Hyperscale Data (GPUS) risk factors, FY2024 10-K

Risks Related to Our Company

1. 01We have an evolving business model, which increases the complexity of our business
2. 02We are heavily dependent on our senior management, and a loss of a member of our senior management team could cause our stock price to suffer
3. 03We rely on highly skilled personnel and the continuing efforts of our executive officers and, if we are unable to retain, motivate or hire qualified personnel, our business may be severely disrupted
4. 04We may not be able to utilize our net operating loss carryforwards

Risks Related to Our Indebtedness and Liquidity

1. 05We will need to raise additional capital to fund our operations in furtherance of our business plan
2. 06To service any future indebtedness and other obligations, we will require a significant amount of cash

Risks Related to Circle 8

1. 07Circle 8’s business is, directly and indirectly, dependent on a functioning global supply chain system. The oil and steel markets are global, and many suppliers, vendors, OEM’s and parts manufacturers for Circle 8 and its clients’ industries are offshore
2. 08Furthermore, as Circle 8 expands its operations, it may need to rely on suppliers and logistics partners in new geographic regions, which could expose the company to additional supply chain risks
3. 09Circle 8 faces risks related to heightened inflation, recession, financial and credit market disruptions and other economic conditions
4. 10The inability to forecast trends accurately may have an adverse impact on Circle 8’s business and financial condition
5. 11Circle 8’s revenue and operating results may fluctuate, which could result in a decline in profitability and make it more difficult to grow the business
6. 12Circle 8 is subject to competition, which may have a material adverse effect on its business by reducing its ability to increase or maintain revenues or profitability
7. 13The cost of new Circle 8 rental fleet units may increase and therefore may require a larger equity investment equipment. In some cases, it may not be possible to procure equipment on a timely basis due to supplier constraints, among other reasons
8. 14Circle 8’s fleet is subject to residual value risk upon disposition
9. 15As Circle 8’s rental fleet ages, its operating costs may increase, it may be unable to pass along such costs to customers, and earnings may decrease. The costs of new fleet units may increase, requiring Circle 8 to spend more for replacement equipment or preventing it from procuring equipment on a timely basis
10. 16Labor disputes could disrupt Circle 8’s ability to serve its customers and/or lead to higher labor costs
11. 17Climate change, climate change regulations and greenhouse effects may materially adversely impact Circle 8 operations and markets

Risks Related to Our Bitcoin Operations – General

1. 18Acceptance and/or widespread use of Bitcoin is uncertain
2. 19The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of special economic, geopolitical and regulatory factors, which could slow the growth of the industry in general and our company as a result
3. 20Political or economic crises may motivate large-scale sales of cryptocurrencies, which could result in a reduction in values of cryptocurrencies such as Bitcoin and adversely affect an investment in us
4. 21Negative media attention and public perception surrounding energy consumption by cryptocurrency mining may adversely affect our reputation and, consequently, our stock price; particularly in the eyes of some of our investors who may be more interested in our non-crypto operations as a holding company
5. 22Banks and financial institutions may not provide banking services, or may cut off services, to businesses like us that engage in cryptocurrency-related activities
6. 23The price of cryptocurrencies may be affected by the sale of such cryptocurrencies by other vehicles investing in cryptocurrencies or tracking cryptocurrency markets. Such events could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin we mine

Risk related to technological advancements and obsolescence of current bitcoin mining equipment

