What the changes say
- The company completed a pivot into cryptocurrency trading, replacing hardware and mobile device risks with digital asset market risks.
- Financial distress is severe, carrying a going concern warning and three recent reverse stock splits.
- Compliance failures include dropping below Nasdaq's $2.5 million stockholders equity minimum in August 2025.
What changed since the prior 10-K
New
- NewRisks Related to Our Business and Industry
The future development and growth of crypto is subject to a variety of factors that are difficult to predict and evaluate. If crypto does not grow as we expect, our business, operating results, and financial condition could be adversely affected
The crypto assets and blockchain networks we rely on are early-stage, experimental, and subject to unpredictable development and governance outcomes.
- NewRisks Related to Our Business and Industry
In the U.S., any particular cryptocurrency’s status as a ‘security’ is subject to a high degree of uncertainty and if we have not properly characterized one or more cryptocurrencies, we might be subject to regulatory scrutiny, investigations, fines, and other penalties
If we incorrectly characterize a cryptocurrency as a non-security, we face SEC investigations, fines, and penalties.
- NewRisks Related to Our Business and Industry
Cryptocurrency laws, regulations, and accounting standards are often difficult to interpret and are rapidly evolving in ways that are difficult to predict. Changes in these laws and regulations, or our failure to comply with them, could negatively impact cryptocurrency trading on our platform
California enacted the Digital Financial Assets Law on October 13, 2023, imposing strict licensing and compliance rules effective July 1, 2026.
- NewRisks Related to Our Business and Industry
A temporary or permanent blockchain “fork” could adversely affect our business
Open source blockchain protocols can split into competing networks through a fork if miners and users reject proposed software modifications.
- NewRisks Related to Our Business and Industry
We currently rely on third-party service providers for certain aspects of our operations, and any interruptions in services provided by these third parties may impair our ability to support our customers
We depend entirely on third-party cloud providers, payment processors, and financial institutions to operate our platform and service customers.
- NewRisks Related to Our Business and Industry
Our success will depend on our ability to respond to changing technologies and customer requirements, effectively stimulate customer demand for new and upgraded products, and our ability to develop and introduce new and enhanced products in a cost-effective and timely manner
If our new crypto products fail to gain market acceptance, we may be forced to seek bankruptcy protection.
- NewRisks Related to Our Business and Industry
We face significant competition in developing and selling our solutions. Our primary competitors are larger trading platforms such as Galaxy Digital (NASDAQ: GLXY) and Coinbase (NASDAQ: COIN)
We face intense competition from larger, better-funded crypto trading platforms such as Coinbase and Galaxy Digital.
- NewRisks Related to Our Business and Industry
The market for our trading platform enhancements may not develop as quickly as we expect or may not develop at all
Customer adoption of our trading platform enhancements may be slower than anticipated or fail to materialize entirely.
- NewRisks Related to Our Financial Condition
The report of our independent registered public accounting firm for the year ended December 31, 2025 contains a statement with respect to substantial doubt as to our ability to continue as a going concern. We may not be able to continue as a going concern if we are unable to raise additional funding
Our independent auditor issued a going concern warning for the year ended December 31, 2025, due to recurring losses and negative cash flows.
- NewRisks Related to Our Financial Condition
We are not currently profitable with our current trading volume and commission revenue and we may not achieve or maintain profitability in the future
We have not generated sufficient commission revenue to cover operating expenses since acquiring our crypto trading platform on December 15, 2025.
- NewRisks Related to Information Technology and Intellectual Property
Our products and services rely on software and systems that are highly technical and have been, and may in the future be, subject to interruption, instability, and other potential flaws due to software errors, design defects, and other processing, operational, and technological failures, whether internal or external
Our technical systems are vulnerable to software errors, cyberattacks, and third-party disruptions that can halt customer transactions.
- NewRisks Related to Information Technology and Intellectual Property
(2) laws imposing obligations on businesses that collect or disclose biometric information (including, in Illinois, Texas, and Washington)
We must comply with biometric privacy laws in Illinois, Texas, and Washington, as well as GDPR in Europe and the UK.
