FORUM Markets (FRMM) risk factors, FY2025 10-K

What changed since the prior 10-K

New

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Our business strategy has a limited operating history and volatility in the price of our tokenized securities could materially and adversely affect our financial results and the market price of our common stock

  Our limited operating history in RWA tokenization and token price volatility could harm our common stock price.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  We face risks relating to the custody of our Digital Assets, including concentration with one or more custodians, limits on insurance coverage, and adverse outcomes in insolvency proceedings

  We face custody risks, potential concentration with Coinbase, and potential limits on digital asset insurance or custodian availability.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  If we were deemed to be an investment company under the Investment Company Act, applicable restrictions likely would make it impractical for us to continue our business as currently conducted

  Holding ETH and tokenized RWAs could cause us to be deemed an investment company under the Investment Company Act.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Volatility in the price of our tokenized securities could materially adversely affect our financial results and the market price of our common stock

  Our RWA tokenization strategy has a limited operating history, and price volatility in our tokenized securities could harm our results.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  We are dependent on third parties and third-party platforms to execute and support the trading and transfer of our tokenized securities

  We rely on Liquidity.io and other alternative trading systems for secondary trading of our Aero Token and tokenized securities.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  We rely on third-party service providers to support “know-your-customer” and AML investor verification for our tokenized securities, and any failure or interruption of those services could disrupt our tokenization activities

  We rely on third-party providers for KYC and AML verification for our tokenized securities.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  We may rely on smart contracts that are upgradeable, which could introduce operational, security, and governance risks and could adversely affect our tokenization activities

  Our tokenization activities rely on upgradeable smart contracts that introduce operational, security, and governance risks.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers

  We are exempt from regulations governing mutual funds and ETFs, giving our Board broad discretion over ETH policies.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Our digital asset holdings expose us to risk of non-performance by providers and counterparties

  Our digital asset holdings expose us to counterparty non-performance risks, relying heavily on Coinbase for custody.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Our common stock may be more volatile and may trade at a substantial premium or discount to the value of the digital assets we hold

  Our common stock price may trade at a premium or discount compared to the value of our digital asset holdings.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  The availability of spot exchange-traded products (“ETPs”) for ETH and other digital assets may adversely affect the market price of ETH or other digital assets and, consequently, the trading price of our common stock

  Spot ETPs for ETH and other digital assets may adversely affect ETH prices and our common stock trading price.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Changes in the accounting treatment of our ETH holdings and the application of fair value accounting could materially increase the volatility of our results and adversely affect the market price of our common stock

  Adopting ASU 2023-08 requires fair value accounting for our ETH holdings, increasing financial result volatility starting January 1, 2025.

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Transactions using ETH require the payment of “gas fees,” which are subject to fluctuations that may result in high transaction fees

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Liquid staking applications pose risks associated with concentration of control

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Lending arrangements may expose us to risks of borrower default and operational failures

• NewRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Security breaches or cyberattacks could result in loss of our digital assets and disrupt our tokenization activities

• NewRisks Related to our Common Stock

  The price of our common stock has and may continue to fluctuate significantly

• NewRisks Related to our Common Stock

  Our stock repurchases are discretionary and even if effected, they may not achieve the desired objectives

• NewRisks Related to our Common Stock

  Sales of our common stock through our ATM Program, or the perception that such sales may occur, could cause the market price of our common stock to fall

• NewRisks Related to our Common Stock

  You may experience future dilution as a result of future equity or debt offerings

• NewRisks Related to our Common Stock

  We have never paid dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future

• NewGeneral Risks

  Our limited number of employees subjects us to significant resource constraints, which may hinder our ability to comply with public company regulations and manage our operations effectively

• NewGeneral Risks

  If we are unable to effectively manage our limited human resources or if we fail to scale our staff as our strategy progresses, we may experience delays in our filings, weaknesses in our internal controls, or a failure to execute our business plan, any of which could materially and adversely affect our stock price

• NewGeneral Risks

  The material weakness in internal control over financial reporting identified was related to controls over the classification and technical accounting review of significant, one-time accounting transactions