1. 24Our operations are exposed to the risk of rapid technological advancements in the development and production of Bitcoin mining equipment, which could render our existing mining infrastructure obsolete and adversely impact our financial performance
2. 25Our future success will depend in part upon the value of Bitcoin. The value of Bitcoin may be subject to pricing risk and has historically been subject to wide swings
3. 26We may be unable to raise additional capital needed to grow our data center hosting business
4. 27The emergence of competing blockchain platforms or technologies may harm our business as presently conducted by preventing us from realizing the anticipated profits from our investments and forcing us to expend additional capital in an effort to adapt
5. 28We rely on one or more third parties for depositing, storing and withdrawing the Bitcoin we receive, which could result in a loss of assets, disputes and other liabilities or risks which could adversely impact our business
6. 29If a malicious actor or botnet obtains control of more than 50% of the processing power on a cryptocurrency network, such actor or botnet could manipulate blockchains to adversely affect us, which would adversely affect an investment in our company and our ability to operate
7. 30Our reliance on a third-party mining pool service provider for our mining revenue payouts may have a negative impact on our operations such as a result of cyber-attacks against the mining pool operator and/or our limited recourse against the mining pool operator with respect to rewards paid to us
8. 31Bitcoin may have concentrated ownership and large sales or distributions by holders of Bitcoin assets could have an adverse effect on the market price of Bitcoin

Risks Related to Our Bitcoin Operations – Legal and Regulatory

1. 32We are subject to a highly evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our business, prospects or operations
2. 33Ongoing and future regulatory actions may impact our ability to continue to operate, and such actions could affect our ability to continue as a going concern or to pursue our strategy at all, which could have a material adverse effect on our business, prospects or operations
3. 34If the SEC or another regulatory body considers Bitcoin to be a security under U.S. securities laws, we may be required to comply with significant SEC registration and/or other requirements
4. 35We are subject to risks associated with our need for significant electrical power. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations, such as ours
5. 36Our interactions with a blockchain may expose us to specially designated nationals or blocked persons or cause us to violate provisions of law that did not contemplate distributed ledger technology

Risks Related to Our Bitcoin Operations – Technological

1. 37The 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; if any of our customers do so or are alleged to have done so, it could adversely affect us
2. 38Incorrect or fraudulent cryptocurrency transactions may be irreversible and it is possible that, through computer or human error, or through theft or criminal action, our cryptocurrency rewards could be transferred in incorrect amounts or to unauthorized third parties
3. 39Cryptocurrencies, including those maintained by or for us, may be exposed to cybersecurity threats and hacks
4. 40Our use of third-party mining pools exposes us to additional risks

Risks Related to Our Status as a Holding Company

1. 41Our inability to successfully integrate new acquisitions could adversely affect our combined business; our operations are widely disbursed
2. 42If we make any additional acquisitions, they may disrupt or have a negative impact on our business
3. 43Increasing revenues through acquisitions is one of the key components of our growth strategy. Identifying suitable acquisition candidates can be difficult, time-consuming and costly, and we may not be able to identify suitable candidates or complete acquisitions in a timely manner, on a cost-effective basis or at all
4. 44Future acquisitions or business opportunities could involve unknown risks that could harm our business and adversely affect our financial condition and results of operations
5. 45In pursuing our corporate strategy, we may acquire, dispose of or exit businesses or reorganize existing investments. The success of this strategy is dependent upon our ability to identify appropriate opportunities, negotiate transactions on favorable terms and ultimately complete such transactions
6. 46Our development stage companies may never produce revenues or income
7. 47Divestitures and contingent liabilities from divested businesses could adversely affect our business and financial results

Risks Related to Related Party Transactions

1. 48Our relationship with Ault & Company may enhance the difficulty inherent in obtaining financing for us as well as expose us to certain conflicts of interest
2. 49Our relationship with Alzamend may expose us to certain conflicts of interest
3. 50Our relationship with ROI may expose us to certain conflicts of interest

Risks Related to RiskOn

1. 51BNC’s products and changes to such products could fail to attract or retain users or generate revenue and profits, or otherwise adversely affect BNC’s business
2. 52Our reliance on third-party certified game providers creates operational, compliance, and reputational vulnerabilities that could adversely impact our business
3. 53The lack of comprehensive encryption for communications on the Platform may increase the impact of a data security incident
4. 54Challenges in advertising and promoting our sweepstakes could hinder our user acquisition and revenue growth
5. 55A perceived lack of fairness in outcomes or prize distribution could severely damage brand trust