- NewRisks Related to Ownership of Our Common Stock
If we do not meet these continued listing requirements, our common stock could be delisted
- NewRisks Related to Ownership of Our Common Stock
During challenging economic times or as a result of political changes, our customers may tighten their budgets and face constraints in gaining timely access to sufficient funding or other credit, which could result in an impairment of their ability to allocate assets for investments
Dropped
- DroppedRisks Related to Our Business and Industry
We participate in a competitive industry, which may become more competitive. Competitors with greater resources and significant experience in high-volume product manufacturing may be able to respond more quickly and cost-effectively than we can to new or emerging technologies and changes in customer requirements
- DroppedRisks Related to Our Business and Industry
We rely on our channel partners to generate a substantial amount of our revenue. If we are unable to maintain successful relationships with channel partners, our business, operating results, and financial condition could be adversely affected
Competition in rugged and non-rugged mobile devices from Apple, Samsung, and Kyocera.
- DroppedRisks Related to Our Business and Industry
We are materially dependent on the adoption of our solutions by both the industrial enterprise and public sector markets, and if end customers in those markets do not purchase our solutions, our revenues will be adversely impacted, and we may not be able to expand into other markets
- DroppedRisks Related to Our Business and Industry
We have outsourced contract manufacturing, product assembly, and some of our software development operations to third parties located in Asia
Reliance on three major U.S. wireless carriers for 62% of 2024 revenue.
- DroppedRisks Related to Our Business and Industry
We have engaged in related-party transactions and may continue to rely on related parties for key business activities, which could create conflicts of interest and adversely affect our business
- DroppedRisks Related to Our Business and Industry
We are required to undergo a lengthy customization and certification process for each wireless carrier customer, which increases our operating expenses and cost of revenue, and failure to obtain such certification would adversely impact our results of operations and financial condition
Dependence on industrial enterprise and public sector adoption of mobile solutions.
- DroppedRisks Related to Our Business and Industry
We experience lengthy sales cycles for our products and the delay of an expected large order could result in a significant unexpected revenue shortfall
Outsourced contract manufacturing of devices in Asia.
- DroppedRisks Related to Our Business and Industry
If we fail to adequately forecast demand for our inventory and supply needs, we could incur additional costs or experience manufacturing delays, which could reduce our gross margin or cause us to delay or even lose sales
Related-party engineering transactions with affiliates of director Jeffrey Wang.
- DroppedRisks Related to Our Business and Industry
The markets for our mobile devices and related accessories may not develop as quickly as we expect or may not develop at all
- DroppedRisks Related to Our Business and Industry
Our dependence on third-party suppliers for key components of our products could delay shipment of our products and reduce our sales
- DroppedRisks Related to Our Business and Industry
If we are unable to sell our solutions into new markets, our revenues may not grow
Lengthy technical acceptance and certification processes required by wireless carriers.
- DroppedRisks Related to Our Business and Industry
Changes in the availability of federal funding to support local public safety or other public sector efforts could impact our opportunities with public sector end customers
Extended sales cycles and risk of delayed large orders from enterprise buyers.
- DroppedRisks Related to Our Business and Industry
Failure of our suppliers, subcontractors, distributors, resellers, and representatives to use acceptable legal or ethical business practices, or to fail for any other reason, could negatively impact our business
Forecasting inventory demand without firm purchase commitments from major customers.
- DroppedRisks Related to Our Financial Condition
We have not been profitable in recent years and may not achieve or maintain profitability in the future
Market adoption transition from LMR and PTT to smartphone and cellular networks.
- DroppedRisks Related to Information Technology and Intellectual Property
Our use of open-source software could subject us to possible litigation or otherwise impair the development of our products
Reliance on third-party suppliers for custom plastic, machined, and circuit board components.
- DroppedRisks Related to Information Technology and Intellectual Property
Our inability to obtain and maintain any third-party license required to develop new products and product enhancements could seriously harm our business, financial condition, and results of operations
- DroppedRisks Related to Information Technology and Intellectual Property
(3) laws regulating internet-connected devices (such as, in California, the Internet of Things Security Law)
Ability to sell solutions into new public safety and first responder markets.
