Miami International Holdings (MIAX) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01If the amount of trading volume on our exchanges or through our FCM were to decrease, we would likely see a decrease in fees. If we are unable to maintain our current trading volume or grow the trading volume on our exchanges or through our FCM, our financial performance would be negatively affected
2. 02Global economic, political and financial market events or conditions may negatively impact our business
3. 03trading volumes could also result in a corresponding decrease in the demand for our market data, which would further reduce our overall revenue
4. 04We may face risks related to supply chain interruptions that result from AI companies working on the increased adoption, application and development of AI globally, which could have a material adverse effect on our business, operating results and financial condition
5. 05Global trade policies, including the assessment of tariffs and other impositions on imported goods, may have a material adverse impact on our business
6. 06Our failure to maintain order flow from order flow providers could negatively affect our results of operations
7. 07We cannot predict whether the firms that participated in our ERPs will continue to be incentivized to provide the same level of order flow to our MIAX Exchanges after such participants have sold their shares of our common stock
8. 08Revenues from our market data fees, access fees and other non-transaction fees on our MIAX Exchanges may be reduced due to declines in our market share, trading volumes or regulatory changes
9. 09We face intense competition. If we are unable to successfully compete, our business, financial condition and operating results may be materially adversely affected
10. 10materially adversely affected if we cannot successfully develop, introduce and/or market new services and products or if we need to adopt costly and customized technology for our services and products
11. 11Our business may be adversely affected by price competition
12. 12Competition from other venues with respect to our proprietary products could negatively impact our revenues
13. 13We are dependent on the members of our senior management team and other key personnel
14. 14Our success also depends largely on the efforts and abilities of the other key members of our senior management team a number of whom have worked together closely since MIH’s inception in 2007
15. 15our senior management team has a different area of specialization, the departure of any one of these individuals could create a deficiency in one of the core aspects of our business
16. 16We are dependent on highly skilled employees with experience in our industry and a failure to attract and retain highly skilled employees could adversely affect our business, financial condition and our future growth
17. 17Financial or other problems experienced by third parties could have an adverse effect on our business
18. 18Our cost structure is largely fixed. If our revenues decline and we are unable to reduce our costs, our profitability will be adversely affected

Risks Related to Owning a Clearing House

1. 19We are exposed to risks related to defaults by clearing members and liquidity risks
2. 20The MIAX Futures clearing house may incur large credit exposures on final settlement days
3. 21clearing house has used other techniques (prepayment, third-party guarantees) to limit the size of exposures or the risk of loss
4. 22Settlement bank failures could pose both credit risks and liquidity risks to the MIAX Futures clearing house
5. 23The MIAX Futures clearing house may also make demand deposits with banks that are secured only to the value of FDIC insurance or other national deposit guarantee schemes, which is small, and therefore, the deposits may in significant part be lost in the event one of these banks becomes insolvent

Risks Related to Owning an FCM

1. 24Dorman Trading is subject to margin funding requirements on short notice
2. 25Dorman Trading is exposed to counterparty credit risk whereby the failure by persons with whom it does business to meet their financial obligations could adversely affect the business, financial condition and results of operations of Dorman Trading
3. 26Dorman Trading is subject to risk of default by financial institutions that hold its funds and its customers’ funds
4. 27Dorman Trading relies on relationships with introducing brokers for obtaining some of its clients and its business could be harmed by failure to maintain relationships with these introducing brokers and Dorman Trading’s business or reputation could be harmed by such introducing broker misconduct or errors
5. 28Dorman Trading’s risk management policies and procedures may leave it exposed to unidentified or unanticipated risks, which could harm its business

Risks Related to Our Growth Strategy

1. 29We may not be successful in offering new services or product offerings, including the Bloomberg Products or other proprietary products or the technologies to support these products
2. 30We have experienced significant growth in our business since our inception in 2007. While the MIAX Exchange Group’s overall market share has increased since the launch of MIAX Options, there is no guarantee this will continue in the future
3. 31We may fail to realize the anticipated cost savings, growth opportunities, synergies and other benefits anticipated from mergers and acquisitions or strategic alliance transactions

Risks Related to our Technology

1. 32We may not be able to keep up with rapid technological changes affecting our industry
2. 33If we experience significant or recurring systems failures or capacity constraints, our reputation may be harmed and we may experience a loss of business
3. 34If any of these events occur, our business, financial condition and results of operations could be materially adversely affected
4. 35Our continued growth may require significant investments in technology. If we are unable to increase the capacity and capabilities of our systems, or implement the financial futures trading system at MIAX Futures on a timely basis, our business could be materially adversely affected
5. 36The technology upon which we rely, including technology provided by third parties, may be vulnerable to security risks, cybersecurity risks, operational disruptions, and other risks and events that could harm our business
6. 37Our role in the global financial system positions us at a greater risk for cyberattacks, cyberterrorism and other cybersecurity risks
7. 38We depend on third-party providers for key components and services that are important to our business. An interruption or cessation of such components or services by any third party could have a material adverse effect on our business
8. 39In addition, we currently rely on FINRA to perform certain regulatory functions on behalf of the MIAX Exchanges pursuant to an RSA which we entered into in 2014. However, we maintain ultimate responsibility for the regulatory activities of the MIAX Exchanges
9. 40Our use of open source software code may subject our software to general release or require us to re-engineer our software, which could harm our business
10. 41Our products, platforms, and internal systems rely on software that is highly technical, and if these systems contain errors, bugs or vulnerabilities, or if we are unsuccessful in addressing or mitigating technical limitations or vulnerabilities in our systems, our business could be adversely affected
11. 42If we determine to use AI in any of our products, it may be unsuccessful and may give rise to various risks, which could adversely affect our business, reputation or operating results

