RISK FACTORS
There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. You should carefully consider the risks described below and the other information included in this Annual Report on Form 10-K, including the consolidated financial statements and related notes. If any of the following risks, or any other risks not described below, actually occur, it is likely that our business, financial condition, and/or operating results could be materially adversely affected. The risks and uncertainties described below include forward-looking statements and our actual results may differ from those discussed in these forward-looking statements.
Risk Factor Summary
Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “ Risk Factors ” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC before making investment decisions regarding our common stock.
Our digital asset infrastructure and real-world asset tokenization business is new and unproven, and we may not successfully commercialize tokenized products or achieve market adoption.
The regulatory environment for digital assets and tokenized products is evolving and uncertain; our products and platform may be subject to securities, commodities, broker-dealer/ATS, money transmission, AML/KYC, sanctions, and other regulatory requirements that could restrict our operations, delay launches, or increase costs.
Our tokenized gold strategy exposes us to risks related to gold custody frameworks, reserve verification, liquidity, and (if applicable) redemption functionality, including risks relating to unallocated custody, the absence of linkage of tokens to specific bullion bars, and the absence of live proof-of-reserves or independent audit processes.
Tokenholders do not benefit from FDIC or SIPC protections, and may face delays, partial recovery, or total loss in the event of SPV insolvency or service provider failure.
The SPV does not pay cash distributions; yield is paid as additional Tokens (scrip dividends), which limits liquidity for investors who may not be able to easily convert their investment to cash.
The SPV’s gold may be commingled with gold from other lessors in Monetary Metals’ leasing program, and other lessors may receive more favorable terms or priority in enforcement scenarios.
The value of our gold-linked strategy and our financial results could be adversely affected by volatility in gold prices, including potential impairment of gold holdings or reduced demand for gold-linked token structures.
Our prior issuance of convertible debentures and related embedded derivative accounting created the potential for significant dilution and volatility in reported results, and similar financing in the future could have similar effects.
We are subject to cybersecurity and data privacy risks (including risks related to third-party vendors and cloud platforms), which could result in service disruptions, loss or theft of digital assets or data, regulatory scrutiny, liability, and reputational harm.
Because we have reverted to a development stage company, we expect to incur operating losses.
We may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Any additional funds that we obtain may not be on terms favorable to us or our stockholders and may require us to relinquish valuable rights.
If we do not effectively manage changes in our business, these changes could place a significant strain on our management and operations.
Our strategic business plan may not produce the intended growth in revenue and operating income.
We currently have limited sales, marketing or distribution operations and will need to expand our expertise in these areas.
Our product development program depends upon third-party researchers, including Mayo, who are outside our control and whose negative performance could materially hinder or delay our pre-clinical testing or clinical trials.
We may face risks associated with future litigation and claims.
The Company has concluded that there were material weaknesses in its internal control over financial reporting, which, if not remediated, could materially adversely affect its ability to timely and accurately report its results of operations and financial condition. The accuracy of the Company’s financial reporting depends on the effectiveness of its internal controls over financial reporting.
If we do not obtain protection for our intellectual property rights, our competitors may be able to take advantage of our research and development efforts to develop competing products.
If we infringe upon the rights of third parties, we could be prevented from selling products and forced to pay damages and defend against litigation.
We maintain license agreements with Mayo Clinic related to our legacy medical device business, and failure to comply with such agreements could result in loss of intellectual property rights.
If we fail to comply with our obligations under our license agreements, we could lose the rights to intellectual property that is important to our business.
We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
Obtaining and maintaining patent protection depends on compliance with various procedures and other requirements, and our patent protection could be reduced or eliminated in case of non-compliance with these requirements.
The market price for our common stock may fluctuate significantly, which could result in substantial losses by our investors.
Although our shares of common stock are now listed on the Nasdaq Capital Market, we currently have a limited trading volume, which results in higher price volatility for, and reduced liquidity of, our common stock.
Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which could negatively impact the market price and liquidity of our common stock and our ability to access the capital markets.
Future sales of our common stock in the public market or other financings could cause our stock price to fall.
If we sell additional equity or debt securities to fund our operations, it may impose restrictions on our business.
Risks Related to Our Business and Industry
Because we have reverted to a development stage company, we expect to incur operating losses.
We are a development stage company with respect to our principal business, the Streamex digital asset infrastructure and real-world asset tokenization platform. We have not generated material revenue from the Streamex platform and expect to incur substantial additional operating expenses over the next several years as we develop and launch our tokenized gold product (GLDY), other future tokenized asset offerings, and related infrastructure, invest in technology development and compliance capabilities, and build strategic partnerships in the digital asset and commodity finance markets.
The amount of our future losses and when, if ever, we will achieve profitability are uncertain. Our ability to generate revenue and achieve profitability will depend on, among other things:
successful completion of the Streamex platform’s technical development, including smart contract deployment, custody integration, and compliance infrastructure;
obtaining or maintaining any necessary regulatory approvals, licenses, or exemptions from the SEC, CFTC, FinCEN, state regulators, or other authorities;
establishing partnerships with third-party custodians, bullion providers, and financial institutions;
achieving market acceptance for our tokenized gold product (GLDY) and any future tokenized asset offerings;
developing liquid secondary markets for our tokens; and
raising sufficient funds to finance our development and commercialization activities.
We might not succeed at any of these undertakings. If we are unsuccessful at some or all of these undertakings, our business, prospects, and results of operations may be materially adversely affected.
The Company also retains a legacy medical device business focused on the PURE EP™ Platform, which is not a strategic priority and is being evaluated for strategic alternatives. Revenues from this legacy business have not been material, and no assurance can be given that the Company will realize any value from the disposition or continued operation of this business.
Our digital asset and tokenization business is new and unproven, subjecting us to numerous risks and uncertainties.
The Company’s ongoing primary focus will be scaling the Streamex Platform for the tokenization of real-world assets. The development and commercialization of digital tokens backed by physical assets involves significant technical, regulatory, and market uncertainties. The regulatory environment for digital assets and token offerings is rapidly evolving; changes in laws or regulations (or the interpretation of existing laws, including securities, commodities, and money transmission regulations) could impose costly compliance obligations, restrict our business model, or make our any token offering infeasible. Additionally, market acceptance of asset-backed digital tokens (such as GLDY) remains subject to ongoing validation. If we are unable to maintain regulatory compliance, attract users, and establish a liquid market for our tokens, our digital asset initiative may not generate the anticipated benefits, and our business, financial condition, and results of operations could be adversely affected.
Our tokenized gold products and platform may be subject to extensive and evolving regulation, and we may be required to obtain licenses or registrations (including broker-dealer or alternative trading system regulation) that could delay or prevent commercialization.
Digital tokens representing contractual interests in gold or other RWAs may be treated as “securities” and/or “commodities” depending on their structure, the rights conveyed, and how they are offered and traded. As a result, we may be required to rely on offering exemptions, implement transfer restrictions and resale limitations, and ensure that any secondary trading occurs through appropriately regulated venues. In addition, as we expand investor onboarding and platform functionality across jurisdictions, we may face overlapping and potentially conflicting requirements applicable to broker-dealers, alternative trading systems (“ATS”), custodial service providers, and other regulated financial activities. Regulatory scrutiny, new legislation, changing interpretations, or enforcement actions could require changes to our products or platform, limit our ability to operate in certain markets, increase compliance costs, or cause us to suspend or discontinue planned offerings.
Our tokenization strategy depends on third-party custody, reserve verification, and related operational controls that may not be fully implemented or may not operate as expected.
The success of our current and planned tokenized products rely on establishing third-party custody arrangements for underlying assets and the implementation of controls to manage credit risk, reserve verification, auditability, and related controls. With respect to GLDY, gold may be held on an unallocated basis, and there may be no current mechanism to link GLDY balances to physical gold held as individual bullion bars. As a result of these operational hurdles, physical redemption for underlying assets may only be available under certain conditions, We have not yet fully implemented a live proof-of-reserves dashboard or public confirmation of 1:1 gold backing for tokens, and we are in the process of implementing an independent audit process for bullion holdings on a defined timeline. If custody infrastructure, verification processes, or operational safeguards are delayed, incomplete, or fail (including smart-contract or operational safeguards designed to prevent issuance of tokens in excess of gold held), investor confidence, market adoption, and regulatory posture could be adversely affected.
If our tokens are not listed on an exchange and we do not engage market makers or establish liquid trading venues, tokenholders may face significant liquidity and pricing risk.
Our ability to attract investors and support token utility may depend on the availability of liquid secondary markets. Tokens are not currently listed on any exchange, and no market makers are engaged to provide liquidity or price stability. In addition, the transferability, lock-up restrictions, and resale mechanics applicable to tokenized products may be limited or may evolve over time. Limited liquidity could result in wide bid-ask spreads, price volatility, and difficulty exiting positions, which may reduce investor demand and materially adversely affect our business.
We may face operational and governance risks because we may retain centralized control over token smart contracts.
We may retain centralized control over token smart contracts, including upgrade authority. If governance controls, access controls, or change-management processes fail, or if smart contract upgrades are executed improperly, such events could cause operational disruption, unintended token behavior, losses to users, or regulatory scrutiny. These risks could adversely affect trust in our platform and the perceived integrity of our token offerings.
Tokenholders may not have perfected rights to underlying gold and may be treated as unsecured creditors in an insolvency scenario.
Depending on product structure, tokenholders may not have direct legal title to specific bullion bars or a perfected security interest in underlying assets. In an insolvency, recovery of value may depend on third-party custodian arrangements and could subject tokenholders to delays or losses, including the possibility that tokenholders rank as unsecured creditors. Any such outcomes could adversely affect token adoption and our ability to commercialize tokenized products.
Our financial results and the market price may be adversely affected by fluctuations in the price of gold, other precious metals, and the volatility inherent in digital asset markets.
We have deployed and continue to develop the Streamex Platform, a blockchain-based platform for the tokenization of real-world assets (“RWA”). The Streamex Platform has an initial focus on the issuance and administration of GLDY, a gold-backed tokenized security that seeks to provide holders exposure to the spot price of gold. The value proposition of GLDY—and the underlying demand for GLDY from prospective investors—is inherently linked to prevailing and expected future prices of gold.
While we seek to operate as a technology platform and facilitator—earning revenue through token issuance, platform usage, and transaction fees—our exposure to the issuance of GLDY introduces indirect but material risk. If the price of gold declines materially or becomes more volatile, demand for GLDY or gold-backed RWA more generally may decrease, impairing our ability to successfully issue new GLDY, develop future tokenized products, or generate secondary market activity. In addition, lower gold prices may increase counterparty risk among our gold leasing counterparties, potentially leading to defaults or contractual disputes that could harm our reputation and operations. Moreover, Streamex’s tokens are structured as digital assets and are subject to broader volatility and uncertainty inherent in the digital asset and blockchain ecosystem. This includes risks related to token pricing, investor adoption, smart contract execution, liquidity, regulatory scrutiny, cyber threats, and custodial . The performance of our gold tokenization strategy may be further affected by sentiment across the broader digital asset market, regardless of the performance of gold itself.
As Streamex scales its balance sheet and operational footprint in support of its gold strategy, our consolidated financial results may increasingly reflect the performance of this line of business. Accordingly, any sustained disruption in the gold market or deterioration in investor confidence in digital asset–linked products could materially and adversely affect our financial condition, operating results, and the market price.
Our gold-linked tokenization and treasury strategy may expose us to complex liquidity risks across both traditional and digital asset markets, which could adversely affect our financial results.
The issuance and administration of GLDY requires the Company to deploy a capital strategy that ultimately involves the acquisition of physical gold by the GLDY SPV, which is held in custody with professional custodians and deployed into a leasing program administered by Monetary Metals under the MM Agreement. This model seeks to maintain a long gold position and generate yield for holders of GLDY through gold leasing activities. However, this approach introduces liquidity management challenges that may ultimately impact the financial performance of the Company, as the ability of the Streamex Platform to generate fee revenues for the Company is dependent upon the successful issuance and administration of GLDY and other tokenized RWA products that may be offered on the Streamex Platform in the future.
The gold market, while historically liquid, can be subject to temporary dislocations caused by geopolitical events, macroeconomic shocks, or supply chain disruptions. Similarly, emerging token markets—particularly those involving newly issued or bespoke digital assets—often exhibit reduced trading volumes, fragmented order books, and dependence on limited market makers or exchange infrastructure. These structural limitations may prevent timely exits or settlements, or may result in price slippage, widening spreads, or delayed conversions between tokenized assets and fiat currency.
Additionally, gold deployed into leases may not be immediately available for redemption or liquidation. If investor demand softens, market infrastructure fails to scale, or lessees default on their lease obligations, we may face constraints on accessing or redeploying gold-linked assets, reducing liquidity, delaying revenue recognition, and potentially impairing balance sheet efficiency.