- DroppedRisks Related to Legal and Regulatory Matters
Changes in U.S. trade policy, including the imposition of tariffs and restrictions and the resulting consequences, may have a material adverse impact on our business, operating results, and financial condition
Availability of U.S. federal funding to support local public safety purchases.
- DroppedRisks Related to Legal and Regulatory Matters
We are subject to a wide range of product-, consumer-, worker- safety and environmental laws and regulations
- DroppedRisks Related to Ownership of Our Common Stock
Stockholder activism—ranging from proxy contests and hostile bids to public campaigns and litigation—has become increasingly prevalent. Declines in our stock price may heighten our vulnerability to unsolicited approaches, potentially disrupting our business strategy and operations
- DroppedRisks Related to Ownership of Our Common Stock
Our evaluation of strategic alternatives may not lead to a favorable outcome and could create business disruption and stock price volatility
- DroppedRisks Related to Ownership of Our Common Stock
Resales of our common stock may cause the market price of our securities to drop significantly
- DroppedRisks Related to Ownership of Our Common Stock
Foreign currency fluctuations may reduce our competitiveness and sales in foreign markets
Reworded
- 100% rewrittenRisks Related to Ownership of Our Common Stock
Our business and operations could be negatively affected if we become subject to stockholder activism or hostile bids, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price
Added specific references to stockholder activism, proxy contests, hostile bids, public campaigns, and litigation.
- 95% rewrittenRisks Related to Our Business and Industry
To become competitive and stimulate consumer demand, we must successfully manage the introduction of services and the transition and enhancement of existing services
Shifted focus from hardware obsolescence and custom mobile solutions to general service introductions and competitive digital demands.
Was: To remain competitive and stimulate consumer and business demand, we must successfully manage the introduction of new products and product lines and the transition and enhancement of existing products
- 94% rewrittenRisks Related to Legal and Regulatory Matters
Changes in laws and regulations concerning trading of cryptocurrencies could increase our costs and adversely impact our business
Pivoted from telecommunication bandwidth regulations for mobile devices to cryptocurrency trading regulations.
Was: Changes in laws and regulations concerning the use of telecommunication bandwidth could increase our costs and adversely impact our business
- 89% rewrittenRisks Related to Ownership of Our Common Stock
We are required to meet the Nasdaq continued listing requirements and other Nasdaq rules, or we may risk delisting. Delisting could negatively affect the price of our common stock, which could make it more difficult for us to sell securities in a future financing or for you to sell our common stock
Updated to reflect three reverse stock splits in five years and a August 22, 2025 Nasdaq notice for failing the $2.5 million stockholders equity rule.
- 82% rewrittenRisks Related to Our Business and Industry
We continue to grow our business. The assumptions underlying these efforts may prove to be inaccurate, or we may fail to achieve the expected benefits from these efforts, and we may have to change our growth model in the future
Removed references to business restructuring and transformation initiatives.
Was: We continue to transform our business. The assumptions underlying these efforts may prove to be inaccurate, or we may fail to achieve the expected benefits from these efforts, and we may have to restructure or transform our business again in the future
- 78% rewrittenRisks Related to Our Business and Industry
Our future success is dependent on our ability to create independent brand awareness for our company and products with potential customers, and our inability to achieve such brand awareness could limit our prospects
Added specific expectation that sales and marketing expenses will increase via social and traditional media.
Was: Our future success is dependent on our ability to create independent brand awareness for our company and products with end customers, and our inability to achieve such brand awareness could limit our prospects
- 69% rewrittenRisks Related to Ownership of Our Common Stock
Economic uncertainties or downturns, or political changes, could limit the availability of funds to our customers and potential customers, which could significantly adversely impact our business
Retained general economic uncertainty factors without material changes to the text.
- 58% rewrittenRisks Related to Our Financial Condition
Our ability to use our net operating losses to offset future taxable income will be subject to certain limitations
Updated federal and state net operating loss carryforwards to $13.4 million for 2025 down from $120.1 million in 2024.
