288 added · 202 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
For example, the U.S. executive branch, the SEC, the European Union’s Markets in Crypto Assets Regulation, among others, have been active in recent years, and in the United Kingdom, the Financial Services and Markets Act 2023 became law.
Such disruptions could include, for example: the insolvency, business failure, interruption, default, failure to perform, security breach, or other problems of participants, custodians, or others; the closing of SOL trading platforms due to fraud, failures, security breaches or otherwise; or network outages or congestion, power outages, or other problems or disruptions affecting the Solana network.
For example, Galaxy Digital Inc. agreed to pay $200 million as part of an agreement with the New York Attorney General to resolve civil claims related to certain investments, trading, and public statements made in connection with the LUNA digital asset from late 2020 to 2022.
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.
Under current guidance by the Internal Revenue Service (“IRS”), staking rewards and transaction fees may be treated as ordinary income upon receipt, although additional guidance is expected pursuant to the President’s Working Group July 2025 report “Strengthening American Leadership in Digital Financial Technology.” If regulation or policy changes, or the interpretation or enforcement thereof, results in adverse tax treatment of rewards from staking SOL, we could be subject to increased audits by the IRS and additional tax liabilities.
In October of 2025, the SEC approved the listing and trading of spot SOL exchange-traded products (“ETPs”), the shares of which can be sold in public offerings and are traded on U.S. national securities exchanges.
Set forth below is a summary of the principal risks we face: · We adopted a new business strategy dedicated to SOL which exposes us to significant risk as there is no assurance that we will be able to successfully execute this strategy and business plan; · The SEC has taken, and may in the future take, the view that some of the digital assets held by the Company are securities, which has adversely affected, and could adversely affect the value of such digital assets and the financial condition of the Company and result in potentially substantial expense to the Company; · A particular crypto asset’s status as a security in any relevant jurisdiction is subject to a high degree of uncertainty, and if we are unable to correctly classify a crypto asset, we may be subject to regulatory scrutiny, investigations, additional reporting requirements and other adverse consequences, including potentially becoming subject to the Investment Company Act of 1940 which would impose significant financial and regulatory burdens and compliance costs; · The high volatility of trading prices that many digital assets, including SOL, have experienced and may continue to experience could have a material adverse effect on the value of the Company’s digital assets, which could lose all or substantially all of their value, and on the overall financial position of the Company; · Crypto assets and our related activities are characterized by numerous other risks and uncertainties, including the possibility of code malfunction, theft, fraud, hacking, cyberattacks, malicious activities or manipulation, in addition to price volatility, regulatory actions, bans or restrictions, declines in the price of crypto assets, demand for or public perception of crypto assets and other external forces beyond our control; · There is a significant increase in competition in the digital asset industry and thus, the Company’s financial condition and operations may be adversely affected if the Company fails to compete effectively; · Technological innovations and new entrants into the digital asset ecosystem may render Solana obsolete which would materially affect the price of the Company’s stock price and overall financial position; · The Company’s financial position and operations may be dependent on the acceptance of digital assets, which represent a new and rapidly evolving industry; · The largely unregulated nature of the digital asset ecosystem may adversely affect the value of digital assets and, consequently, the Company’s financial position; · We are highly dependent on our new Chairman of the Board of Directors, members of our executive team, and our Asset Manager, and the loss of any of their services could materially harm our business. 8 Risks Related to the Company’s Digital Assets Strategy and Holdings We purchase digital assets, including SOL, the price of which has been, and will likely continue to be, highly volatile.
For example, malicious attacks by validators, inadequate validation and staking rewards to incentivize validating of Solana transactions, hard “forks” of the Solana blockchain into multiple blockchains, difficulties with upgrades to the Solana network (such as the proposed Alpenglow consensus upgrade or integration of the Firedancer validator client) and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the Solana blockchain and negatively affect the price of SOL.
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.
It is not possible to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC, Commodity Futures Trading Commission (“CFTC”), or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions.
Separately, Multicoin Capital Management, LLC and its managing partner Kyle Samani have been named as co-defendants along with Solana Labs in a putative class-action litigation related to the promotion and sale of SOL for which a motion to dismiss is pending.
Any adverse outcome in these proceedings or other future litigation or regulatory inquiries could negatively affect public perception of the Sponsors, the Company, and Solana itself, which could constrain trading activity and suppress the price and liquidity of SOL.
No longer disclosed
For example, in Fiscal 2024, we experienced shipping delays resulting from cargo ship piracy in the Red Sea, and in March 2021, a container ship carrying some of our products ran aground in the Suez Canal and was immobilized for six days.
Accordingly, our independent registered public accounting firm stated in their report on our annual financial statements for the fiscal year ended September 30, 2024, that these conditions raise substantial doubt about our ability to continue as a going concern.
On our website under “Investors” "SEC Filings", we make available access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Schedule 14A and amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), free of charge.
The USTR also announced in May 2022 that it reinstated or extended various eligible tariff exclusions on certain products from China through December 2023.
While our supply chain appears to generally be stable at this time, should a resurgence of COVID-19, or a similar pandemic, occurs, our supply chain could again be negatively impacted; for example, the factories that manufacture our products could be required by government authorities to temporarily cease operations or might be limited in their production capacity.
In September 2024, the USTR completed its statutory four-year review and announced tariff increases on imports from China on various products.
We have had to impair our goodwill in the past, and in Fiscal 2024, we recorded a goodwill impairment charge of $200,000.
To the extent that there are disruptions or delays in loading container cargo in ports of origin or off-loading cargo at ports of destination as a result of labor disputes, work-rules related slowdowns, tariff or World Trade Organization-related disputes, piracy, physical damage to port terminal facilities or equipment caused by severe weather or terrorist incidents, congestion in port terminal facilities, inadequate equipment to load, dock and offload container vessels or energy-related tie-ups or otherwise, or for other reasons, product shipments to our customers will be delayed.
The loss of the services of any of our key personnel and the process to replace any key personnel would involve significant time and expense and may significantly delay or prevent the achievement of our business objectives. 12 If a third party asserts that we are infringing on its intellectual property, whether successful or not, it could subject us to costly and time-consuming litigation or require us to obtain expensive licenses, and our business may be adversely affected.
If our common stock is delisted, we could face significant material adverse consequences, including: ● a limited availability of market quotations for our common stock; ● reduced liquidity with respect to our common stock; ● a determination that our shares of common stock are a “penny stock” which will require broker-dealers trading in our common stock to adhere to more stringent rules, including being unable to solicit buyers for our common stock; ● a limited amount of news and analyst coverage for our Company; and ● a limited ability to raise capital in the future. 15 If we become subject to a regulatory investigation, it could cause us to incur substantial costs or require us to change our business practices in a manner materially adverse to our business.
We test goodwill for impairment in the fourth quarter of each year, or more frequently if indicators of an impairment exist, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.
In such case, the value and marketability of the common stock could decline. 5 Risks Relating to Our Business, Liquidity and Operations We have experienced recurring losses and our ability to continue as a going concern is in doubt.