These liquidity risks, across both traditional bullion markets and tokenized asset venues, may limit our ability to execute our gold strategy effectively. If we are unable to timely deploy or rotate capital, or if our token products fail to achieve meaningful market traction, our financial results, cash flows, and overall operating performance could be materially and adversely affected.
We operate in the highly competitive gold market, and established market participants with greater resources, regulatory positioning, or brand recognition may outperform us.
Streamex operates within the global gold market, a highly competitive industry dominated by well-established financial institutions, bullion banks, ETF sponsors, precious metals dealers, and newer entrants offering gold-backed digital assets. Many of these participants possess significantly greater financial resources, broader market access, deeper liquidity, established regulatory frameworks, and longstanding relationships with institutional investors and gold leasing counterparties.
We also face emerging competition from blockchain-native platforms offering gold-linked tokens or decentralized finance (DeFi) products that may offer alternative value propositions or pricing advantages. Some of our competitors may already have established physical custody infrastructure, tokenized offerings, or secondary markets in place. In addition, we face competition from traditional gold investment products such as exchange-traded funds (ETFs), futures contracts, and bullion dealers, which are already widely accepted by retail and institutional investors.
If we are unable to successfully differentiate our platform, build user trust, secure high-quality counterparties, or scale liquidity in our tokenized offerings, we may not be able to compete effectively. Any failure to compete successfully could adversely affect our ability to grow our market share, attract capital to our platform, or generate sustainable revenue, which would have a material and adverse effect on our business, financial condition, and results of operations.
Evolving regulatory requirements for gold trading and cross-border transactions may increase our compliance costs and could restrict or delay our operations.
The Company’s tokenization business model, including the infrastructure supporting the issuance and administration of GLDY, spans multiple regulated domains, including securities issuance, commodity-related activities, and digital asset markets, each of which is subject to evolving and potentially conflicting regulatory frameworks across jurisdictions.
In particular, the issuance and leasing activities underlying GLDY involve cross-border elements, which subject the Company to a range of regulatory regimes. These include anti-money laundering (“AML”) and know-your-customer (“KYC”) requirements, securities registration and exemptions, custody and safekeeping standards, and gold traceability obligations, all of which may become more stringent as regulators focus on precious metals and digital asset markets.
Simultaneously, tokenized representations of gold delivery rights are likely to be classified as securities in many jurisdictions, including Canada and the United States, subjecting our platform to securities registration requirements, prospectus exemptions, and potential enforcement action if deemed non-compliant. As we onboard investors, counterparties, and exchanges in different countries, we must assess and adhere to multiple legal frameworks, including those applicable to broker-dealers, alternative trading systems (“ATS”) operators, stablecoin providers, and custodial service providers.
The regulatory environment for tokenized commodities and cross-border digital assets remains fluid. New legislation or guidance from regulators such as the SEC, FINTRAC, FCA, MAS, or IOSCO could impose additional disclosure, reporting, registration, or licensing requirements on our business, including on our smart contracts, custody relationships, or token design. Meeting these evolving obligations may result in significant compliance costs, delays in product rollout, or restructuring of token features.
Failure to anticipate or comply with applicable laws and regulations could limit our ability to offer products in certain jurisdictions, subject us to enforcement actions or fines, or require us to unwind existing transactions. Any such regulatory developments could materially and adversely affect our business, platform scalability, and financial performance.
Our ability to execute our business plan depends on the successful development, deployment, and commercialization of blockchain-based enterprise solutions for tokenized commodities, on-chain commodity markets, and treasury management, which may not materialize as expected.
Streamex’s business model relies on the development and successful commercialization of blockchain-enabled infrastructure that supports the tokenization of real-world assets—beginning with gold—and the creation of on-chain commodity trading systems and treasury management strategies. Our ability to generate revenue and scale operations depends on the timely and functional integration of multiple technical, legal, and market-facing components, including:
Smart contracts capable of enforcing gold delivery claims;
Regulatory-compliant token issuance and transfer mechanics;
Scalable custody and proof-of-reserves solutions;
A compliant trading platform with liquidity support;
Institutional-grade treasury infrastructure for token settlement and redeployment.
Although the Streamex Platform is currently administering the issuance and trading of GLDY, the systems supporting tokenized commodity flows and digital secondary market infrastructure continue to evolve, and there can be no assurance that our technology will continue to function as intended, meet security or audit standards, or achieve broader market acceptance. Bugs, third-party integration failures, or regulatory developments may materially impair our ability to scale operations or meet investor expectations.
Moreover, widespread commercial acceptance of tokenized commodity assets particularly those not offering direct legal title to physical bullion is uncertain and may depend on user familiarity, platform trust, macroeconomic conditions, and evolving regulatory support. Even if we successfully deploy our core infrastructure, user adoption may lag or institutional counterparties may hesitate to participate in a new digital settlement framework.
If we are unable to successfully design, launch, or scale our blockchain enterprise solutions or if these solutions fail to gain sufficient traction among gold leasing participants, custodians, market makers, or institutional investors our ability to execute our strategic plan and generate sustainable revenue may be material and adversely affected.
Changes in laws and regulations, including increased regulation of blockchain technologies and digital assets, may adversely affect our business, product development, and compliance obligations.
The legal and regulatory environment applicable to blockchain-based platforms, digital asset issuance, and tokenized financial products is rapidly evolving. Streamex’s business involves the creation and distribution of tokenized claims on physical commodities through blockchain infrastructure. This structure intersects with regulatory regimes governing securities, commodities, financial services, payments, data privacy, and cross-border transactions. Any material change in applicable laws, regulatory guidance, or enforcement priorities could adversely affect our operations, increase compliance burdens, or require us to modify, delay, or cancel certain product offerings.
In particular, governments and regulatory agencies globally—including the SEC, the Commodity Futures Trading Commission (CFTC), the Canadian Securities Administrators, and other international bodies—have signaled increased scrutiny over blockchain-based activities. Areas of focus include the classification of digital tokens as securities, the registration of platforms as broker-dealers or ATS, custody and safekeeping standards, and AML compliance. Heightened regulation could also affect how smart contracts are governed, how token transfers are tracked, and how compliance responsibilities are allocated among issuers, custodians, and technology providers.
Changes in applicable law could impose new licensing or registration requirements, require changes to our token architecture, restrict our ability to engage in cross-border token sales, or subject our personnel or counterparties to additional oversight. In addition, regulatory developments may outpace technological adaptation, resulting in uncertainty or fragmentation that inhibits innovation or market adoption.
Complying with new or modified regulatory regimes could require significant legal, operational, and technical resources. Failure to comply—or perceived non-compliance—with applicable regulatory requirements may result in fines, enforcement actions, product delays, reputational harm, or even the inability to operate in certain jurisdictions. Any such developments could materially and adversely affect our business, prospects, and financial condition.
Our platform may fail to achieve market adoption or effectively address key inefficiencies in the traditional gold and commodities markets.
Streamex’s business model is predicated on the belief that blockchain-based tokenization can address long-standing inefficiencies in the gold and broader commodities markets—such as limited access to yield-bearing gold products, lack of real-time settlement infrastructure, illiquidity of gold leasing arrangements, and restricted investor access.
However, there is no assurance that our platform will gain traction among institutional investors, gold leasing participants, traders, or other key market participants.
Many participants in the traditional gold market operate within established commercial relationships, regulatory frameworks, and settlement processes that may be resistant to change or skeptical of blockchain-based alternatives. Institutional investors may be slow to embrace tokenized interests in a gold leasing vehicle, particularly those that do not confer direct legal title to physical bullion. Similarly, traditional gold market participants may prefer established financing models, and existing exchanges may be unwilling to support tokens issued through non-traditional mechanisms.
Even if the technology performs as intended, our platform may fail to differentiate itself meaningfully from other gold-backed token offerings or digital asset infrastructure providers, several of whom already have established user bases, liquidity, and regulatory licenses. Without sustained user engagement and ecosystem development, Streamex may struggle to reach commercial scale or justify its infrastructure investment.
If we are unable to demonstrate compelling advantages over traditional commodity market solutions—or if potential users are unwilling to change entrenched behaviors—our platform may not achieve meaningful adoption, which would materially and adversely affect our business prospects, financial performance, and growth trajectory.
Our gold-focused tokenization strategy will subject us to enhanced regulatory oversight across securities, commodities, and precious metals regimes, which may increase our compliance burdens and limit operational flexibility.
The infrastructure underlying the issuance and administration of GLDY combines elements of traditional commodity holding with gold leasing and blockchain-based digital asset issuance—triggering overlapping regulatory frameworks that are subject to heightened scrutiny from global regulators.
In particular, gold markets are subject to extensive regulation related to sourcing, trading, custody, and leasing. Regulatory bodies such as the London Bullion Market Association (“LBMA”), the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the U.S. Department of the Treasury, and various central banks impose rules around gold purity standards, provenance, AML, and sanctions compliance. Our partnerships with bullion custodians, reliance on gold leasing arrangements through Monetary Metals, and participation in global trade flows may trigger reporting, licensing, and inspection obligations under these frameworks.
In parallel, the tokenization of gold-linked instruments is expected to be treated as the issuance of securities in most jurisdictions, subjecting Streamex to securities laws, including prospectus exemptions, resale restrictions, investor suitability rules, and ongoing disclosure obligations. In the U.S., Canada, and elsewhere, regulators have signaled increased oversight of digital asset instruments, especially those that function as investment contracts or derivative-like structures.
Given the nature of our gold strategy—which spans physical commodities, token issuance, and decentralized infrastructure—we anticipate enhanced regulatory oversight from multiple authorities across jurisdictions. This may include periodic audits, product-level reviews, cross-border compliance restrictions, and the potential need for broker-dealer, ATS, or commodity pool operator registrations. In some cases, new or revised rules could require us to alter token design, restrict certain investor types, or suspend offerings in affected jurisdictions.
Complying with these layered regulatory obligations will require significant legal, technical, and financial resources. Failure to meet applicable standards—or regulatory determinations that contradict our structural assumptions—could result in enforcement actions, civil or criminal penalties, loss of licensure, reputational harm, or business disruption. As a result, our gold strategy may expose us to enhanced compliance risks and may materially and adversely affect our ability to operate, scale, or compete effectively.
Discrepancies between token volume entitlements and actual gold holdings may lead to valuation uncertainty, settlement delays, and reputational harm.
The SPV’s gold leasing activities are conducted through a “back-to-back” structure pursuant to agreements with Monetary Metals, whereby the SPV leases gold to a designated series of a Delaware series limited liability company managed by Monetary Metals, which then may commingle the SPV’s gold with gold from other participants and lease it to the ultimate lessee. Accordingly, the Company relies heavily on the performance of its service providers and lease counterparties in ensuring efficient administration of GLDY.
In the context of other tokenized digital assets, settlement risk is exacerbated when settlement finality on-chain does not align with actual asset delivery off-chain. According to the Bank for International Settlements, token arrangements can introduce mismatches between token issuance, asset availability, and transfer finality—raising risk around incomplete settlement.
If Streamex cannot deliver the full gold volumes represented by its tokens—or if deliveries are delayed—tokenholders may experience difficulty redeeming tokens, confront valuation discrepancies, and lose confidence in the platform. Such issues could erode secondary market liquidity, prompt margin or reserve adjustments, and trigger reputational or regulatory scrutiny. Ultimately, these challenges could materially impair our business model, financial condition, and long-term growth potential.
The concentration of our holdings and strategy in gold may amplify the risks inherent in our business model and expose us to adverse market and operational developments.
Streamex’s intended tokenization and treasury strategy may be heavily concentrated in gold. A substantial portion of our revenue model and balance sheet exposure is tied to the successful administration of GLDY and the gold leasing arrangements underlying the GLDY product. While gold is traditionally viewed as a stable store of value, such concentration will enhance our exposure to a single asset class and a narrow set of market and operational risks.
Gold markets are subject to a range of external forces including macroeconomic policy shifts, inflation expectations, interest rate volatility, geopolitical instability, and currency fluctuations. Any adverse developments in these areas—such as sustained declines in gold prices, weakening institutional demand, or tightening of physical delivery infrastructure—could materially impact the perceived value of our tokenized products and reduce investor demand.
Additionally, our reliance on a limited number of gold leasing counterparties and custodial partners to secure, hold, and safeguard the underlying gold creates additional counterparty and operational concentration risks. Any lessee defaults, disputes over lease terms, custodial limitations, or insurance shortfalls could have disproportionate effects on our token programs and financial stability.