Risks Related to Our Financial Position

1. 43We may not be able to accurately predict our future capital needs, and we may not be able to obtain future financing to fund our operations on favorable terms or at all
2. 44We have issued warrants exercisable for our securities, which if exercised, would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders
3. 45We may be required to recognize impairments of our goodwill, other intangible assets or investments
4. 46Pyth tokens are based on a highly volatile asset, and fluctuations in the price of Pyth tokens have in the past affected and may affect our financial results in the future

Risks Related to Legal and Regulatory Matters

1. 47MIAX Options, MIAX Pearl, MIAX Emerald and MIAX Sapphire are registered national securities exchanges and SROs, and, as such, are subject to comprehensive regulation by the SEC
2. 48MIAX Futures is subject to comprehensive regulation by the CFTC
3. 49Dorman Trading is subject to comprehensive regulation by the CFTC
4. 50Regulatory action adversely affecting proprietary products exclusively licensed by us may negatively impact our revenues derived from those products
5. 51Our ability to implement or amend rules or regulatory approval orders could be limited or delayed because of regulatory oversight, review or approval or a government shutdown, which could negatively affect our ability to implement needed changes or expand our products or services
6. 52We may be subject to censures, fines and other legal proceedings if we fail to comply with legal and regulatory obligations
7. 53There may be regulatory hurdles to launching new products and if we fail to obtain any required regulatory approvals, such failure may result in delays or restrictions on our ability to benefit fully from these offerings
8. 54Changes to the legislative or regulatory environment may impose new or unanticipated burdens on one or more of our exchanges or the MIAX Futures clearing house, which could have a material adverse effect on our business, financial condition and operating results
9. 55Regulatory changes to CAT where we could not collect fees for our costs could have a material impact on us. See “Business — Regulatory Environment and Compliance — Regulation NMS and Industry Plans - the MIAX Exchanges — Consolidated Audit Trail Plan”
10. 56Changes in the tax laws and regulations affecting us, our products, offerings and our market participants could have a material adverse effect on our business
11. 57Our ability to use certain net operating loss carryforwards and certain other tax attributes may be limited if we undergo an “ownership change” for U.S. federal income tax purposes
12. 58Our exchanges have self-regulatory obligations that may create conflicts of interest
13. 59Our compliance with data privacy and data protection laws may result in greater costs for us
14. 60Our ability to comply with all applicable laws and regulations is largely dependent on our establishment and maintenance of compliance, risk, audit and reporting systems and procedures, as well as our ability to attract and retain qualified compliance personnel
15. 61We could be harmed by misconduct or errors that are difficult to detect and deter
16. 62We are subject to litigation risks, regulatory compliance risks and associated enforcement risks, and other liabilities
17. 63activities in the United States, and we could be exposed to liability under foreign, national and local laws, court decisions and rules and regulations promulgated by regulatory agencies

Risks Related to Intellectual Property

1. 64We and our licensors may not be able to protect, maintain, defend, or enforce our respective intellectual property rights. This could adversely affect our business, financial condition and results of operations
2. 65We may not be able to obtain, maintain, protect, defend and enforce our patents, thereby harming our competitive position
3. 66We may not be able to obtain, maintain, protect and enforce our trademarks and trade names, or build name recognition in our markets of interest, thereby harming our competitive position
4. 67If we fail to comply with our obligations under license or technology agreements with third parties or are unable to license rights to use technologies on reasonable terms, we may be required to pay damages and could potentially lose license rights that are critical to our business
5. 68The failure of third parties with which we have material agreements to meet their contractual and other obligations could adversely affect our business
6. 69Any infringement by us on intellectual property rights of others could have a material adverse effect on our business

Risks Related to Our Common Stock

1. 70Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause the price of our common stock to decline
2. 71If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline
3. 72An active, liquid trading market for our common stock may not be maintained
4. 73If financial analysts issue inaccurate or unfavorable research regarding, or do not or cease to cover, our common stock, our stock price and trading volume could decline
5. 74The market price of our common stock is subject to fluctuations and may not reflect our long-term value at any given time, and we may be subject to securities litigation as a result
6. 75Certain members of our exchanges are also stockholders of MIH and may have conflicts of interest with non-member stockholders
7. 76Our amended and restated certificate of incorporation contains provisions that set ownership and voting limitations and a right to redeem shares transferred or owned in violation of these provisions, and there are also certain other regulatory limitations on the ownership and transfer of our capital stock
8. 77stock either alone or together with any related persons, in each case subject to certain conditions and exceptions, including the waiver by the board of directors (except with respect to exchange members). These limitations may impede a change of control transaction
9. 78Certain provisions in our amended and restated certificate of incorporation and amended and restated by-laws contain provisions that may make the acquisition of our Company more difficult
10. 79We do not currently intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
11. 80Global health crises, pandemics and other health risks could negatively affect our business
12. 81Climate-related risks could pose operational, commercial, and financial risks
13. 82If we fail to continue to implement and maintain effective internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports