TON Strategy (TONX) risk factors, FY2025 10-K

TON Strategy's FY2025 10-K, filed Mar 31, 2026, lists 46 risk factors in 3 groups. Against the prior year's 30: 24 new, 8 dropped, 4 substantially reworded.

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Risk factors listed
463 groups
New this year
24vs 30 last year
Dropped
8since the prior 10-K
Substantially reworded
4of those kept
Section length
21k wordsItem 1A

What the changes say

  • Company adopted a new TON treasury strategy, heavily exposing its financials, liquidity, and operations to Toncoin volatility.

What changed since the prior 10-K

New

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Our financial results and the market price of the common stock may be affected by the price of Toncoin

    Our financial results and stock price will be heavily affected by the volatile price of Toncoin.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    The Company’s Toncoin holdings will be less liquid than existing cash and cash equivalents and may not be able to serve as a source of liquidity for it to the same extent as cash and cash equivalents

    Our Toncoin holdings have limited liquidity and may be subject to lock-up periods, restricting their use as cash.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    We have recently announced our new TON treasury strategy, and we may be unable to successfully implement it

    We may fail to successfully execute our newly announced TON treasury strategy and staking activities.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Our TON treasury strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks

    Participating as a validator on the TON network exposes us to operational risks and potential slashing penalties for downtime.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Digital assets do not pay interest, dividends or other returns and must be used in staking or decentralized finance activities to generate revenue, which involves additional risks

    Generating revenue from digital assets requires staking or decentralized finance activities, which risk smart contract exploits.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    In connection with our TON treasury strategy, we expect to interact with various smart contracts deployed on TON, which may expose us to risks and technical vulnerabilities

    Interacting with smart contracts on the TON network could lead to technical vulnerabilities and the loss of digital assets.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    A significant decrease in the market value of our Toncoin holdings could adversely affect our ability to satisfy our financial obligations under any future debt financings

    A drop in Toncoin market value could impair our ability to service future debt obligations.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Unrealized fair value gains on our Toncoin holdings could cause us to become subject to the corporate alternative minimum tax

    Unrealized fair value gains on Toncoin holdings could subject us to the 15% corporate alternative minimum tax.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    The regulatory and legislative environment for digital assets is evolving rapidly and remains uncertain; changes in applicable law or regulation could materially and adversely affect our ability to execute our TON Treasury Strategy

    Evolving laws and regulations could adversely affect our ability to execute our TON treasury strategy.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Future regulatory actions, changes in interpretation or administrations, or new legislation could adversely affect our ability to hold, acquire, or utilize Toncoin and other crypto assets, and could materially impact our business, financial condition, and results of operations

    Future regulatory actions or new legislation could restrict our ability to hold, utilize, or recover Toncoin and crypto assets.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    The availability of spot ETPs for digital assets may adversely affect the market price of our common stock

    The availability of spot ETPs for digital assets may negatively impact the market price of our common stock.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Our TON treasury strategy will subject us to enhanced regulatory oversight

    Our TON treasury strategy will subject us to enhanced regulatory oversight regarding anti-money laundering and sanctions.

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Toncoin trading venues may experience greater fraud, security failures, or regulatory or operational problems than trading venues for more established asset classes

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Our concentration of Toncoin holdings may heighten the risks inherent in the Company’s TON treasury strategy and limit our ability to sell Toncoin

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    The Company will face risks relating to the custody of Toncoin it acquires, including the loss or destruction of private keys required to access its Toncoin and cyberattacks or other data loss relating to its Toncoin

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Blockchain technology may expose us to sanctioned or blocked persons or may result in unintentional or inadvertent violations of economic sanctions laws and regulations

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Furthermore, state regulators may conclude that the digital assets we hold are securities under state laws, requiring us to comply with state-specific securities regulations. States like California have stricter definitions of “investment contracts” than the SEC, increasing the risk of additional regulatory scrutiny