Unlike diversified financial institutions or asset managers, Streamex has not yet expanded into other commodities or asset classes, which limits our ability to hedge or offset commodity-specific shocks. Until we achieve broader asset diversification or launch a multi-asset tokenization strategy, our strategic focus on gold will continue to heighten our vulnerability to gold-specific pricing, supply, and market confidence risks.
Such concentration may impair our liquidity, restrict capital rotation, increase volatility in our platform, and reduce investor confidence, all of which could materially and adversely affect our business, financial results, and long-term prospects.
Our gold holdings will be significantly less liquid than cash and cash equivalents and may not serve as a reliable source of liquidity in times of need.
As part of our asset-backed token issuance model, Streamex anticipates holding a portion of its assets in physical gold—whether directly or through special purpose vehicles, with gold held in custody with professional custodians and potentially deployed into gold leases through Monetary Metals. While gold is widely regarded as a store of value, it lacks the immediate liquidity and transactional flexibility of cash or cash equivalents, particularly in a corporate treasury context.
Unlike cash, which can be deployed immediately to satisfy operational expenses, service debt, or meet regulatory obligations, gold holdings may require conversion through third-party custodians, sales in potentially illiquid or volatile markets, or settlement of contractual obligations over extended periods. Additionally, when gold is deployed into leases or held as token reserves, we may face legal or practical constraints on its conversion or redeployment, particularly during times of market stress or when platform users seek redemption or exit en masse.
If the Company encounters liquidity needs that exceed the available cash on hand, the reliance on gold or tokenized gold reserves may limit our ability to respond rapidly. This could impair our capacity to meet obligations, delay strategic execution, or require unfavorable asset liquidations. These risks may be further exacerbated in periods of gold market disruption, reduced token liquidity, or custodial access constraints.
As a result, the presence of gold holdings on our balance sheet should not be viewed as equivalent to cash or near-cash instruments. Our reliance on less liquid assets may materially and adversely affect our financial flexibility and resilience in periods of operational or market stress.
These risks could materially and adversely affect the value, utility, and credibility of our token offerings, and may impair our ability to scale operations or attract institutional participation.
Geopolitical instability, including conflict in the Middle East, could adversely affect gold markets, custody arrangements, cross-border settlement, and demand for our tokenized commodity products.
Our business is exposed to macroeconomic and geopolitical conditions that affect the global precious metals markets, the digital asset ecosystem, and cross-border financial activity. Escalation of armed conflicts, political instability, terrorism, trade restrictions, sanctions programs, shipping disruptions, or broader unrest in the Middle East or other regions could result in increased volatility in gold prices, higher insurance and transportation costs, disruption to bullion supply chains, delays in settlement, reduced market liquidity, or heightened counterparty risk. Public company filings in adjacent sectors, including precious metals and commodity-related issuers, commonly recognize that instability in the Middle East can materially affect commodity prices, trading conditions, logistics, and financial performance. With respect to GLDY specifically, a number of leases that MM has arranged for the SPV are concentrated in the Middle East; therefore, to the extent broader unrest in the Middle East continues, such disruptions may the performance of underlying leases and the ability of GLDY to generate yield, which could have a material and effect on our business and growth potential.
Because our Streamex platform supports gold-linked digital products that depend on bullion custody, compliance processes, investor confidence, and the orderly functioning of financial and commodity markets, geopolitical instability may have a disproportionate effect on our business model. Even if we do not maintain direct operations in a conflict zone, geopolitical developments may adversely affect the availability or cost of custody, vaulting, insurance, reserve verification, banking access, fiat settlement, blockchain infrastructure usage, onboarding of institutional participants, or the willingness of investors and counterparties to transact in tokenized commodity products. These developments could also result in abrupt changes in regulatory expectations or market sentiment toward gold-linked or cross-border digital financial products.
In addition, periods of heightened geopolitical stress may produce unusual movements in gold prices or disconnects between spot, forward, and financing markets. Such conditions could impair the economics of our offerings, increase hedging or operational costs, reduce investor demand, cause disruptions in expected redemption or settlement mechanics, and adversely affect the perceived reliability of our platform. Any of these events could materially and adversely affect our business, financial condition, results of operations, and growth prospects.
Our business may be adversely affected by sanctions, export controls, anti-money laundering laws, and heightened regulatory scrutiny relating to Iran and other sanctioned jurisdictions, particularly because our products are linked to physical gold and cross-border financial activity.
Our business involves the development of tokenized gold and other commodity-linked products that depend on bullion sourcing, custody, financing, investor onboarding, and cross-border transfers of value. As a result, we are subject to extensive sanctions, anti-money laundering, know-your-customer, anti-bribery, and related compliance obligations in multiple jurisdictions. Iran-related sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) remain extensive and actively enforced, and OFAC continues to publish Iran-specific guidance and advisories for market participants. OFAC also warns that sanctions evasion can involve the use of physical assets, including gold and other precious metals.
Although we intend to maintain compliance controls designed to prevent dealings involving sanctioned persons, prohibited jurisdictions, or impermissible source-of-gold exposure, there can be no assurance that our controls, or those of our custodians, counterparties, liquidity providers, refiners, brokers, banking partners, or other service providers, will be effective in all circumstances. Gold supply chains and cross-border financial flows can be complex, and counterparties may use intermediaries, transshipment points, omnibus arrangements, digital wallets, structured transactions, or incomplete documentation that make beneficial ownership, source of funds, source of bullion, or sanctions nexus difficult to identify. If bullion, funds, investors, or counterparties associated with our platform are found to have a direct or indirect connection to Iran or other sanctioned persons or jurisdictions, or are alleged to have been involved in sanctions evasion, money laundering, or other illicit activity, we could face investigations, , asset freezes, of banking or custody relationships, contractual , reputational , or restrictions on our ability to operate.
In addition, compliance expectations applicable to LBMA-standard gold, responsible sourcing programs, and institutional onboarding may become more stringent over time, including with respect to conflict-affected sourcing, audit trails, traceability, and due diligence. Failure by us or our third-party providers to satisfy these expectations could impair our ability to support proof-of-reserves or reserve verification processes, attract institutional customers, maintain custody or liquidity relationships, or expand into additional jurisdictions. Any such development could materially and adversely affect the perceived legitimacy, marketability, and commercial viability of our tokenized gold offerings and our broader business and financial prospects.
The freely transferable nature of tokenized RWA may increase market volatility and limit recourse for tokenholders in the event of disputes or enforcement actions.
The Streamex Platform is intended to be designed so that tokenized RWA can be freely transferable across jurisdictions and market participants, subject to applicable securities law restrictions. While this transferability is intended to promote liquidity and market participation, it also introduces potential risks that may negatively impact tokenholders and the platform.
In particular, the ability to transfer tokens freely may contribute to increased price volatility, especially during periods of market stress, limited secondary market liquidity, or when macroeconomic conditions affect gold pricing or digital asset sentiment. Without the stabilizing effects of centralized pricing, redemption windows, or regulated exchange mechanisms, token values may diverge significantly from the underlying value of the referenced gold, creating dislocation and confusion in the market.
Additionally, the decentralized and pseudonymous nature of blockchain transactions may make it difficult to trace token ownership, enforce contractual rights, or resolve disputes. If a tokenholder experiences a smart contract malfunction, or counterparty breach, the ability to seek legal redress may be limited, particularly where tokens have changed hands multiple times or are held by unidentifiable or offshore counterparties.
Furthermore, the unrestricted nature of transfers may limit Streamex’s ability to monitor or enforce compliance with investor eligibility criteria, sanctions obligations, or secondary trading restrictions, potentially exposing the platform to regulatory risk.
As a result, while transferability is a key feature of our token model, it may also amplify volatility, obscure liability, and limit recourse for holders. These dynamics could undermine investor confidence and materially affect the performance and perception of our tokenized offerings.
Holders of GLDY bear the economic risk of gold price fluctuations and potential non-performance by gold leasing counterparties.
GLDY is designed to provide tokenholders with economic exposure to gold and a gold-denominated yield through the SPV’s gold leasing activities. As such, tokenholders are likely to be fully exposed to fluctuations in the price of gold, which can be volatile and influenced by a wide range of macroeconomic factors including changes in interest rates, central bank policies, inflation expectations, geopolitical events, currency fluctuations, and broader commodity cycles. A decline in gold prices may significantly reduce the market value of the tokens, regardless of the issuer’s performance or platform functionality.
In addition, tokenholders are subject to the credit and operational risk of gold lessees under the SPV’s gold leasing program. If a lessee fails to return leased gold or make required payments-whether due to financial distress, operational failure, fraud, or other events-tokenholders may experience reduced recoveries upon redemption. The SPV relies on Monetary Metals’ diligence, technology, insurance, and risk management practices in sourcing, structuring, and administering gold leases. While leases may include independent insurance coverage, collateral, guarantees, or inspections, these measures vary by lease and may be insufficient to prevent losses.
Furthermore, the value of the tokens may also be affected by perceived risks of non-performance, creating additional market volatility even absent an actual default. This may impair token liquidity, reduce investor confidence, and undermine secondary market activity.
Investors in Streamex’s tokens must be prepared to assume all economic consequences associated with the performance of the underlying gold asset and counterparty obligations. These structural risks could materially and adversely affect tokenholder returns, Streamex’s platform adoption, and our long-term financial performance.
Our ability to build and scale a community of clients and investor end-users for blockchain-enabled financial services and products is uncertain and depends on successful market adoption, product development, and execution of our business strategy.
Streamex’s growth depends on the successful creation and sustained expansion of an engaged ecosystem of users, including institutional investors, gold leasing participants, custodians, liquidity providers, and individual tokenholders. We aim to position our platform as a digital infrastructure layer for the issuance, trading, and settlement of tokenized real-world assets, beginning with gold. However, there is no assurance that we will succeed in attracting and retaining a critical mass of users necessary to support token liquidity, market activity, and platform revenues.
Market adoption of blockchain-based financial services—particularly in the context of real-world commodity assets—remains nascent and subject to skepticism from both traditional finance and regulatory stakeholders. Many investors and institutions are unfamiliar with or cautious toward tokenized instruments, decentralized smart contracts, or cross-border digital asset frameworks. In addition, competing platforms or legacy products may already command greater trust, scale, or regulatory clarity.
Our success also depends on timely and effective product development. Delays in launching smart contracts, integrating with exchanges, securing custodial relationships, or offering user-friendly interfaces may hinder onboarding or reduce retention. Similarly, failure to provide sufficient liquidity, transparency, or user protections could impair adoption and reduce network effects.
If we are unable to effectively execute our business strategy or develop products that meet the expectations of target users, we may not achieve sufficient traction to support our platform. This could materially limit our revenue potential and long-term viability.
Risks Related to Bullion Custody and Token Structure
Streamex’s bullion custody infrastructure, although established, depends on third-party custodians and service providers, and any failure, interruption, or change in those arrangements could adversely affect its business.
Streamex’s business model is predicated in part on the secure custody, verification and administration of physical gold underlying its tokenized asset offerings. As of the date of this Annual Report on Form 10-K Streamex has established its bullion custody infrastructure and has engaged an LBMA-accredited custodian in support of this framework. However, Streamex’s ability to operate its platform and support tokenized gold products will continue to depend on the performance, reliability and ongoing availability of such custodian and any related vaulting, insurance, logistics, verification and other service providers.
Even where custodial arrangements have been established, there can be no assurance that such relationships will continue on favorable terms, remain operational without disruption, or satisfy all future business, legal, regulatory, technological or commercial requirements. Streamex may need to modify, supplement or replace aspects of its custody framework from time to time as a result of changes in market conditions, counterparty requirements, applicable law, regulatory expectations, insurance requirements, or the operational needs of the platform. Any such change may result in delays, increased costs, additional diligence and compliance work, redesign of platform processes or smart contract logic, or other operational burdens.
In addition, the use of third-party custodians and related service providers exposes Streamex to risks that are outside of its direct control, including risks of operational error, insolvency, fraud, cybersecurity incidents, insufficient insurance coverage, asset loss, recordkeeping failures, disputes over title, access interruptions, delays in settlement or transfer, or other service failures. If Streamex’s custody arrangements are disrupted or prove inadequate, Streamex may be unable to issue gold-backed tokens, process redemptions, support reserve verification, or otherwise satisfy obligations to tokenholders and counterparties. Any such event could materially and affect platform adoption, investor confidence, Streamex’s reputation, and its business, financial condition and results of operations.
Although Streamex has engaged an LBMA-accredited custodian, it remains subject to risks associated with reliance on that custodian and with maintaining LBMA-standard bullion custody arrangements.
Streamex’s tokenization model contemplates physical gold being held through a custody framework designed to support bullion integrity, auditability and investor confidence. Streamex has engaged an LBMA-accredited custodian, which it believes strengthens the credibility of its custody arrangements. However, engagement of such a custodian does not eliminate risk.