- 55% rewrittenRisks Related to Ownership of Our Common Stock
Our quarterly results may vary significantly from period to period, which could make our future results difficult to predict and could cause our operating results to fall below investor, analyst, or our expectations
- 53% rewrittenRisks Related to Our Business and Industry
If our products contain defects or errors, we could incur significant unexpected expenses, lose revenue, suffer damage to our brand and reputation, and be subject to liability claims
Was: If our products contain defects or errors, we could incur significant unexpected expenses, experience product returns and lost sales, experience product recalls, suffer damage to our brand and reputation, and be subject to product liability or other claims
- 53% rewrittenRisks Related to Information Technology and Intellectual Property
Others may claim that we infringe on their intellectual property rights, which may result in costly and time-consuming litigation and could delay or otherwise impair the development and commercialization of our products
- 48% rewrittenRisks Related to Ownership of Our Common Stock
Sales of our common stock under resale registration statements or the perception of such sales in the public market or otherwise could cause the market price for our common stock to decline, even if our business is doing well
- 45% rewrittenRisks Related to Our Business and Industry
We are dependent on the continued services and performance of a concentrated and limited group of senior management and other key personnel, the loss of any of whom could adversely impact our business
- 24% rewrittenRisks Related to Information Technology and Intellectual Property
A security breach or other significant disruption of our IT systems or those of our partners, suppliers, or manufacturers, caused by cyberattacks or other means, could have a negative impact on our operations, sales, and operating results
- 23% rewrittenRisks Related to Legal and Regulatory Matters
We are subject to anti-corruption, anti-bribery, anti-money laundering, economic sanctions, export control, and similar laws. Non-compliance with such laws can subject us to criminal or civil liability and harm our business, revenues, financial condition, and results of operations
- 21% rewrittenRisks Related to Ownership of Our Common Stock
Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect our business, results of operations, and financial condition
All 42 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business and Industry
- 01The future development and growth of crypto is subject to a variety of factors that are difficult to predict and evaluate. If crypto does not grow as we expect, our business, operating results, and financial condition could be adversely affectedNew
- 02In the U.S., any particular cryptocurrency’s status as a ‘security’ is subject to a high degree of uncertainty and if we have not properly characterized one or more cryptocurrencies, we might be subject to regulatory scrutiny, investigations, fines, and other penaltiesNew
- 03Cryptocurrency laws, regulations, and accounting standards are often difficult to interpret and are rapidly evolving in ways that are difficult to predict. Changes in these laws and regulations, or our failure to comply with them, could negatively impact cryptocurrency trading on our platformNew
- 04A temporary or permanent blockchain “fork” could adversely affect our businessNew
- 05We currently rely on third-party service providers for certain aspects of our operations, and any interruptions in services provided by these third parties may impair our ability to support our customersNew
- 06To become competitive and stimulate consumer demand, we must successfully manage the introduction of services and the transition and enhancement of existing services95% rewritten
- 07Our success will depend on our ability to respond to changing technologies and customer requirements, effectively stimulate customer demand for new and upgraded products, and our ability to develop and introduce new and enhanced products in a cost-effective and timely mannerNew
- 08We face significant competition in developing and selling our solutions. Our primary competitors are larger trading platforms such as Galaxy Digital (NASDAQ: GLXY) and Coinbase (NASDAQ: COIN)New
- 09We are dependent on the continued services and performance of a concentrated and limited group of senior management and other key personnel, the loss of any of whom could adversely impact our business45% rewritten
- 10We continue to grow our business. The assumptions underlying these efforts may prove to be inaccurate, or we may fail to achieve the expected benefits from these efforts, and we may have to change our growth model in the future82% rewritten
- 11If our products contain defects or errors, we could incur significant unexpected expenses, lose revenue, suffer damage to our brand and reputation, and be subject to liability claims53% rewritten
- 12If our business does not grow as we expect, or if we fail to manage our growth effectively, our operating results and business will suffer
- 13The market for our trading platform enhancements may not develop as quickly as we expect or may not develop at allNew
- 14Our future success is dependent on our ability to create independent brand awareness for our company and products with potential customers, and our inability to achieve such brand awareness could limit our prospects78% rewritten
- 15We are exposed to risks associated with strategic transactions
Risks Related to Our Financial Condition