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    If we engage in derivatives trading activity, we may be deemed to be a “commodity pool” under the CEA and CFTC Rules as a result of our commodity interest trading which could have a material adverse effect on our business, financial condition and results of operations

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    A disruption of the Internet may affect the operation of the cryptocurrency networks, which may adversely affect the cryptocurrency industry and an investment in the Company

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Toncoin is created and transmitted through TON. If TON is disrupted or encounters any unanticipated difficulties, the value of Toncoin could be negatively impacted

  • NewRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    The Company’s TON treasury strategy exposes it to risk of non-performance by counterparties

  • NewRisks Related to Our Common Stock

    We could lose our listing on the Nasdaq Capital Market if we do not comply with Nasdaq listing requirements, including obtaining shareholder approval for certain transactions. The loss of our Nasdaq listing would in all likelihood make our common stock significantly less liquid and adversely affect its value

  • NewRisks Related to Our Common Stock

    Some of the shares issued and equity awards granted under our Incentive Plan may have been issued in transactions that were not registered nor exempt from registration under the Securities Act of 1933 and/or certain state securities laws

  • NewRisks Related to Our Jurisdiction of Organization

    We ratified certain actions pursuant to Nevada law and filed certificates of correction with the Nevada Secretary of State

Dropped

  • DroppedRisks Related to Our Business

    Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer

  • DroppedRisks Related to Our Business

    We may be subject to risks associated with artificial intelligence and machine learning technology

  • DroppedRisks Related to Our Business

    We may not be able to find suitable software developers at an acceptable cost or at all

  • DroppedRisks Related to an Investment in Our Securities

    If 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

  • DroppedRisks Related to an Investment in Our Securities

    These 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

  • DroppedRisks Related to an Investment in Our Securities

    Our 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

  • DroppedRisks Related to an Investment in Our Securities

    If 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

  • DroppedRisks Related to an Investment in Our Securities

    The 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

Reworded

  • 80% rewrittenRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    Our ability to deliver our services is dependent on third party Internet providers

    Retained identical text regarding dependence on third-party Internet providers.

  • 74% rewrittenRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    We 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

    Added a hedge stating there is no assurance that AI integration will enhance services or be beneficial to our business.

  • 51% rewrittenRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    The success of our business is highly correlated to general economic conditions

    Expanded macroeconomic factors to include health epidemics, geopolitical events, tariffs, supply chain disruptions, and interest rate volatility.

  • 30% rewrittenRisks Related to Our TON Treasury Strategy and Toncoin Holdings

    There is a risk of dependence on one or a group of customers

    Updated the top customer revenue concentration figure from 26.0% for fiscal 2024 to 25.3% for fiscal 2025.

All 46 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our TON Treasury Strategy and Toncoin Holdings