There can be no assurance that Streamex will be able to maintain its relationship with its LBMA-accredited custodian on acceptable terms, expand that relationship as its business grows, or replace that custodian with another comparable institution in a timely manner if necessary. In addition, LBMA accreditation does not guarantee uninterrupted service, complete protection against operational failures, asset loss, title defects, fraud, insurance gaps, or regulatory concerns. Streamex may also remain dependent on additional counterparties, including sub-custodians, vault operators, insurers, auditors, logistics providers and other infrastructure participants, any of which could create points of failure or delay.
Moreover, if Streamex’s custody arrangements were to cease meeting institutional expectations, or if its LBMA-accredited custodian were to experience service disruptions, reputational issues, regulatory scrutiny, financial distress, or changes in business practices, Streamex’s ability to support third-party audits, proof-of-reserves attestations, institutional onboarding, or access to liquidity venues could be adversely affected. Any such developments could materially and adversely affect the perceived integrity of Streamex’s tokenized gold offerings, investor confidence, platform adoption, and Streamex’s broader business and financial prospects.
Gold may be held on an unallocated basis, and there is no current mechanism to link tokens to individual bullion bars, which may introduce custody, transparency, and redemption risks.
Some or all of the physical gold underlying GLDY tokens may be held on an unallocated basis by third-party custodians, which means the gold is pooled and not specifically assigned to individual tokenholders or even to Streamex in segregated accounts. Unallocated holdings increase reliance on the creditworthiness and operational soundness of the custodian and may expose tokenholders to higher counterparty risk.
Furthermore, Streamex does not currently offer or contemplate a mechanism to link each token to a specific gold bar with a verifiable serial number, refiner, and assay certificate. While Streamex expects to rely on LBMA “Good Delivery” standards to ensure overall bullion integrity, the absence of a traceability layer means tokenholders cannot verify or redeem against individually earmarked bars. This lack of granularity may reduce transparency and auditability, create potential ambiguity in settlement or redemption scenarios, and undermine confidence in the one-to-one relationship between tokens and underlying gold.
In jurisdictions where asset traceability and segregated title are regulatory priorities, these structural limitations may raise compliance concerns or reduce the appeal of Streamex’s offering to institutional participants. Any doubts regarding the adequacy of custody practices or the fidelity of gold backing could adversely impact token valuation, platform credibility, and Streamex’s overall business strategy.
In the event of loss, theft, or damage to the gold, recovery of value may depend entirely on the custodian’s insurance and operational reliability.
Streamex’s business model involves issuing digital tokens backed by physical gold held in custody with third-party vault providers or deployed in gold leases. In the event of a loss, theft, or physical damage to the bullion, Streamex does not directly insure the gold; rather, it expects that insurance coverage will be arranged by the lessee, MM, or the custodian. As a result, any recovery of value would likely depend entirely on the custodian’s insurance policies, their claims process, and the custodian’s ability and willingness to comply with their contractual obligations.
There is no guarantee that insurance coverage by the custodian will be sufficient to cover all losses, that claims will be paid promptly or in full, or that the terms of coverage will address all types of risks. Moreover, Streamex may have limited ability to enforce or benefit from insurance coverage if Streamex is not named as an insured party or beneficiary.
In addition, Streamex is exposed to operational and financial risks related to the custodian itself, including insolvency, internal mismanagement, or cybersecurity incidents. If the custodian fails to safeguard the bullion or fulfill its obligations, tokenholders may face substantial delays in recovery or incur total loss of value.
Such events could severely impact Streamex’s credibility, impair the value of its tokens, and lead to reputational, regulatory, and financial harm.
Streamex retains centralized control over the token smart contracts, including upgrade authority, which may result in operational or governance risks.
Streamex’s gold-backed tokens operate on public blockchain infrastructure, with smart contracts developed and deployed by Streamex. While decentralization is often viewed as a key attribute of blockchain-based assets, Streamex currently intends to retain centralized control over its token smart contracts, including the authority to modify, upgrade, pause, or terminate contract functions.
Although such control is intended to ensure security, regulatory compliance, and flexibility to respond to technical issues or market changes, it also introduces operational and governance risks. Errors or misjudgments in implementing upgrades or exercising control rights could result in unintended consequences, token malfunction, or loss of tokenholder value. Centralized control also increases the risk of insider threats or external compromise, particularly if administrative keys or access credentials are not properly secured.
Moreover, market participants may perceive centralized control as inconsistent with DeFi principles, potentially limiting adoption among investors who prioritize trustless infrastructure. Regulatory authorities may also view such control as indicative of issuer responsibility for the token’s operations and risks, which could heighten Streamex’s compliance obligations under securities, commodities, or consumer protection laws.
These risks could negatively affect the reliability, security, and market acceptance of Streamex’s tokenized products and may adversely impact Streamex’s reputation and financial performance.
There is no live proof-of-reserves dashboard or public confirmation of 1:1 gold backing for tokens at this time.
Transparency around collateralization is essential to building trust in asset-backed digital tokens. As of the date of this Annual Report on Form 10-K, Streamex has not launched a real-time or publicly accessible proof-of-reserves dashboard to confirm that issued gold-backed tokens are fully supported by an equivalent volume of vaulted bullion. In the absence of such a mechanism, tokenholders and market participants must rely solely on Streamex’s internal records and representations.
The lack of independent, real-time validation may raise concerns among investors, counterparties, and regulators regarding the sufficiency and accuracy of the SPV’s gold reserves. This is particularly relevant in the context of blockchain-based financial products, where decentralized verification and transparency are commonly expected.
Failure to implement a robust proof-of-reserves system in a timely manner—or if such a system is perceived as unreliable or insufficiently transparent—could undermine confidence in Streamex’s token issuance practices. This may impair secondary market liquidity, reduce institutional participation, and increase regulatory scrutiny, any of which could materially and adversely affect Streamex’s reputation, token valuation, and business prospects.
Streamex may not prevent issuance of tokens in excess of gold held if smart contract or operational safeguards fail.
A foundational element of Streamex’s business model is to be the issuance of gold-backed tokens intended to represent specific, contractually defined quantities of physical gold. This 1:1 linkage between tokens and gold reserves is designed to ensure trust, transparency, and value integrity. However, the effectiveness of this framework depends on both the proper functioning of smart contract logic and sound internal controls.
If the underlying smart contracts contain flaws, are misconfigured, or are compromised through a security breach, Streamex may unintentionally issue tokens exceeding its actual gold reserves. Similarly, if internal recordkeeping or reconciliation practices fail—whether due to human error, system malfunction, or inadequate oversight—Streamex could lose track of reserve levels or erroneously authorize new issuance.
Such over-issuance could lead to a mismatch between outstanding token volume and the gold actually held in custody, triggering valuation discrepancies, reputational harm, and potential legal liability. Investors may lose confidence in Streamex’s controls, and regulators may view the incident as a failure to comply with securities, commodities, or consumer protection standards.
Failure to prevent or promptly detect issuance errors could materially and adversely affect the price, liquidity, and market acceptance of Streamex’s tokens, and may expose Streamex to enforcement actions, class actions, or contractual claims from impacted tokenholders.
Streamex’s tokenized gold products are expected to be classified as securities exposing Streamex to comprehensive and evolving regulatory obligations across multiple jurisdictions.
Based on the Supreme Court’s Howey test and updated SEC guidance, tokens representing interests in a fund that deploys gold into leases or contractual claims on gold deliveries are likely to meet the definition of an “investment contract” and thus be treated as securities under U.S. law. As confirmed in the Coinbase Global, Inc. S-1 filing, “A particular crypto asset’s status as a ‘security’ … is subject to a high degree of uncertainty”. The SEC has reiterated this position in recent enforcement actions and filings, emphasizing that most tokens involving profit expectations and reliance on centralized efforts—especially those tied to traditional assets like gold—may qualify as securities.
Consequently, Streamex must ensure compliance with stringent regulatory frameworks, including:
Registration or exemption of primary token issuances under the Securities Act;
Registration of secondary trading platforms—such as broker-dealers, ATS, or national securities exchanges;
Regular disclosures, financial reporting, and audit obligations;
Robust AML/KYC, transfer agent, and resale restriction policies.
Failure to comply could expose Streamex to enforcement actions, civil liabilities, and investor rescission demands. Such outcomes are consistent with SEC regulatory posture in Coinbase , which prompted investigations related to offering alleged unregistered securities tokens, staking programs, and wallet services.
Additionally, SEC staff recently clarified that tokens associated with centralized issuer control, profit-driven marketing, or token-structure authority (e.g., pausing or burning tokens) are more likely to be deemed securities—even absent official guidance—reinforced by “‘reasonable expectation of profit’ plus ‘issuer influence’” principles.
Outside the U.S., jurisdictions including Canada, the EU, and Singapore maintain similar classifications for tokenized assets. While Streamex operates under a Canadian Exempt Market Dealer license, any expansion into the U.S. or other foreign markets could trigger additional registrations or exemptive relief obligations—each accompanied by costs, delays, and shifting legal interpretations.
Should regulatory authorities determine that Streamex’s tokens are unregistered securities—or should new securities rules for tokenized assets be enacted—Streamex could be required to:
Halt token sales;
Rework token mechanics to comply with securities regulation;
Secure broker-dealer or exchange registration;
Recall or delist tokens;
Compensate investors or unwind transactions.
Such outcomes could significantly restrict token liquidity, delay platform rollouts, burden operations with compliance costs, and limit Streamex’s ability to scale its gold-token and RWA strategy.
Streamex has not received any no-action relief or regulatory approvals in the United States or other jurisdictions outside Canada, which may subject it to enforcement risk and limit its ability to operate.
As of the date of this Annual Report on Form 10-K, Streamex has not obtained no-action relief, exemptive orders, or other formal regulatory approvals from the SEC, the CFTC, or any other regulatory authority outside Canada. While Streamex currently operates under an exempt market dealer registration in Canada, any offer, sale, or promotion of tokens in other jurisdictions—including the United States—may be deemed to involve the offering of securities, derivatives, or other regulated instruments.
Without such relief or registrations, Streamex could be subject to enforcement actions, civil penalties, or demands for rescission from investors if regulators determine that its operations violate local securities or commodities laws. In the United States, for example, the SEC has pursued enforcement actions against digital asset platforms and issuers that did not register their offerings or trading venues, or that failed to otherwise comply with applicable securities laws. Similarly, the CFTC has taken the position that certain digital asset transactions may fall within its regulatory remit, including under rules applicable to commodity interests, swaps, and futures.
Furthermore, if Streamex were to engage in marketing, issuance, or token transfer activities that are later found to have triggered regulatory obligations outside of Canada, it could face retroactive enforcement, forced platform modifications, investor claims, reputational damage, or operational disruptions.
Until Streamex obtains the necessary authorizations, relief, or determinations from relevant regulatory bodies in key markets, its ability to scale, onboard institutional investors, and operate a cross-border digital asset platform will remain highly constrained.
Onboarding is subject to AML/KYC procedures, but compliance infrastructure and enforcement mechanisms may be evolving or incomplete.
Streamex’s ability to administer token offerings and operate the Streamex Platform is contingent on its implementation of AML and KYC protocols that comply with applicable legal and regulatory requirements. While these controls are operational, they may not yet meet the heightened expectations of global regulators, financial institutions, or institutional investors, and the Company continues to enhance its compliance infrastructure.
Digital asset markets, particularly those involving cross-border transactions and asset-backed tokens, face increasing scrutiny under global AML frameworks such as the Financial Action Task Force recommendations and U.S. Bank Secrecy Act rules. Streamex’s current infrastructure may not yet include fully integrated tools for sanctions screening, politically exposed person flagging, suspicious activity reporting, or automated transaction monitoring.
If Streamex’s AML/KYC controls are deemed insufficient, improperly enforced, or inconsistently applied, Streamex could face enforcement actions, fines, reputational damage, or restrictions on banking, custody, or exchange access. In addition, counterparties, including bullion custodians, market makers, and institutional investors, may decline to engage with Streamex without confidence in the robustness of its compliance program.
Failure to build, maintain, and enforce a comprehensive AML/KYC framework could impede Streamex’s ability to scale operations, access global markets, or establish the credibility necessary to attract and retain users on its tokenization platform.
Tokens are not currently listed on any exchange, and no market makers are engaged to provide liquidity or price stability.
As of the date of this Annual Report on Form 10-K, Streamex’s tokenized products, including its gold-backed tokens, are not listed on any centralized or decentralized exchange, nor has Streamex engaged any market makers to support liquidity or maintain price stability in secondary markets. Without an active trading venue or committed liquidity providers, investors may be unable to sell their tokens on a timely basis or at favorable prices, which could materially impair the perceived and actual value of the tokens.