• NewGeneral Risks

  Our classified Board of Directors structure may delay or complicate changes in control of our Board of Directors, but a hostile takeover or activist campaign could nevertheless result in changes to our Board of Directors and management that adversely affect our business and the market price of our common stock

• NewGeneral Risks

  Changes in applicable tax laws and regulations could adversely affect our business

• NewGeneral Risks

  Our tax burden could increase as a result of ongoing or future tax audits

• NewGeneral Risks

  Taxation of digital assets is complex and evolving

• NewGeneral Risks

  Furthermore, changes in tax laws, regulations, or enforcement policies could increase our tax burden or affect the tax efficiency of our investment strategy. Such changes could also require us to modify our investment, accounting, or operational practices, potentially resulting in increased costs or reduced returns

Dropped

• DroppedRisks Related to our Securities

  You should be aware that there are substantial risks for an investment in our common stock. You should carefully consider these risk factors before you decide to invest in our common stock

  General risks of investing in our common stock.

• DroppedRisks Relating to Our Need For Additional Funding

  We will need additional capital which may not be available on commercially acceptable terms, if at all, which raises questions about our ability to continue as a going concern

  Going concern doubts due to accumulated deficit and working capital deficit.

• DroppedRisks Relating to Our Need For Additional Funding

  We may not receive any additional amounts under our pre-merger directors’ and officers’ insurance policy in connection with certain litigation matters and may be forced to repay $2.57 million previously received

  Risks regarding pre-merger D&O insurance policy litigation with AmTrust.

• DroppedRisks Relating to Our Need For Additional Funding

  On April 21, 2023, the Court issued an Order Granting in Part and Denying in Part the Company’s Motion for Partial Summary Judgment

  Partial summary judgment details regarding insurance coverage.

• DroppedRisks Relating to Our Need For Additional Funding

  Additional funding may not be available on favorable terms, if at all, causing dilution to our stockholders, restricting our operations or adversely affecting our ability to operate our business

  Macroeconomic conditions restricting additional funding availability.

• DroppedRisks Relating to Our Need For Additional Funding

  Our accounts payable are significant, and we do not currently have sufficient funds to pay such accounts payable, all of which are past due

  Significant past-due accounts payable of approximately $2.6 million.

• DroppedRisks Relating to Our Planned Online Casino Operations

  We have no operating history in the gaming industry and have incurred significant operating losses since inception. We may never become profitable or, if achieved, be able to sustain profitability

  No operating history and expected continued losses in the gaming industry.

• DroppedRisks Relating to Our Planned Online Casino Operations

  The online gaming industry is highly competitive, and if the Company fails to compete effectively, it could experience price reductions, reduced margins or loss of revenues

  High competition in the online gaming industry.

• DroppedRisks Relating to Our Planned Online Casino Operations

  The Company will face the risk of fraud, theft, and cheating

  Risk of fraud, theft, and cheating in gaming products.

• DroppedRisks Relating to Our Planned Online Casino Operations

  We expect to be reliant on third-parties for our gaming content and to have no control over the providers of our content. Our business could be adversely affected if our access to games is limited or delayed

  Reliance on third parties for gaming content.

• DroppedRisks Relating to Our Planned Online Casino Operations

  The Company will rely on third party cloud services and such providers or services may encounter technical problems and service interruptions

  Reliance on third-party cloud services for hosting gaming services.

• DroppedRisks Relating to Our Planned Online Casino Operations

  Malfunctions of third-party communications infrastructure, hardware and software may expose the Company to a variety of risks it cannot control

  Malfunctions of third-party communications infrastructure for gaming.

• DroppedRisks Relating to Our Planned Online Casino Operations

  The Company’s planned online casino is part of a new and evolving industry, which presents significant uncertainty and business risks

• DroppedRisks Relating to Our Planned Online Casino Operations

  The product offerings of the Company must be approved in most regulated jurisdictions in which they are offered; this process cannot be assured or guaranteed

• DroppedRisks Relating to Our Planned Online Casino Operations

  Legislative and regulatory changes could negatively affect the business of the Company and the business of its customers

• DroppedRisks Relating to Our Planned Online Casino Operations

  The gaming industry is highly regulated, and the Company must adhere to various regulations and maintain applicable licenses to operate. Failure to abide by regulations or maintain applicable licenses could be disruptive to our business and could adversely affect our operations

