Solana Foundation, Solana Labs or other significant holders of Solana tokens could impact protocol governance in

ways that are adverse to us.

instability or liquidity freezes could prevent us from liquidating SOL or using it as collateral when needed.

Related to Our Use of Derivatives on SOL

time to time, we utilize call options and put options on SOL as part of our treasury reserve strategy.

These derivatives are intended

to (i) hedge downside exposure to SOL price volatility and (ii) accelerate our accumulation of SOL in a capital-efficient manner.

these option strategies may enhance our risk-adjusted returns, they expose us to additional risks, including the following:

SOL options are traded over-the-counter or on non-qualified crypto venues.

If a counterparty fails to perform on its obligations,

we may be unable to realize gains, recover premiums, or receive delivery of SOL, potentially resulting in a total loss of value associated

with the position.

can introduce effective leverage, amplifying gains but also magnifying losses.

We may be required to post collateral or margin, which

could reduce liquidity available for our operations.

Option contracts may also be illiquid, particularly during periods of market

stress, making it difficult to exit or adjust positions.

put options may provide downside protection and call options may accelerate accumulation, there is no guarantee these strategies

will be effective.

Options may expire worthless, may not move in correlation with SOL spot prices, or may limit upside gains.

valuations are sensitive to assumptions about implied volatility, time to maturity, and counterparty pricing.

These variables may

fluctuate significantly, resulting in mark-to-market losses or earnings volatility.

regulatory treatment of SOL derivatives remains uncertain.

Future guidance could limit our ability to continue using derivatives

or require us to account for them in a manner that increases earnings volatility.

of these risks could materially and adversely affect the value of our SOL treasury, our financial condition, and the market price of

our Common Stock.

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

What changed 10-K

Item 1A. Risk Factors