The absence of listing arrangements may also limit price discovery, widen bid-ask spreads, and increase the risk of abrupt price volatility due to low trading volumes or concentrated holdings. Moreover, without market maker participation, tokens may be more susceptible to manipulation or speculative trading, especially in periods of market stress or heightened interest in gold or commodity-based digital assets.
Further, the listing of tokenized assets on regulated exchanges is subject to a range of legal, operational, and jurisdictional requirements, including but not limited to exchange approvals, securities law compliance, and compatibility with listing standards. There can be no assurance that Streamex will succeed in listing its tokens on any exchange in the near term, or at all.
In the absence of accessible, liquid secondary markets, tokenholders may be unable to exit their positions efficiently, and Streamex may face challenges in achieving broad adoption of its platform among institutional or retail investors seeking tradable, fungible digital asset products.
In the absence of well-defined and enforceable transfer restrictions or lock-up terms, there is an increased risk that tokens may be transferred in violation of applicable securities laws, which could expose Streamex and tokenholders to legal liability, rescission claims, or enforcement actions. Conversely, overly restrictive mechanics could hinder investor participation, reduce market liquidity, or impair the attractiveness of the tokens as financial instruments.
Additionally, resale rules under securities law (e.g., Rule 144 under the Securities Act) may require holding periods, reporting obligations, and affiliate restrictions, none of which can be operationalized without clearly documented and enforceable mechanics.
Until such terms are disclosed and implemented through smart contracts, tokenholder agreements, or platform-level controls, investors face material uncertainty regarding the liquidity, portability, and regulatory treatment of their tokens. This uncertainty could limit institutional interest, raise compliance burdens, and adversely affect Streamex’s ability to execute its digital asset strategy.
In the event the bullion custodian or Streamex ceases operations, tokenholders may suffer losses and may not recover their full holdings.
The administration of GLDY by the Streamex Platform relies heavily on third-party bullion custodians to store and safeguard the physical gold that underpins its tokenized assets. These custodians maintain insurance and adhere to industry best practices. In the event that a bullion custodian ceases operations—whether due to insolvency, regulatory action, negligence, or other disruption—the GLDY SPV may have limited or no ability to promptly retrieve or substitute the underlying gold, which could impair the value or redeemability of the associated tokens.
Streamex itself is a newly formed company with no established operating history and has not yet implemented bankruptcy-remote structures that would insulate tokenholders from the risks of issuer failure. Likewise, MM does not have extensive experience with the implementation of bankruptcy-remote structures such as those that support GLDY. If Streamex or MM were to cease operations or enter insolvency proceedings, tokenholders may be treated as unsecured creditors and subject to delays, write-downs, or total losses in the claims process.
Neither the custodians nor Streamex may be able to guarantee uninterrupted access to the gold reserves or to administer the token rights effectively during such periods of disruption. As a result, tokenholders may face material impairment in value, diminished liquidity, and a lack of clear recourse, which could have a significant adverse effect on the perceived reliability and attractiveness of the Streamex platform.
If we were deemed to be an investment company under the Investment Company Act of 1940, applicable restrictions could significantly limit our business operations and adversely affect our ability to execute our strategy.
The Investment Company Act of 1940 (the “1940 Act”) imposes significant regulatory burdens on entities that meet the definition of an “investment company.” Under Sections 3(a)(1)(A) and 3(a)(1)(C) of the 1940 Act, a company may be deemed to be an investment company if it is or holds itself out as being primarily engaged in the business of investing, reinvesting, or trading in securities or if it owns or proposes to acquire investment securities that comprise more than 40% of the value of its total assets (excluding government securities and cash items) on an unconsolidated basis. Rule 3a-1 under the 1940 Act provides a safe harbor from investment company status, subject to limitations on the proportion of assets and income derived from investment securities.
Streamex is a software development company that intends to develop and commercialize blockchain-based solutions for tokenized commodities, including gold, decentralized trading infrastructure, and blockchain-enabled capital markets products. Our primary business is the development of technology and platforms—not investing in or trading securities. However, given that our business model involves the issuance and management of tokenized assets that may be deemed securities in certain jurisdictions, there is a risk that regulators such as the SEC could take the position that Streamex or a Streamex-affiliated issuer is engaged in investment company activities.
The application of the 1940 Act to digital assets, including tokenized commodities and smart contract-based financial products, is evolving and may raise novel interpretive issues. For example, in 2022 the SEC brought an action against BlockFi Lending LLC, asserting that it was operating as an unregistered investment company due to its securities-based loan portfolio and related activities. Similarly, tokenized gold products or SPVs used in Streamex’s structure—depending on their asset composition, investor rights, and operational model—may raise comparable concerns.
If we were to be deemed an investment company, or if our tokenization activities were construed as causing us to engage in investment company activities under the 1940 Act, we could become subject to significant restrictions, including limitations on leverage, capital structure, affiliated transactions, and the issuance of different classes of securities. Moreover, we may be required to register as an investment company, divest certain operations, or restructure our product lines and legal entities—any of which could have a material adverse effect on our business, financial condition, and prospects.
We intend to conduct our operations and structure our product offerings in a manner designed to comply with available exemptions and to avoid investment company status. However, there can be no assurance that regulators will not challenge our characterization of our business activities or that we will continue to qualify for applicable exemptions. If we were deemed to be an investment company and failed to register as such or to qualify for an exemption, we could be subject to enforcement actions, penalties, and reputational harm.
Our PURE EP and other product candidates are in continued development and may not be successfully developed or commercialized.
Although our main product candidate, PURE EP, received FDA 510(k) clearance from FDA, we are currently conducting research studies, which may require substantial further capital expenditure, to establish the safety and efficacy data needed to obtain acceptance by the medical community and coverage by third-party payors. The continued development of PURE EP, and/or any other product candidates we may develop, is dependent upon our ability to obtain sufficient additional financing. However, even if we are able to obtain the requisite financing to fund our development program, we cannot assure you that our current or future product candidates will be successfully developed or commercialized. Our failure to develop, manufacture, receive regulatory approval for, or successfully commercialize any of our product candidates could result in the failure of our business and a loss of all of your investment in our company.
We may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Any additional funds that we obtain may not be on terms favorable to us or our stockholders and may require us to relinquish valuable rights.
Until PURE EP or another product of ours become commercially viable, we will have to fund all of our operations and capital expenditures from cash on hand, public or private equity offerings, debt financings, bank credit facilities or corporate collaboration and licensing arrangements. However, we may need to raise additional funds more quickly if one or more of our assumptions prove to be incorrect or if we choose to expand our product development efforts more rapidly than we presently anticipate. We also may decide to raise additional funds before we require them if we are presented with favorable terms for raising capital.
If we seek to sell additional equity or debt securities, obtain a bank credit facility or enter into a corporate collaboration or licensing arrangement, we may not obtain favorable terms for us and/or our stockholders or be able to raise any capital at all, all of which could result in a material adverse effect on our business and results of operations. The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also result in covenants that would restrict our operations. Raising additional funds through collaboration or licensing arrangements with third parties may require us to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us or our stockholders. In addition, we could be forced to discontinue product development, reduce or sales and marketing efforts and business , all of which could have an impact on our business and results of operations.
We may be unable to develop our existing or future technology.
Our product, the PURE EP, may not deliver the levels of accuracy and reliability needed to make it a successful product in the marketplace, and the development of such accuracy and reliability may be indefinitely delayed or may never be achieved. In addition, we may experience delays in the development of our technology for other reasons, including failure to obtain necessary funding and failure to obtain all necessary regulatory approvals. Failure to develop this or other technology could have an adverse material effect on our business, financial condition, results of operations and future prospects.
We may experience delays in any phase of the preclinical or clinical development of a product, including during its research and development.
We may experience delays in any phase of the preclinical or clinical development of a product, including during its research and development. The completion of any of these studies may be delayed or halted for numerous reasons, including, but not limited to, the following:
successful completion of the pre-clinical and clinical development of our products;
the FDA or other regulatory authorities do not approve a clinical study protocol or place a clinical study on hold;
patients do not enroll in a clinical study or results from patients are not received at the expected rate;
patients discontinue participation in a clinical study prior to the scheduled endpoint at a higher than expected rate;
patients experience adverse events from a product we develop;
third-party clinical investigators do not perform the studies in accordance with the anticipated schedule or consistent with the study protocol and good clinical practices or other third-party organizations do not perform data collection and analysis in a timely or accurate manner;
third-party clinical investigators engage in activities that, even if not directly associated with our studies, result in their debarment, loss of licensure, or other legal or regulatory sanction;
regulatory inspections of manufacturing facilities, which may, among other things, require us to undertake corrective action or suspend the preclinical or clinical studies;
changes in governmental regulations or administrative actions;
the interim results of the preclinical or clinical study, if any, are inconclusive or negative; and
the study design, although approved and completed, is inadequate to demonstrate effectiveness and safety.
If the preclinical and clinical studies that we are required to conduct to gain regulatory approval are delayed or unsuccessful, we may not be able to market any product that we develop in the future. Preclinical studies and clinical trials are expensive and difficult to design and implement and any delays or prolongation of our preclinical and clinical studies will require additional capital. There is no assurance that we will be able to acquire additional capital to support our studies. The failure to obtain additional capital would have a material adverse effect on the Company.
We have completed one clinical trial of our product. The results of additional clinical studies may not support the usefulness of our technology.
In November 2019, we commenced our first clinical study with PURE EP and completed the clinical trial as of September 2021. Conducting clinical trials is a long, expensive, and uncertain process that is subject to delays and failure at any stage. Clinical trials can take months or years. The commencement or completion of any of our subsequent clinical trials may be delayed or halted for numerous reasons, including:
the FDA may not approve a clinical trial protocol or a clinical trial, or may place a clinical trial on hold;
subjects may not enroll in clinical trials at the rate we expect, or we may not follow up on subjects at the rate we expect;
subjects may experience unexpected adverse events;
third-party clinical investigators may not perform our clinical trials consistent with our anticipated schedule or the clinical trial protocols and good clinical practices, or other third-party organizations may not perform data collection and analysis in a timely or accurate manner;
interim results of any of our clinical trials may be inconclusive or negative;
regulatory inspections of our clinical trials may require us to undertake corrective action or suspend or terminate the clinical trials if investigators find us to be in violation of regulatory requirements; or
governmental regulations or administrative actions may change and impose new requirements, particularly with respect to reimbursement.
Results of pre-clinical studies do not necessarily predict future clinical trial results and previous clinical trial results may not be repeated in subsequent clinical trials. We may experience delays, cost overruns and project terminations despite achieving promising results in pre-clinical testing or early clinical testing. In addition, the data obtained from clinical trials may be inadequate to support a device’s approval or clearance, or to demonstrate safety and efficacy to the extent required to obtain third-party coverage and/or reimbursement. The FDA may disagree with our interpretation of the data from our clinical trials, or may find the clinical trial design, conduct, or results inadequate to demonstrate the safety and effectiveness of the product candidate. The FDA may also require additional pre-clinical studies or clinical trials that could further delay clearance or approval of any product candidates we may develop in the future and/or the PURE EP to the extent we seek clearance/approval for different indications than that for which it is currently cleared. If we are in receiving FDA clearance approval of a future product candidate, or a product’s clearance or approval is withdrawn, we would not be to commercialize the product(s) in the U.S., which could our business. Moreover, we face similar risks in other jurisdictions in which we may sell or propose to sell our products.
The medical device industry is subject to stringent regulation and failure to obtain regulatory approval will prevent commercialization of our products.
Medical devices are subject to extensive and rigorous regulation by the FDA pursuant to the Federal Food, Drug, and Cosmetic Act, by comparable agencies in foreign countries and by other regulatory agencies and governing bodies. Under the Federal Food, Drug, and Cosmetic Act and associated regulations, manufacturers of medical devices must comply with certain regulations that cover the composition, labeling, testing, clinical study, manufacturing, packaging and distribution of medical devices. In addition, medical devices must receive FDA clearance or approval before they can be commercially marketed in the U.S., and the FDA may require testing and surveillance programs to monitor the effects of approved products that have been commercialized and can prevent or limit further marketing of a product based on the results of these post-market evaluation programs. The process of obtaining marketing clearance or approval from the FDA for new products could take a significant period of time, require the expenditure of substantial resources, involve rigorous pre-clinical and clinical testing, require changes to the products and result in limitations on the indicated uses of the product. In addition, if we seek regulatory approval in non-U.S. markets, we will be subject to further regulatory approvals that may require additional costs and resources. There is no assurance that we will obtain necessary regulatory approvals in a timely manner, or at all.