• DroppedRisks Relating to Our Planned Online Casino Operations

  A reduction in discretionary consumer spending, from an economic downturn or disruption of financial markets or other factors, could negatively impact the financial performance of the Company as it develops its iGaming business

• DroppedRisks Relating to Our Planned Online Casino Operations

  The Company will face cyber security risks that could result in damage to the Company’s reputation and/or subject them to fines, payment of damages, lawsuits and restrictions on the Company’s use of data

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  Bitcoin, Ethereum, Litecoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  We may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  Intellectual property rights claims may adversely affect the operation of some or all crypto asset networks

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  The impact of geopolitical and economic events on the supply and demand for crypto assets, including bitcoin, is uncertain

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  The characteristics of crypto assets have been, and may in the future continue to be, exploited to facilitate illegal activity such as fraud, money laundering, tax evasion and ransomware scams; all of which may have an adverse effect on the market for, and regulation of, crypto assets, and our operations

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  Incorrect or fraudulent digital asset transactions may be irreversible

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  The decentralized nature of crypto asset systems may lead to slow or inadequate responses to crises, which may negatively affect our business

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  It may be illegal now, or in the future, to acquire, own, hold, sell or use bitcoin or other crypto assets, participate in blockchains or utilize similar crypto assets in one or more countries, the ruling of which would adversely affect us

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  The limited rights of legal recourse against us, and our lack of insurance protection expose us and our stockholders to the risk of loss of our crypto assets for which no person is liable

• DroppedRisks Relating to Our Plans to Allow Players to Deposit and Withdraw Cryptocurrency

  Digital assets held by us are not subject to FDIC or SIPC protections

• DroppedRisks Related to Our Business Operations

  Our License Agreements with the University of Oxford and other licensors may be terminated in certain circumstances without our consent

• DroppedRisks Related to Our Business Operations

  We owe a significant amount of money to the University of Oxford, which funds we do not have. The university may take action against us to enforce their rights to payment in the future, which could have a material adverse effect on us and our operations

• DroppedRisks Related to Our Business Operations

  Our results of operations may be adversely affected by fluctuations in currency values

• DroppedRisks Related to Our Business Operations

  Economic uncertainty may affect our access to capital and/or increase the costs of such capital

• DroppedRisks Related to Our Business Operations

  We depend on our key personnel and our ability to attract and retain employees

• DroppedRisks Related to Our Business Operations

  Our employees may have previously engaged, and/or may in the future engage, in misconduct or other improper activities, including noncompliance with regulatory standards and legal requirements

• DroppedRisks Related to Our Business Operations

  Security breaches, loss of data and other disruptions could compromise sensitive information related to our business, prevent us from accessing critical information or expose us to liability, which could adversely affect our business and our reputation

• DroppedRisks Related to Our Business Operations

  We may enter into strategic transactions in the future which may result in a material change in our operations and/or a change of control

• DroppedRisks Related to Our Business Operations

  Our directors and officers allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs

• DroppedRisks Related to Our Business Operations

  Certain of our executive officers and directors may in the future become affiliated with entities engaged in business activities similar to those conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented

• DroppedRisks Related to Our Business Operations

  Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests

• DroppedRisks Relating to Our Life sciences Operations

  We may be unable to monetize our existing life science assets

• DroppedRisks Relating to Our Life sciences Operations

  Our ability to generate revenue from any of our potential life sciences products is subject to our ability to obtain regulatory approval and fulfill numerous other requirements and we may never be successful in generating revenues or becoming profitable

• DroppedRisks Relating to Our Life sciences Operations

  All of our patents in the Anti-TNF and Fibrosis program are method of use patents, which may result in biosimilar drugs being used without our permission

• DroppedRisks Relating to Our Life sciences Operations

  The majority of our license agreements provide the licensors and/or counter-parties the right to use and/or exploit such licensed intellectual property

• DroppedRisks Relating to Our Life sciences Operations

  We may not be successful in establishing development and commercialization collaborations which could adversely affect, and potentially prohibit, our ability to develop our product candidates

• DroppedRisks Relating to Our Life sciences Operations

  Our and our partner’s operations are subject to risks associated with ongoing and potential future global conflicts, including specifically the operations of Yissum, our research partner