Risks Related to Government Regulation and Enforcement Regarding BNC

1. 56Our sweepstakes model could be reclassified as gambling or otherwise face tighter restrictions in certain U.S. states, which would materially affect our operations
2. 57We are subject to complex and evolving U.S. federal and state sweepstakes and consumer protection laws, which may impose substantial compliance burdens and operational constraints
3. 58Regulatory inquiries or legal proceedings related to AML, consumer fraud, or other compliance areas could disrupt our business and harm our reputation

Risks Related to Data, Security, and Intellectual Property

1. 59Security breaches, unauthorized attempts to manipulate or “cheat” sweepstakes outcomes, and other cyber incidents could undermine trust in the Platform and adversely affect BNC’s business
2. 60We anticipate that BNC’s efforts related to privacy, safety, security, and content review will identify additional instances of misuse of user data or other undesirable activity by third parties on the Platform
3. 61BNC’s products and internal systems rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in BNC’s systems, could adversely affect BNC’s business

Risks Related to askROI

1. 62We rely on an exclusive LLM licensing arrangement and a platform development agreement with the same primary developer, even though we maintain ownership of the askROI platform’s IP
2. 63Despite our multi-LLM routing model, performance or reliability issues with our primary development partner’s LLM could still harm our product quality and reputation
3. 64askROI faces risks commonly associated with start-up companies
4. 65askROI faces adoption and integration and other challenges
5. 66Rapidly changing AI regulation may require significant adjustments and investments
6. 67Data privacy and security laws could increase compliance costs and limit our flexibility
7. 68Established technology companies with greater resources may outcompete us
8. 69Our future success depends on ongoing innovation and technological advancements
9. 70Our platform’s integration with third-party tools and systems may present technical and operational risks
10. 71We rely on secure workspaces and knowledge bases that may still pose data exposure risks
11. 72Inaccurate or biased AI outputs could expose us to reputational and legal risks
12. 73Our proprietary rights could be inadequately protected, leading to IP disputes
13. 74Customer retention risks could pose a challenge for askROI
14. 75Uncertain legal interpretations of emerging AI regulations could lead to operational constraints
15. 76If we fail to effectively manage our growth, our business could suffer

Risks Related to TurnOnGreen

1. 77TurnOnGreen can provide no assurance of any successful expansion of its operations
2. 78Changes in U.S. and international trade policies, particularly with respect to China, and key trading countries, may adversely impact TurnOnGreen’s business and operating results
3. 79TurnOnGreen is in a highly competitive EV charging services industry and there can be no assurance that TurnOnGreen will be able to compete with many of its competitors which are larger and have greater financial resources

Risks Related to Ownership of Our Class A Common Stock and Future Offerings

1. 80The listing of our Class A common stock on the NYSE American is contingent on our compliance with the NYSE American’s conditions for continued listing
2. 81You may experience future dilution as a result of future equity offerings
3. 82Our Class A common stock price is volatile
4. 83Volatility in our Class A common stock price may subject us to securities litigation
5. 84We have a substantial number of convertible notes, warrants and preferred stock outstanding that could affect our price
6. 85Our limited operating history makes it difficult to evaluate our future business prospects and to make decisions based on our historical performance
7. 86Deterioration of global economic conditions could adversely affect our business
8. 87If our accounting controls and procedures are circumvented or otherwise fail to achieve their intended purposes, our business could be seriously harmed
9. 88Our internal computer systems may fail or suffer security breaches, which could result in a material disruption of our operations
10. 89We face significant competition, including changes in pricing
11. 90Many of our competitors are larger and have greater financial and other resources than we do
12. 91Our growth strategy is subject to a significant degree of risk
13. 92Changes in the U.S. tax and other laws and regulations may adversely affect our business
14. 93Our sales and profitability may be affected by changes in economic, business and industry conditions
15. 94The rights of the holders of common stock may be impaired by the potential issuance of preferred stock
16. 95The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members
17. 96The elimination of monetary liability against our directors, officers and employees under law and the existence of indemnification rights for or obligations to our directors, officers and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees
18. 97We do not anticipate paying cash dividends on our common stock and, accordingly, stockholders must rely on stock appreciation for any return on their investment