TON Strategy (TONX) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01We have incurred significant net losses and cannot assure you that we will achieve or maintain profitable operations
2. 02Public health threats, natural disasters and other events beyond our control, have had and may continue to have a significant negative impact on our business, sales, results of operations and financial condition
3. 03Our ability to grow and compete in the future will be adversely affected if adequate capital is not available to us or not available on terms favorable to us
4. 04Our indebtedness, and the agreements governing such indebtedness, subject us to required debt service payments, as well as financial restrictions and operating covenants, any of which may reduce our financial flexibility and affect our ability to operate our business
5. 05For additional information refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”
6. 06There is a risk of dependence on one or a group of customers
7. 07The market in which we operate is intensely competitive and, if we do not compete effectively, our operating results could be harmed
8. 08We may not be able to increase the number of our strategic relationships or grow the revenues received from our current strategic relationships
9. 09We may not be able to develop enhancements and new features to our existing service or acceptable new services that keep pace with technological developments
10. 10Our ability to deliver our services is dependent on third party Internet providers
11. 11Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer
12. 12Our success depends, in part, on the capacity, reliability, and security of our information technology hardware and software infrastructure, as well as our ability to adapt and expand our infrastructure
13. 13We have integrated, and may continue to integrate in the future, AI in certain tools and features available on our platform. AI technology presents various operational, compliance, and reputational risks and if any such risks were to materialize, our business and results of operations may be adversely affected
14. 14We may be subject to risks associated with artificial intelligence and machine learning technology
15. 15We are dependent on third parties to, among other things, maintain our servers, provide the bandwidth necessary to transmit content, and utilize the content derived therefrom for the potential generation of revenues
16. 16We may not be able to find suitable software developers at an acceptable cost or at all
17. 17The success of our business is highly correlated to general economic conditions
18. 18Our failure to adequately protect our intellectual property rights could diminish the value of our products, weaken our competitive position and reduce our revenue, and infringement claims asserted against us or by us, could have a material adverse effect
19. 19Natural disasters and other events beyond our control could materially adversely affect us
20. 20Our future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel

Risks Related to an Investment in Our Securities

1. 21If we are not able to comply with the applicable continued listing requirements or standards of The NASDAQ Capital Market, The NASDAQ Capital Market could delist and adversely affect the market price and liquidity of our common stock
2. 22These continued listing standards include specifically enumerated criteria, such as a $1.00 minimum closing bid price and a requirement that we maintain stockholders’ equity of at least $2,500,000
3. 23Our issuance of additional shares of preferred stock could adversely affect the market value of our common stock, dilute the voting power of common stockholders and delay or prevent a change of control
4. 24A decline in the price of our common stock could affect our ability to raise further working capital, which could adversely impact our ability to continue operations
5. 25Because we do not intend to pay any cash dividends on our shares of common stock in the near future, our stockholders will not be able to receive a return on their shares unless and until they sell them
6. 26If our common stock trades at a price less than $5.00 it would be categorized as a “penny stock”, which may make it more difficult for investors to sell their shares of common stock due to suitability requirements
7. 27The Financial Industry Regulatory Authority, Inc. has adopted sales practice requirements that historically may have limited a stockholder’s ability to buy and sell our common stock, which could depress the price of our common stock
8. 28Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of us
9. 29Our bylaws contain an exclusive forum provision, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents
10. 30If we fail to maintain effective internal controls over financial reporting, we may be unable to accurately or timely report our financial condition or results of operations, which may adversely affect our business