• DroppedRisks Relating to Our Life sciences Operations

  We are subject to extensive regulation by U.S. federal and state and foreign governments in each of the U.S., European and Canadian markets, in which we plan to sell our products, or in markets where we have product candidates progressing through the approval process

• DroppedRisks Relating to Our Life sciences Operations

  We are subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such healthcare laws and regulations could adversely affect our business and results of operations

• DroppedRisks Relating to Our Life sciences Operations

  In some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country

• DroppedRisks Relating to Our Ineffective Disclosure Controls and Procedures

  The Company has discussed the disclosure procedures and controls with its external accounting advisors, and is currently evaluating steps and processes to remedy such concerns

• DroppedRisks Related to our Intellectual Property

  We may not be able to adequately protect our future product candidates or our proprietary technology in the marketplace

• DroppedRisks Related to our Intellectual Property

  If third parties claim that intellectual property used by our company infringes upon their intellectual property, our operating profits could be adversely affected

• DroppedRisks Related to our Intellectual Property

  If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished

• DroppedRisks Related to our Intellectual Property

  The expiration or loss of patent protection may adversely affect our future revenues and operating earnings

• DroppedRisks Related to our Intellectual Property

  We have in the past, and may in the future, impair long-lived assets and intangible assets, including goodwill and acquired in-process research and development

• DroppedRisks Related to our Common Stock and Warrants

  We currently have an illiquid and volatile market for our common stock, and the market for our common stock is and may remain illiquid and volatile in the future

• DroppedRisks Related to our Common Stock and Warrants

  Elray Resources, Inc., beneficially owns a significant percentage of our common stock and as such exercises significant voting control over us, which limits other stockholders’ abilities to influence corporate matters and could delay or prevent a change in corporate control

• DroppedRisks Related to our Common Stock and Warrants

  Elray may have interests, with respect to its Company securities, that are different from other investors and the concentration of voting power held by Elray may have an adverse effect on the price of our common stock

• DroppedRisks Related to our Common Stock and Warrants

  Information available in public media that is published by third parties, including blogs, articles, message boards and social and other media may include statements not attributable to us and may not be reliable or accurate

• DroppedRisks Related to our Common Stock and Warrants

  The exercise of the outstanding options and warrants, and the sale of common stock upon exercise thereof, may adversely affect the trading price of our securities

• DroppedRisks Related to our Common Stock and Warrants

  Our outstanding public warrants are significantly out of the money

• DroppedRisks Related to our Common Stock and Warrants

  Provisions of certain outstanding warrants could discourage an acquisition of us by a third party

• DroppedRisks Related to our Common Stock and Warrants

  A significant number of our shares are eligible for sale and their sale or potential sale may depress the market price of our common stock and cause significant dilution to existing stockholders

• DroppedRisks Related to our Common Stock and Warrants

  There may not be sufficient liquidity in the market for our securities in order for investors to sell their shares. The market price of our common stock may continue to be volatile

• DroppedRisks Related to our Common Stock and Warrants

  We face significant penalties and damages in the event registration statements we have previously filed to register certain securities sold in our prior offerings are subsequently suspended or terminated

• DroppedRisks Related to our Common Stock and Warrants

  Future sales of our common stock could cause our stock price to decline

• DroppedRisks Related to our Common Stock and Warrants

  Our Certificate of Incorporation provides for indemnification of officers and directors at our expense and limits their liability, which may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors

• DroppedRisks Related to our Common Stock and Warrants

  The limitation of monetary liability against our directors, officers and employees under Delaware law and the existence of indemnification rights to them may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees

• DroppedRisks Related to our Common Stock and Warrants

  Our directors have the right to authorize the issuance of shares of preferred stock and additional shares of our common stock

• DroppedRisks Related to our Common Stock and Warrants

  Our Second Amended and Restated Certificate of Incorporation, as amended, contains exclusive forum provisions that may discourage lawsuits against us and our directors and officers

• DroppedRisks Related to our Common Stock and Warrants

  Our Second Amended and Restated Certificate of Incorporation, as amended, contains provisions whereby we renounced any interest in any corporate opportunity offered to any director or officer, subject to certain exceptions