To obtain 510(k) clearance for a medical device, a pre-market notification must be submitted to the FDA demonstrating that the device is “substantially equivalent” to a previously cleared “predicate” device. A new device is substantially equivalent to a predicate device “at least as safe and effective” as the predicate. The FDA considers a device substantially equivalent to a predicate if it has the same intended use as the predicate and has either: (i) the same technological characteristics as the predicate or (ii) different technological characteristics from the predicate, but the information submitted to the FDA does not raise new questions of safety or effectiveness or demonstrates that the device is at least as safe and effective as the predicate.
We received 510(k) clearance to market our current lead product, the PURE EP in the U.S. However, if we intend to market the PURE EP for additional medical uses or indications, we may need to submit additional 510(k) applications to the FDA that are supported by satisfactory clinical trial results specifically for the additional indication. Clinical trials necessary to support 510(k) clearance or PMA approval for any future product candidates, or any new indications for use for our PURE EP, would be expensive and could require the enrollment of large numbers of suitable patients who could be difficult to identify and recruit. Delays or failures in any necessary clinical trials could prevent us from commercializing any modified product or new product candidate and could adversely affect our business, operating results and prospects.
The results of our initial clinical trials may not provide sufficient evidence to allow the FDA to grant us such additional marketing clearances and even additional trials requested by the FDA may not result in our obtaining 510(k) marketing clearance for our product. The failure to obtain FDA marketing clearance for any additional indications for the PURE EP or any other of our future products would have a material adverse effect on our business.
We, and our third-party manufacturer(s), are, and will be, subject to extensive regulation by the FDA.
In addition to the pre-market regulations, once a device is approved or cleared for the applicable indications for use, numerous FDA regulations apply, including but not limited to those relating to manufacturing, labeling, packaging, advertising, and record keeping. Notably, these regulations apply to us, as well as our contract manufacturer(s). Even if regulatory approval or clearance of a product is obtained, the approval or clearance may be subject to limitations on the uses for which the product may be marketed or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product. Any such requirements could reduce our revenues, increase our expenses, and render the product not commercially viable. If we fail to comply with the applicable regulatory requirements, or if previously unknown problems with any approved commercial products, manufacturers, or manufacturing processes are discovered, we could be subject to administrative or judicially imposed sanctions or other negative consequences, including:
restrictions on our products, manufacturers or manufacturing processes;
warning letters and untitled letters;
civil penalties and criminal prosecutions and penalties;
fines;
injunctions;
product seizures or detentions;
import or export bans or restrictions;
voluntary or mandatory product recalls and related publicity requirements;
suspension or withdrawal of regulatory approvals;
total or partial suspension of production; and
refusal to approve pending applications for marketing approval of new products or of supplements to approved applications.
Regulations are constantly changing, and in the future our business may be subject to additional regulations that increase our compliance costs.
We believe we understand the current laws and regulations to which our products will be subject in the future. However, federal, state and foreign laws and regulations relating to the sale of our products are subject to future changes, as are administrative interpretations of regulatory agencies. If we fail to comply with such federal, state or foreign laws or regulations, we may fail to obtain regulatory approval for our products and, if we have already obtained regulatory approval, we could be subject to enforcement actions, including injunctions preventing us from conducting our business, withdrawal of clearances or approvals and civil and criminal penalties. In the event that federal, state, and foreign laws and regulations change, we may incur additional costs to seek government approvals, in addition to the clearance from the FDA in order to sell or market our products. If we are slow or unable to adapt to changes in existing regulatory requirements or the promulgation of new regulatory requirements or policies, we or our licensees may, following approval, lose marketing approval for our products which will impact our ability to conduct business in the future.
The market for our technology and revenue generation avenues for our EP products may be slow to develop, if at all.
The market for our products may be slower to develop or smaller than estimated or it may be more difficult to build the market than anticipated. The medical community may resist our products or be slower to accept them than we anticipate. Revenues from our products may be delayed or costs may be higher than anticipated which may result in our need for additional funding. We anticipate that our principal route to market will be through commercial distribution partners. These arrangements are generally non-exclusive and have no guaranteed sales volumes or commitments. The partners may be slower to sell our products than anticipated. Any financial, operational or regulatory risks that affect our partners could also affect the sales of our products. In the current economic environment, hospitals and clinical purchasing budgets may exercise greater restraint with respect to purchases, which may result in purchasing decisions being delayed or denied. If any of these situations were to occur this could have a material adverse effect on our business, financial condition, results of operations and future prospects.
Our estimate of the size of our addressable EP market may prove to be inaccurate.
While our addressable market size estimate for the EP market was made in good faith and is based on assumptions and estimates we believe to be reasonable, this estimate may not be accurate. If our estimates of the size of our addressable market are not accurate, our potential for future growth may be less than we currently anticipate, which could have a material adverse effect on our business, financial condition, and results of operations.
If we seek to market our EP products in foreign jurisdictions, we may need to obtain regulatory approval in these jurisdictions.
In order to market our products in the European Union and many other foreign jurisdictions, we may need to obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. Approval procedures vary among countries (except with respect to the countries that are part of the European Economic Area) and can involve additional clinical testing. The time required to obtain approval may differ from that required to obtain FDA approval. Should we decide to market our products abroad, we may fail to obtain foreign regulatory approvals on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one foreign regulatory authority, including obtaining CE Mark approval, does not ensure approval by regulatory authorities in other foreign countries or by the FDA. We may be unable to file for, and may not receive, necessary regulatory approvals to commercialize our products in any foreign market, which could adversely affect our business prospects. In addition, a new Medical Device Regulation was published in 2017, which includes additional premarket and post-market requirements, as well as potential product reclassifications or more stringent commercialization requirements that could delay or otherwise adversely affect our clearances and approvals.
The EP market is highly competitive.
There are a number of groups and organizations, such as healthcare, medical device and software companies in the EP market that may develop a competitive offering to our products. The largest companies in the EP market are GE, Johnson & Johnson, Boston Scientific, Siemens, Medtronic, and Abbott. All of these companies have significantly greater resources, experience and name recognition than we possess. There is no assurance that they will not attempt to develop similar or superior products, that they will not be successful in developing such products or that any products they may develop will not have a competitive advantage over our products. Moreover, our product may not be viewed as superior to existing technology or new technology from our competitors and as a result we may not be able to justify expected selling price our product, which may have a material adverse effect on market acceptance of our product. In addition, if we experience delayed regulatory approvals or disputed clinical claims, we may not have a commercial or clinical over competitors’ products that we believe we currently possess. Should a offering come to market, this could have a material effect on our business, financial condition, results of operations and future prospects.
We rely on key officers, consultants and scientific and medical advisors, and their knowledge of our business and technical expertise would be difficult to replace.
We are highly dependent on our officers, consultants and scientific and medical advisors because of their expertise and experience in medical device development. We do not have “key person” life insurance policies for any of our officers. Moreover, if we are unable to obtain additional funding, we will be unable to meet our current and future compensation obligations to such employees and consultants. In light of the foregoing, we are at risk that one or more of our consultants or employees may leave our company for other opportunities where there is no concern about such employers fulfilling their compensation obligations, or for other reasons. The loss of the technical knowledge and management and industry expertise of any of our key personnel could result in delays in product development, loss of customers and sales and diversion of management resources, which could adversely affect our results of operations.
We may fail to attract and retain qualified personnel.
We expect to rapidly expand our operations and grow our sales, research and development and administrative operations. This expansion is expected to place a significant strain on our management and will require hiring a significant number of qualified personnel. Accordingly, recruiting and retaining such personnel in the future will be critical to our success. There is intense competition from other companies, research and academic institutions, government entities and other organizations for qualified personnel in the areas of our activities. Many of these companies, institutions and organizations have greater resources than we do, along with more prestige associated with their names. If we fail to identify, attract, retain and motivate these highly skilled personnel, we may be unable to continue our marketing and development activities, and this could have a material adverse effect on our business, financial condition, results of operations and future prospects.
If we do not effectively manage changes in our business, these changes could place a significant strain on our management and operations.
Our ability to grow successfully requires an effective planning and management process. The expansion and growth of our business could place a significant strain on our management systems, infrastructure and other resources. To manage our growth successfully, we must continue to improve and expand our systems and infrastructure in a timely and efficient manner. Our controls, systems, procedures and resources may not be adequate to support a changing and growing company. If our management fails to respond effectively to changes and growth in our business, including acquisitions, there could be a material adverse effect on our business, financial condition, results of operations and future prospects.
Our strategic business plan may not produce the intended growth in revenue and operating income.
Our strategies ultimately include making significant investments in sales and marketing programs to achieve revenue growth and margin improvement targets. If we do not achieve the expected benefits from these investments or otherwise fail to execute on our strategic initiatives, we may not achieve the growth improvement we are targeting and our results of operations may be adversely affected. We may also fail to secure the capital necessary to make these investments, which will hinder our growth.
In addition, as part of our strategy for growth, we may make acquisitions and enter into strategic alliances such as joint ventures and joint development agreements. However, we may not be able to identify suitable acquisition candidates, complete acquisitions or integrate acquisitions successfully, and our strategic alliances may not prove to be successful. In this regard, acquisitions involve numerous risks, including difficulties in the integration of the operations, technologies, services and products of the acquired companies and the diversion of management’s attention from other business concerns. Although we will endeavor to evaluate the risks inherent in any particular transaction, there can be no assurance that we will properly ascertain all such risks. In addition, acquisitions could result in the incurrence of substantial additional indebtedness and other expenses or in potentially dilutive issuances of equity securities. There can be no assurance that difficulties encountered with acquisitions will not have a material adverse effect on our business, financial condition and results of operations.
We currently have limited sales, marketing or distribution operations and will need to expand our expertise in these areas.
We currently have limited sales, marketing or distribution operations. We have begun implementing a market development program and are in the process of building such operations in connection with the commercialization of PURE EP, and we are expanding our expertise in sales, marketing and distribution operations for commercial growth. To increase internal sales, distribution and marketing expertise and be able to conduct these operations, we have begun to invest in and will have to invest significant amounts of financial and management resources. In developing these functions ourselves, we could face a number of risks, including:
we may not be able to attract and build an effective marketing or sales force;
the cost of establishing, training and providing regulatory oversight for a marketing or sales force may be substantial; and
there are significant legal and regulatory risks in medical device marketing and sales that we have never faced, and any failure to comply with applicable legal and regulatory requirements for sales, marketing and distribution could result in an enforcement action by the FDA, European regulators or other authorities that could jeopardize our ability to market our planned products or could subject us to substantial liability.
Our product development program depends upon third-party researchers, including Mayo Clinic, who are outside our control and whose negative performance could materially hinder or delay our pre-clinical testing or clinical trials.
We do not have the ability to conduct all aspects of pre-clinical testing or clinical trials ourselves. We depend upon independent investigators and collaborators, such as commercial third-parties, government, universities and medical institutions, to conduct our pre-clinical and clinical trials under agreements with us. For our first clinical trial for the PURE EP, titled “Novel Cardiac Signal Processing System for Electrophysiology Procedures (PURE EP 2.0 Study)” which commenced in November 2019, we rely on third parties, including TCARF and Mayo Clinic to conduct the patient cases. In addition, we are party to various license agreements with Mayo, pursuant to which we rely on research and development information, materials, technical data, unpatented inventions, trade secrets, know-how and supportive information of Mayo to develop, make, have made, use, offer for sale, sell, and import licensed products. These collaborators are not our employees and we cannot control the amount or timing of resources that they devote to our programs. These investigators may not assign as great a priority to our programs or pursue them as diligently as we would if we were undertaking such programs ourselves. The failure of any of these outside collaborators to perform in an acceptable and timely manner in the future, including in accordance with any applicable regulatory requirements, such as clinical and laboratory practices, or pre-clinical testing or clinical trial protocols, could cause a or otherwise affect our pre-clinical testing or clinical trials, our in obtaining regulatory approvals and, ultimately, the timely of our development programs. In addition, these may also have relationships with other commercial entities, some of whom may compete with us. If our assist our competitors at our expense, our competitive position would be .
If healthcare providers are unable to obtain sufficient reimbursement or other financial incentives from third-party healthcare payers related to the use of our products, their adoption and our future product sales will be materially adversely affected.
Widespread adoption of the PURE EP, and any other products we may develop in the future, by the medical community is unlikely to occur without a financial incentive from third-party payors for the use of these products. Third-party payors include but are not limited to governmental programs such as Medicare and Medicaid, commercial health insurers and private payors, workers’ compensation programs, and other organizations. Currently, the PURE EP does not receive separate reimbursement from any third-party payor. Instead, healthcare providers typically receive reimbursement for the procedure in which our product is used. Future regulatory action by CMS or other governmental agencies, or unfavorable clinical data, among other things, may impact coverage and/or reimbursement policies for procedures performed using our products. If healthcare providers are unable to obtain adequate coverage of, or reimbursement for, procedures performed using our products, or if managed care organizations do not receive improved capitated payments due to more accurate patient risk assessment using our products, we may be unable to sell our products at levels that are sufficient to allow us to achieve and maintain profitability, and our business would suffer significantly.
