Lite Strategy (LITS) risk factors, FY2026 10-K

Risks Related to Investing in Litecoin

1. 01The price of Litecoin has been and will likely continue to be, highly volatile
2. 02The launch of central bank digital currencies (CBDCs) may adversely impact our business
3. 03We 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 operations42% rewritten
4. 04Regulatory change reclassifying Litecoin as a security could lead to our falling within the definition of “investment company” under the Investment Company Act of 1940, as amended, or the 1940 Act and could adversely affect the market price of Litecoin and the market price of our common stock
5. 05We 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

Risks Related to Our Financial Condition and Capital Requirements

1. 06We have incurred significant losses from our inception and we anticipate that we may incur losses in the foreseeable future89% rewritten
2. 07We may need to raise additional capital to continue such development of our pre-clinical drug development programs or our Litecoin Treasury StrategyNew

Risks Related to Our Intellectual Property

1. 08The value of our intellectual property is dependent, in part, on obtaining and maintaining patent protection and preserving trade secrets, which cannot be guaranteed

General Business Risks

1. 09Our employees, independent contractors, consultants or commercial partners may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business
2. 10Our business and operations would suffer in the event of system failures
3. 11Our efforts will be seriously jeopardized if we are unable to retain and attract key employees
4. 12Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators
5. 13Laws, rules and regulations relating to public companies may be costly and impact our ability to attract and retain directors and executive officers
6. 14Security breaches and privacy, data protection, cybersecurity, operational resilience and Artificial Intelligence (AI) issues could compromise our information and systems and expose us to liability, which would cause our business and reputation to suffer62% rewritten
7. 15If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business
8. 16We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
9. 17Limitations on the deductibility of net operating losses could adversely affect our business and financial condition

Risks Related to Securities Markets and Investment in our Stock

1. 18We are currently operating in a period of capital markets disruption and economic uncertainty45% rewritten
2. 19If we fail to comply with the continued listing standards of the Nasdaq Capital Market, we may be delisted and the price of our common stock, our ability to access the capital markets and our financial condition could be negatively impacted
3. 20The trading price of the shares of our common stock has been and may continue to be highly volatile and could decline in value and we may incur significant costs from class action litigation
4. 21Future sales of our common stock, including common stock issued upon exercise of outstanding warrants or options, may depress the market price of our common stock and cause stockholders to experience dilution55% rewritten
5. 22Other than as described below or in connection with a strategic transaction we do not intend to pay and we have not paid, any cash dividends on our shares of common stock. Our stockholders will not be able to receive a return on their shares unless the value of our common stock appreciates and they sell their shares34% rewritten
6. 23We will have broad discretion over the use of the net proceeds from any exercise of outstanding warrants and options
7. 24We are authorized to issue blank check preferred stock, which could adversely affect the holders of our common stock
8. 25Anti-takeover provisions contained in our amended and restated certificate of incorporation and sixth amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt
9. 26Any person or entity purchasing or otherwise acquiring or holding any interest in our shares of capital stock shall be deemed to have notice of and consented to such provisions
10. 27Our executive officer and directors may sell shares of their stock and these sales could adversely affect our stock price