- 16The report of our independent registered public accounting firm for the year ended December 31, 2025 contains a statement with respect to substantial doubt as to our ability to continue as a going concern. We may not be able to continue as a going concern if we are unable to raise additional fundingNew
- 17We may not generate sufficient liquidity to operate our business and maintain its growth
- 18We are not currently profitable with our current trading volume and commission revenue and we may not achieve or maintain profitability in the futureNew
- 19Our ability to use our net operating losses to offset future taxable income will be subject to certain limitations58% rewritten
Risks Related to Information Technology and Intellectual Property
- 20Our products and services rely on software and systems that are highly technical and have been, and may in the future be, subject to interruption, instability, and other potential flaws due to software errors, design defects, and other processing, operational, and technological failures, whether internal or externalNew
- 21A security breach or other significant disruption of our IT systems or those of our partners, suppliers, or manufacturers, caused by cyberattacks or other means, could have a negative impact on our operations, sales, and operating results24% rewritten
- 22If we are unable to successfully protect our intellectual property, our competitive position may be harmed
- 23Others may claim that we infringe on their intellectual property rights, which may result in costly and time-consuming litigation and could delay or otherwise impair the development and commercialization of our products53% rewritten
- 24Increasing regulatory focus on privacy and cybersecurity issues and expanding laws could expose us to liability, subject us to lawsuits, investigations, and other liabilities and restrictions on our operations that could significantly and adversely affect our business
- 25(2) laws imposing obligations on businesses that collect or disclose biometric information (including, in Illinois, Texas, and Washington)New
Risks Related to Legal and Regulatory Matters
- 26Changes in laws and regulations concerning trading of cryptocurrencies could increase our costs and adversely impact our business94% rewritten
- 27The unfavorable outcome of any future litigation, arbitration, or administrative action could have a significant adverse impact on our financial condition or results of operations
- 28We may incur substantial costs and receive adverse outcomes in litigation, regulatory investigations, and other legal matters in connection with alleged violations of securities laws and regulations
- 29We are subject to anti-corruption, anti-bribery, anti-money laundering, economic sanctions, export control, and similar laws. Non-compliance with such laws can subject us to criminal or civil liability and harm our business, revenues, financial condition, and results of operations23% rewritten
- 30The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business
Risks Related to Ownership of Our Common Stock
- 31Our business and operations could be negatively affected if we become subject to stockholder activism or hostile bids, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price100% rewritten
- 32We are required to meet the Nasdaq continued listing requirements and other Nasdaq rules, or we may risk delisting. Delisting could negatively affect the price of our common stock, which could make it more difficult for us to sell securities in a future financing or for you to sell our common stock89% rewritten
- 33If we do not meet these continued listing requirements, our common stock could be delistedNew
- 34Sales of our common stock under resale registration statements or the perception of such sales in the public market or otherwise could cause the market price for our common stock to decline, even if our business is doing well48% rewritten
- 35Our quarterly results may vary significantly from period to period, which could make our future results difficult to predict and could cause our operating results to fall below investor, analyst, or our expectations55% rewritten
- 36The financial and operational projections that we may provide from time to time are subject to inherent risks
- 37Some provisions of Delaware law and our certificate of incorporation and bylaws may delay or prevent a change in control and may discourage bids for our common stock at a premium over its market price
- 38The market price of our common stock could be subject to wide fluctuations in response to, among other things, the factors described in this “Risk Factors” section or otherwise, and other factors beyond our control, such as fluctuations in the valuations of companies perceived by investors to be comparable to us
- 39Natural or man-made disasters and other similar events may significantly disrupt our business and negatively impact our operating results and financial condition
- 40Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect our business, results of operations, and financial condition21% rewritten
- 41Economic uncertainties or downturns, or political changes, could limit the availability of funds to our customers and potential customers, which could significantly adversely impact our business69% rewritten
- 42During challenging economic times or as a result of political changes, our customers may tighten their budgets and face constraints in gaining timely access to sufficient funding or other credit, which could result in an impairment of their ability to allocate assets for investmentsNew
Other DNA X 10-Ks
- FY2024 10-K risk factors51 risks
Concentrated customer base relying heavily on top U.S. wireless carriers and foreign contract manufacturing in Asia.
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.