We may face risks associated with future litigation and claims.
We may, in the future, be involved in one or more lawsuits, claims or other proceedings. These suits could concern issues including contract disputes, employment actions, employee benefits, taxes, environmental, health and safety, personal injury and product liability matters. Due to the uncertainties of litigation, we can give no assurance that we will prevail on any claims made against us in any such lawsuit. Also, we can give no assurance that any other lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.
The risk that we may be sued on product liability claims is inherent in the development and commercialization of medical devices. Specifically, we believe we will be subject to product liability claims or product recalls, particularly in the event of false positive or false negative reports, because we plan to develop and manufacture medical diagnostic products. Once a product is approved for sale and commercialized, the likelihood of product liability lawsuits increases. Product liability claims could be asserted directly by consumers, health-care providers or others. We have obtained product liability insurance coverage; however such insurance may not provide full coverage for our current or future clinical trials, products to be sold, and other aspects of our business. A product recall or a successful product liability claim or claims that exceed our planned insurance coverage could have a material effect on us. In addition, insurance coverage is becoming increasingly expensive and we may not be to maintain current coverage, or expand our insurance coverage to include future clinical trials or the sale of new products or existing products in new territories, at a reasonable cost or in sufficient amounts to protect due to product liability or at all. A product liability claim or series of brought us could result in judgments, , and liabilities that could have a material effect on our business, financial condition and results of operations. In the event of an award us during a time when we have no available insurance or insurance, we may sustain significant of our operating capital. We may incur significant expense and these , even if they do not result in liability. Moreover, even if no judgments, , or liabilities are imposed on us, our reputation could , which could have a material effect on our business, financial condition and results of operations, as well as our reputation in the medical and investment communities.
Our business is subject to cybersecurity risks.
Our operations are increasingly dependent on information technologies and services. Threats to information technology systems associated with cybersecurity risks and cyber incidents or attacks continue to grow, and include, among other things, storms and natural disasters, terrorist attacks, utility outages, theft, viruses, phishing, malware, design defects, human error, and complications encountered as existing systems are maintained, repaired, replaced, or upgraded. Risks associated with these threats include, among other things:
theft or misappropriation of funds;
loss, corruption, or misappropriation of intellectual property, or other proprietary, confidential or personally identifiable information (including supplier, or employee data);
disruption or impairment of our and our business operations and safety procedures;
damage to our reputation with our potential customers and the market;
exposure to litigation;
increased costs to prevent, respond to or mitigate cybersecurity events.
As we expand our digital asset infrastructure and tokenization initiatives, cybersecurity and data protection risks may be heightened. A successful cybersecurity incident could result in service disruption, theft or loss of digital assets, unauthorized access to confidential or personally identifiable information, reputational harm, regulatory scrutiny, litigation, and increased costs to prevent, respond to, or mitigate cybersecurity events. We also have limited control over the information technology systems of third parties with which our systems may connect and communicate, including custodians, compliance service providers, and other vendors, and an incident at a third party could adversely affect us.
Although we utilize various procedures and controls to mitigate our exposure to such risk, cybersecurity attacks and other cyber events are evolving and unpredictable. Moreover, we have no control over the information technology systems of our suppliers, and others with which our systems may connect and communicate. As a result, the occurrence of a cyber incident could go unnoticed for a period time.
We presently maintain insurance coverage to protect against cybersecurity risks. However, we cannot ensure that it will be sufficient to cover any particular losses we may experience as a result of such cyberattacks. Any cyber incident could have a material adverse effect on our business, financial condition and results of operations.
We may be subject, directly or indirectly, to U.S. federal and state healthcare laws, including fraud and abuse, false claims, and privacy laws and regulations. Prosecutions under such laws have increased in recent years and we may become subject to such litigation and enforcement. If we are unable to, or have not fully complied with such laws, we could face substantial penalties.
We are subject, directly or indirectly, to various U.S. federal and state healthcare laws and regulations. These laws include fraud and abuse laws, such as the federal Anti-Kickback Statute, federal False Claims Act, and federal Foreign Corrupt Practices Act. These laws may impact, among other things, our proposed sales, marketing and education programs. In addition, we may be subject, directly or indirectly, to patient privacy regulations by both the federal government and the states in which we conduct our business. The healthcare laws that may affect our ability to operate include, but are not limited to, the following.
The federal Anti-Kickback Statute, which prohibits persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs.
The federal physician self-referral law, commonly referred to as the Stark Law, which prohibits a physician from making a referral for certain designated health services covered by the Medicare program, if the physician or an immediate family member has a financial relationship with the entity providing the designated health services, unless the financial relationship falls within an applicable exception to the prohibition.
Federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which prohibits persons from knowingly filing, or causing to be filed, a false claim to, or the knowing use of false statements to obtain payment from, the federal government. Suits may be filed under the federal False Claims Act by the government or by an individual on behalf of the government (known as “qui tam” actions). Such individuals, commonly known as “relators” or “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement.
The federal transparency requirements under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, including the provision known as the Physician Payments Sunshine Act, which requires manufacturers of drugs, biologics, devices and medical supplies covered under Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) to record any information related to payments and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members, and to report this data annually to CMS for subsequent public disclosure. Manufacturers must also disclose investment interests held by physicians and their family members.
The federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies.
Federal criminal statutes created through the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their respective implementing regulations, which imposes requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information.
Other federal and state fraud and abuse laws, prohibitions on self-referral and kickbacks, fee-splitting restrictions, prohibitions on the provision of products at no or discounted cost to induce physician or patient adoption, and false claims acts, transparency, reporting, and disclosure requirements, which may extend to services reimbursable by any third-party payer, including private insurers.
State and federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that could potentially harm consumers.
Additionally, we may be subject to state equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope and may apply regardless of the payor. Many U.S. states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare services reimbursed by any source, not just governmental payors, including private insurers. Several states impose marketing restrictions or require medical device companies to make marketing or price disclosures to the state. There are ambiguities as to what is required to comply with these state requirements, and if we fail to comply with an applicable state law requirement, we could be subject to penalties.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our future business activities could be subject to challenge under one or more of such laws. In addition, healthcare reform legislation has strengthened these laws. For example, the Affordable Care Act, among other things, amended the intent requirement of the federal Anti-Kickback and criminal healthcare fraud statutes. As a result of such amendment, a person or entity no longer needs to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation. Moreover, the Affordable Care Act provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Act.
Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including penalties, fines and/or exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S. government. In addition, private individuals have the ability to bring actions on behalf of the U.S. government under the False Claims Act as well as under the false claims laws of several states.
Efforts to ensure that our business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our existing or future business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. Any such actions instituted against us could have a significant adverse impact on our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could affect our ability to operate our business and our results of operations. Even if we are in such actions, we may nonetheless be subject to substantial costs, reputational and effects on our ability to operate our business. In addition, the approval and commercialization of any of our products outside the United States will also likely subject us to non-U.S. equivalents of the healthcare laws mentioned above, among other non-U.S. laws.
If any of our employees, agents, or the physicians or other providers or entities with whom we do business are found to have violated applicable laws, we may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs, or, if we are not subject to such actions, we may suffer reputational harm for conducting business with persons or entities found, or accused of being, in violation of such laws. Any such events could adversely affect our ability to operate our business and our results of operations.
In addition, to the extent we commence commercial operations overseas, we will be subject to the federal Foreign Corrupt Practices Act and other countries’ anti-corruption/anti-bribery regimes, such as the U.K. Bribery Act. The federal Foreign Corrupt Practices Act prohibits improper payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business. Safeguards we implement to discourage improper payments or offers of payments by our employees, consultants, sales agents or distributors may be ineffective, and violations of the federal Foreign Corrupt Practices Act and similar laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, any of which would likely our reputation, business, financial condition and results of operations.
We could be adversely affected if healthcare legislation or reform measures substantially change the market for medical care or healthcare coverage in the U.S., negatively affecting our business or revenue for PURE EP or future products.
The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, commonly referred to as the “Healthcare Reform Law,” includes a number of rules regarding health insurance, the provision of healthcare, conditions to reimbursement for healthcare services provided to Medicare and Medicaid patients, and other healthcare policy reforms. Through the law-making process, substantial changes have been and continue to be made to the current system for paying for healthcare in the U.S., including changes made to extend medical benefits to certain Americans who lacked insurance coverage and to contain or reduce healthcare costs (such as by reducing or conditioning reimbursement amounts for healthcare services and medical devices, and imposing additional taxes, fees, and rebate obligations on medical device companies). This legislation was one of the most comprehensive and significant reforms ever experienced by the U.S. in the healthcare industry and has significantly changed the way healthcare is financed by both governmental and private insurers. This legislation has impacted the scope of healthcare insurance and incentives for consumers and insurance companies, among others. Additionally, the Healthcare Reform Law’s provisions were designed to encourage providers to find cost savings in their clinical operations. Medical devices represent a significant portion of the cost of providing care. This environment has caused changes in the purchasing habits of consumers and providers and resulted in specific attention to the pricing negotiation, product selection and utilization review surrounding medical devices. This attention may result in our products we may commercialize or promote, including our current commercial products, being chosen less frequently or the pricing being substantially lowered. At this stage, it is to estimate the full extent of the direct or indirect impact of the Healthcare Reform Law on us.
These structural changes could entail further modifications to the existing system of private payors and government programs (such as Medicare, Medicaid, and the State Children’s Health Insurance Program), creation of government-sponsored healthcare insurance sources, or some combination of both, as well as other changes. Restructuring the coverage of medical care in the U.S. could impact the reimbursement for medical devices, including our current commercial products, those we and our development or commercialization partners are currently developing or those that we may commercialize or promote in the future. If reimbursement for our approved medical devices, products we currently commercialize or promote, or any product we may commercialize or promote is substantially reduced or otherwise adversely affected in the future, or rebate obligations associated with them are substantially increased, it could have a material adverse effect on our reputation, business, financial condition or results of operations.
Extending medical benefits to those who currently lack coverage will likely result in substantial costs to the U.S. federal government, which may force significant additional changes to the healthcare system in the U.S. Much of the funding for expanded healthcare coverage may be sought through cost savings. While some of these savings may come from realizing greater efficiencies in delivering care, improving the effectiveness of preventive care and enhancing the overall quality of care, much of the cost savings may come from reducing the cost of care and increased enforcement activities. Cost of care could be reduced further by decreasing the level of reimbursement for medical services or products (including those products currently being developed by us or our development or commercialization partners or any product we may commercialize or promote, including our current commercial products), or by restricting coverage (and, thereby, utilization) of medical services or products. In either case, a reduction in the utilization of, or reimbursement for, any medical device or any product we may commercialize or promote, including our current commercial products, or for which we receive marketing approval in the future, could have a material adverse effect on our reputation, business, financial condition or results of operations.
Further, the healthcare regulatory environment has seen significant changes in recent years and is still in flux. Legislative initiatives to modify, limit, replace, or repeal the Healthcare Reform Law and judicial challenges have continued for over a decade. However, as of the Supreme Court’s ruling ordering the dismissal of, arguably, the most promising case challenging the Healthcare Reform Law to-date in June 2021, it appears that the Healthcare Reform Law will remain in-effect in its current form for the foreseeable future; however, we cannot predict what additional challenges may arise in the future, the outcome thereof, or the impact any such actions may have on our business. Additionally, the previous Biden administration has introduced various measures in recent years, focusing on healthcare and medical-product pricing, in particular. It remains to be seen how these measures will affect our business and there is uncertainty as to what other healthcare programs and regulations may be implemented or changed at the federal and/or state level in the U.S., but, it is possible that such initiatives could have an adverse effect on our ability to obtain approval and/or successfully commercialize products in the U.S. in the future. For example, any changes that reduce, or the ability of healthcare providers to obtain reimbursement for medical procedures in which the products we currently, or intend to, commercialize are used, or that reduce medical procedure volumes, could affect our operations and/or future business plans. The financial impact of U.S. healthcare reform legislation over the next few years will depend on a number of factors, including the policies reflected in implementing regulations and guidance and changes in sales volumes for medical devices affected by the legislation. From time to time, legislation is drafted, introduced and passed in the U.S. Congress that could significantly change the statutory provisions governing coverage, reimbursement, pricing, and marketing of medical device products. In addition, third-party payor coverage and reimbursement policies are often revised or interpreted in ways that may significantly affect our business and our products.
As a smaller reporting company, we are subject to scaled disclosure requirements that may make it more challenging for investors to analyze our results of operations and financial prospects.