• DroppedRisks Related to our Common Stock and Warrants

  Provisions in our Certificate of Incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management

• DroppedRisks Related to our Common Stock and Warrants

  We incur significant costs to ensure compliance with U.S. and Nasdaq reporting and corporate governance requirements

• DroppedRisks Related to our Common Stock and Warrants

  We incur increased costs as a result of being a reporting company, and given our limited capital resources, such additional costs may have an adverse impact on our profitability

• DroppedRisks Related to our Common Stock and Warrants

  In the past we have not been in compliance with Nasdaq’s continued listing standards and may not be in compliance with such standards in the future, and are currently subject to a one year mandatory panel monitor, and as a result our common stock and public warrants may be delisted from Nasdaq

• DroppedRisks Related to our Common Stock and Warrants

  We have previously been out of compliance with Nasdaq’s continued listing requirements due to our failure to maintain a minimum bid price of at least $1.00 per share for our common stock, which failure was remedied in March 2024

• DroppedRisks Related to our Common Stock and Warrants

  Our failure to meet Nasdaq’s continued listing requirements for the reasons above, or any other reason, may result in our securities being delisted from Nasdaq

• DroppedRisks Related to our Common Stock and Warrants

  Global economic conditions could materially adversely affect our business, results of operations, financial condition and growth

• DroppedRisks Related to our Common Stock and Warrants

  Our proprietary information, or that of our customers, suppliers and business partners, may be lost or we may suffer security breaches

• DroppedRisks Related to our Common Stock and Warrants

  Failure of our information technology systems, including cybersecurity attacks or other data security incidents, could significantly disrupt the operation of our business

• DroppedRisks Related to our Common Stock and Warrants

  We may acquire other companies which could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations and harm our operating results

• DroppedRisks Related to our Common Stock and Warrants

  We may apply working capital and future funding to uses that ultimately do not improve our operating results or increase the value of our securities

• DroppedRisks Related to our Common Stock and Warrants

  We have never paid or declared any dividends on our common stock

• DroppedRisks Related to our Common Stock and Warrants

  Stockholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of additional shares of our common stock

• DroppedRisks Related to our Common Stock and Warrants

  Our growth depends in part on the success of our strategic relationships with third parties

• DroppedRisks Related to our Common Stock and Warrants

  Claims, litigation, government investigations, and other proceedings may adversely affect our business and results of operations

• DroppedRisks Related to our Common Stock and Warrants

  Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations

• DroppedRisks Related to our Common Stock and Warrants

  We may be adversely affected by climate change or by legal, regulatory or market responses to such change

• DroppedRisks Related to our Common Stock and Warrants

  We may incur indebtedness in the future which could reduce our financial flexibility, increase interest expense and adversely impact our operations and our costs

• DroppedRisks Related to our Common Stock and Warrants

  We may be adversely impacted by changes in accounting standards

Reworded

• 85% rewrittenRisks Related to Holding Digital Assets and Our Tokenization Strategies

  Our ETH holdings are concentrated and 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

  Shifted focus from general bitcoin market risks and 2022 exchange halts to a specific 79% asset concentration in ETH as of December 31, 2025.

  Was: In the event we hold digital assets, such holdings are expected to be less liquid and more volatile 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

• 71% rewrittenRisks Related to our Common Stock

  Resales of our common stock in the public market by our stockholders, or the perception that such sales may occur, may cause the market price of our shares of common stock to fall

  Added specific language regarding previously registered resales of a significant number of shares depressing our stock price and capital-raising ability.

  Was: Resales of our common stock in the public market may cause the market price of our common stock to fall

All 32 risk factors

Headings as the filing states them, in filing order.

Other FORUM Markets 10-Ks

• FY2024 10-K risk factors

  92 risks

  Forum Markets faces severe going concern doubts with an accumulated deficit of $141.5 million and $2.6 million in past-due accounts payable. The company is pivoting into the highly regulated, competitive online gaming and crypto asset wagering industry without prior operating history. Operations depend heavily on third-party cloud infrastructure, gaming content providers, and valid licenses from Oxford University and other authorities.

  Filed Mar 31, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.