  1. 01Our financial results and the market price of the common stock may be affected by the price of ToncoinNew
  2. 02The Company’s Toncoin holdings will be less liquid than existing cash and cash equivalents and may not be able to serve as a source of liquidity for it to the same extent as cash and cash equivalentsNew
  3. 03We have recently announced our new TON treasury strategy, and we may be unable to successfully implement itNew
  4. 04Our TON treasury strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risksNew
  5. 05Digital assets do not pay interest, dividends or other returns and must be used in staking or decentralized finance activities to generate revenue, which involves additional risksNew
  6. 06In connection with our TON treasury strategy, we expect to interact with various smart contracts deployed on TON, which may expose us to risks and technical vulnerabilitiesNew
  7. 07A significant decrease in the market value of our Toncoin holdings could adversely affect our ability to satisfy our financial obligations under any future debt financingsNew
  8. 08Unrealized fair value gains on our Toncoin holdings could cause us to become subject to the corporate alternative minimum taxNew
  9. 09The regulatory and legislative environment for digital assets is evolving rapidly and remains uncertain; changes in applicable law or regulation could materially and adversely affect our ability to execute our TON Treasury StrategyNew
  10. 10Future regulatory actions, changes in interpretation or administrations, or new legislation could adversely affect our ability to hold, acquire, or utilize Toncoin and other crypto assets, and could materially impact our business, financial condition, and results of operationsNew
  11. 11The availability of spot ETPs for digital assets may adversely affect the market price of our common stockNew
  12. 12Our TON treasury strategy will subject us to enhanced regulatory oversightNew
  13. 13Toncoin trading venues may experience greater fraud, security failures, or regulatory or operational problems than trading venues for more established asset classesNew
  14. 14Our concentration of Toncoin holdings may heighten the risks inherent in the Company’s TON treasury strategy and limit our ability to sell ToncoinNew
  15. 15The Company will face risks relating to the custody of Toncoin it acquires, including the loss or destruction of private keys required to access its Toncoin and cyberattacks or other data loss relating to its ToncoinNew
  16. 16Blockchain technology may expose us to sanctioned or blocked persons or may result in unintentional or inadvertent violations of economic sanctions laws and regulationsNew
  17. 17Furthermore, state regulators may conclude that the digital assets we hold are securities under state laws, requiring us to comply with state-specific securities regulations. States like California have stricter definitions of “investment contracts” than the SEC, increasing the risk of additional regulatory scrutinyNew
  18. 18If we engage in derivatives trading activity, we may be deemed to be a “commodity pool” under the CEA and CFTC Rules as a result of our commodity interest trading which could have a material adverse effect on our business, financial condition and results of operationsNew
  19. 19A disruption of the Internet may affect the operation of the cryptocurrency networks, which may adversely affect the cryptocurrency industry and an investment in the CompanyNew
  20. 20Toncoin is created and transmitted through TON. If TON is disrupted or encounters any unanticipated difficulties, the value of Toncoin could be negatively impactedNew
  21. 21The Company’s TON treasury strategy exposes it to risk of non-performance by counterpartiesNew
  22. 22We have incurred significant net losses and cannot assure you that we will achieve or maintain profitable operations
  23. 23Public 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
  24. 24Our 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
  25. 25Our 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
  26. 26For additional information refer to the section entitled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources ”
  27. 27There is a risk of dependence on one or a group of customers30% rewritten
  28. 28The market in which we operate is intensely competitive and, if we do not compete effectively, our operating results could be harmed
  29. 29We may not be able to increase the number of our strategic relationships or grow the revenues received from our current strategic relationships
  30. 30We may not be able to develop enhancements and new features to our existing service or acceptable new services that keep pace with technological developments
  31. 31Our ability to deliver our services is dependent on third party Internet providers80% rewritten
  32. 32Our 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
  33. 33We 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 affected74% rewritten
  34. 34We 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
  35. 35The success of our business is highly correlated to general economic conditions51% rewritten
  36. 36Our 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
  37. 37Natural disasters and other events beyond our control could materially adversely affect us
  38. 38Our future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel

Risks Related to Our Common Stock

  1. 39We could lose our listing on the Nasdaq Capital Market if we do not comply with Nasdaq listing requirements, including obtaining shareholder approval for certain transactions. The loss of our Nasdaq listing would in all likelihood make our common stock significantly less liquid and adversely affect its valueNew
  2. 40A 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
  3. 41Because 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
  4. 42Some of the shares issued and equity awards granted under our Incentive Plan may have been issued in transactions that were not registered nor exempt from registration under the Securities Act of 1933 and/or certain state securities lawsNew

Risks Related to Our Jurisdiction of Organization

  1. 43We ratified certain actions pursuant to Nevada law and filed certificates of correction with the Nevada Secretary of StateNew
  2. 44Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of us
  3. 45Our 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
  4. 46If 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

Other TON Strategy 10-Ks

  • FY2024 10-K risk factors
    30 risks

    Recurring net losses of $10.3 million in 2024 raise going concern and capital adequacy risks. Heavy customer concentration with a single client generating 26% of revenue poses revenue volatility. Nasdaq listing compliance risks threaten common stock liquidity under ticker VERB.

    Filed Mar 25, 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.