Currently, we are a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act. As a “smaller reporting company,” we are able to provide simplified executive compensation disclosures in our filings and have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statements in annual reports. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects.
Furthermore, we are a non-accelerated filer as defined by Rule 12b-2 of the Exchange Act, and, as such, are not required to provide an auditor attestation of management’s assessment of internal control over financial reporting, which is generally required for SEC reporting companies under Section 404(b) of the Sarbanes-Oxley Act. Because we are not required to, and have not, had our auditor’s provide an attestation of our management’s assessment of internal control over financial reporting, a material weakness in internal controls may remain undetected for a longer period.
Global economic uncertainty and financial market volatility caused by political instability, changes in international trade relationships and conflicts could make it more difficult for us to access financing and could adversely affect our business and operations.
Our ability to raise capital is subject to the risk of adverse changes in the market value of our stock. Periods of macroeconomic weakness or recession and heightened market volatility caused by adverse geopolitical developments could increase these risks, potentially resulting in adverse impacts on our ability to raise further capital on favorable terms. The impact of geopolitical tension, such as a deterioration in the bilateral relationship between the U.S. and China or in the ongoing conflicts between Russia and Ukraine, including resulting sanctions, export controls or other restrictive actions that may be imposed by the U.S. and/or other countries against governmental or other entities in, for example, Russia, also could lead to disruption, instability and volatility in global trade patterns, which may in turn impact our ability to source necessary reagents, raw materials and other inputs for our research and development operations. In addition, political developments impacting government spending and international trade, including changes in trade agreements, potential government and trade and tariffs, including tariffs that have been or may in the future be imposed by the United States or other countries and future legislation or actions taken by the United States or other countries that restrict trade, and protectionist or measures taken by the United States or other countries, may impact markets and cause macroeconomic conditions. Any of the abovementioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of any political and resulting market are to predict but could be substantial. Any such may also have the effect of heightening many of the other risks and uncertainties described elsewhere in this “Risk Factors” section.
The U.S. Congress, the Trump administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business.
In 2017, the U.S. Congress and the Trump administration made substantial changes to U.S. policies, which included comprehensive corporate and individual tax reform. In addition, the Trump administration called for significant changes to U.S. trade, healthcare, immigration and government regulatory policy in President Trump’s second term. The transitions between the Trump and Biden presidential terms led to substantial changes in the direction and focus of administrative and regulatory policies. Changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any future administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. Until we know what policy changes are made, whether those policy changes are challenged and subsequently upheld by the court system and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.
The Company has concluded that there are material weaknesses in its internal control over financial reporting, which, if not remediated, could materially adversely affect its ability to timely and accurately report its results of operations and financial condition. The accuracy of the Company ’ s financial reporting depends on the effectiveness of its internal controls over financial reporting.
Internal control over financial reporting can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements and may not prevent or detect misstatements. Failure to maintain effective internal control over financial reporting, or lapses in disclosure controls and procedures, could undermine the Company’s ability to provide accurate financial information on a timely basis, which could cause investors to lose confidence in the Company’s disclosures, require significant resources to remediate the deficiency, and expose the Company to legal or regulatory proceedings.
In the course of performing management’s assessment of internal control over financial reporting as of December 31, 2025, management identified the following material weaknesses: (i) inadequate identification, recording and reporting of stock-based compensation, (ii) ineffective review processes over period-end financial disclosure and reporting, including review of IPE (Information Produced by the Entity), (iii) inadequate segregation of duties for transaction posting and processing, and (iv) ineffective review controls over the accounting for business combinations and related financial instruments.
As a result of these material weaknesses, there was a reasonable possibility that material misstatements in the Company’s financial statements could occur and not be prevented or detected on a timely basis. Accordingly, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025.
The Company’s remediation efforts for these material weaknesses are ongoing. Remediation and strengthening of the internal control environment has required, and is expected to continue to require, substantial effort in 2026. The material weaknesses cannot be considered fully remediated until the applicable controls have operated effectively for a sufficient period of time and management has tested and concluded that these controls are operating as designed. The Company cannot provide assurance that the identified material weaknesses will be fully remediated or that additional material weaknesses will not be identified in the future.
There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected.
The ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002 require us to identify material weaknesses in internal control over financial reporting, which is a process to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with accounting principles generally accepted in the United States. Our management, including our chief executive officer and chief financial officer, does not expect that our internal controls and disclosure controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, in our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that can occur because of simple or . Further, controls can be by individual acts of some persons, by of two or more persons, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will in its stated goals under all potential future conditions. Over time, a control may be because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may . Because of inherent in a cost- control system, due to or may occur and not be detected.
In addition, discovery and disclosure of a material weakness, by definition, could have a material adverse impact on our financial statements. Such an occurrence could discourage certain customers or suppliers from doing business with us and adversely affect how our stock trades. This could in turn negatively affect our ability to access equity markets for capital.
Risks Related to Our Intellectual Property
If we do not obtain protection for our intellectual property rights, our competitors may be able to take advantage of our research and development efforts to develop competing products.
We intend to rely on a combination of patents, trade secrets, and nondisclosure and non-competition agreements to protect our proprietary intellectual property. Our owned patent portfolio now includes 46 issued/allowed utility patents (34 utility patents where the Company is at least one of the applicants). Thirty additional U.S. and foreign utility patent applications are pending covering various aspects of our PURE EP System for recording, measuring, calculating and displaying of electrocardiograms during cardiac ablation procedures (30 U.S. and foreign utility patent applications where either the Company, Mayo, or both is at least one of the applicants). We also have one U.S. patent and one U.S. pending application directed to artificial intelligence (AI). We also have 30 issued worldwide design patents, which cover various features of our display screens and graphical user interface for enhanced visualization of biomedical signals (30 design patents where the Company is at least one of the applicants). Finally, we have licenses to 12 (issued/allowed) patents and 7 additional worldwide utility patent applications from Mayo Foundation for Medical Education and Research that are pending (12 issued/allowed patents and 7 applications where only Mayo is the applicant). These patents and applications are generally directed to electroporation and stimulation.
We plan to file additional patent applications in the U.S. and in other countries as we deem appropriate for our products. Our applications have and will include claims intended to provide market exclusivity for certain commercial aspects of the products, including the methods of production, the methods of usage and the commercial packaging of the products. However, we cannot predict:
the degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to invalidate or otherwise circumvent our patents;
if and when such patents will be issued, and, if granted, whether patents will be challenged and held invalid or unenforceable;
whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications; or
whether we will need to initiate litigation or administrative proceedings which may be costly regardless of outcome.
Furthermore, the issuance of a patent, while presumed valid and enforceable, is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products. Competitors may also be able to design around our patents. Other parties may develop and obtain patent protection for more effective technologies, designs or methods. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or trade secrets by consultants, vendors, former employees and current employees.
Patent rights are territorial, and patent protection extends only to those countries where we have issued patents. Filing, prosecuting and defending patents on our products and product candidates in all countries and jurisdictions throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States. Many countries, however, do not protect intellectual property to the same extent as the U.S. or Europe, and their litigation processes differ. Competitors may successfully challenge or avoid our patents, or manufacture products in countries where we have not applied for patent protection. Changes in the patent laws in the U.S. or other countries may diminish the value of our patent rights. As a result of these and other factors, the scope, validity, enforceability, and commercial value of our patent rights are uncertain and unpredictable.
Indeed, several companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of some countries do not favor the enforcement of patents and other intellectual property rights, which could make it difficult for the Company to stop the infringement, misappropriation or other violation of the Company’s intellectual property rights generally. Proceedings to enforce the Company’s intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of the Company’s business, could put the Company’s patents at risk of being invalidated or interpreted narrowly and the Company’s patent applications at risk of not issuing and could provoke third parties to assert claims against the Company. The Company may not prevail in any lawsuits that it initiates, and the damages or other remedies awarded, if any, may not be commercially meaningful.
The patent positions of medical device companies, including our patent position, involve complex legal and factual questions, and, therefore, the issuance, scope, validity and enforceability of any patent claims that we may obtain cannot be predicted with certainty. Patents, if issued, may be challenged, deemed unenforceable, invalidated, or circumvented. A third-party may submit prior art, or we may become involved in opposition, derivation, reexamination, inter partes review, post-grant review, supplemental examination, or interference proceedings challenging our patent rights or the patent rights of our licensors or development partners. The costs of defending or enforcing our proprietary rights in these proceedings can be substantial, and the outcome can be uncertain. An adverse determination in any such submission or proceeding could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, or reduce our ability to manufacture or commercialize products. Furthermore, if the scope or of protection provided by our patents and patent applications is , it could companies from with us to license, develop or commercialize current or future products. The ownership of our proprietary rights could also be .
Furthermore, our ability to enforce our patent rights depends on our ability to detect infringement. It is difficult to detect infringers who do not advertise the components that are used in their products. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product, particularly in litigation in countries other than the U.S. that do not provide an extensive discovery procedure. Any litigation to enforce or defend our patent rights, if any, even if we were to prevail, could be costly and time-consuming and would divert the attention of our management and key personnel from our business operations. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded if we were to prevail may not be commercially meaningful.
Our success also depends upon the skills, knowledge and experience of our scientific and technical personnel, our consultants and advisors as well as our licensors and contractors. To help protect our proprietary know-how and our inventions for which patents may be unobtainable or difficult to obtain, we rely on trade secret protection and confidentiality agreements. To this end, it is our policy to require all of our employees, consultants, advisors and contractors to enter into agreements which prohibit the disclosure of confidential information and, where applicable, require disclosure and assignment to us of the ideas, developments, discoveries and inventions important to our business. These agreements may not provide adequate protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure or the lawful development by others of such information. If any of our trade secrets, know-how or other proprietary information is disclosed, the value of our trade secrets, know-how and other proprietary rights would be significantly impaired and our business and competitive position would .
Given the fact that we may pose a competitive threat, competitors, especially large and well-capitalized companies that own or control patents relating to electrophysiology recording systems, may successfully challenge our current and planned patent applications, produce similar products or products that do not infringe our future patents, or produce products in countries where we have not applied for patent protection or that do not respect our patents.
If any of these events occurs, or we otherwise lose protection for our trade secrets or proprietary know-how, the value of our intellectual property may be greatly reduced. Patent protection and other intellectual property protection are important to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate.
If we infringe upon the rights of third parties, we could be prevented from selling products and forced to pay damages and defend against litigation.
Our commercial success also depends upon our ability, and the ability of any third party with which we may partner, to develop, manufacture, market and sell our products, if approved, and use our patent-protected technologies without infringing the patents of third parties. We may not have identified all patents, published applications or published literature that affect our business by blocking our ability to commercialize our products, by preventing the patentability of one or more aspects of our products to us or our licensors, or by covering the same or similar technologies that may affect our ability to market our products. For example, we (or the licensor of a product to us) may not have conducted a patent clearance search sufficient to identify potentially obstructing third party patent rights. Moreover, patent applications in the United States are maintained in confidence for up to 18 months after their filing. In some cases, however, patent applications remain confidential in the U.S. Patent and Trademark Office, or the USPTO, for the entire time prior to issuance as a U.S. patent. Patent applications filed in countries outside of the United States are not typically published until at least 18 months from their first filing date. Similarly, publication of discoveries in the scientific or patent literature often lags behind actual discoveries. We cannot be certain that we or our licensors were the first to , or the first to file, patent applications covering our products. We also may not know if our competitors filed patent applications for technology covered by our pending applications or if we were the first to the technology that is the subject of our patent applications. Competitors may have filed patent applications or received patents and may obtain additional patents and proprietary rights that block or compete with our patents.
If our products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may be required to:
obtain licenses, which may not be available on commercially reasonable terms, if at all;
abandon an infringing product candidate;
redesign our product candidates or processes to avoid infringement;
cease usage of the subject matter claimed in the patents held by others;
pay damages; and/or
defend litigation or administrative proceedings which may be costly regardless of outcome, and which could result in a substantial diversion of our financial and management resources.
We may not have sufficient resources to bring these actions to a successful conclusion. Any of these events could substantially harm our earnings, financial condition and operations.
We depend on our collaboration with Mayo Clinic for the research and development of additional advanced features of PURE EP. If this collaboration is not successful, we may not be able to realize the market potential of such features and may not have rights to use any such developed advanced features.
On March 15, 2017, we entered into a know-how license agreement with Mayo Foundation for Medical Education and Research (“Mayo Clinic”), effective December 2, 2016, and as amended whereby we were granted an exclusive license, with the right to sublicense, certain know how and patent applications in the fields of signal processing, physiologic recording, electrophysiology recording, electrophysiology software and autonomics to develop, make and offer for sale. The agreement expires ten years from the effective date. In furtherance of this collaboration, we subsequently entered into four additional agreements whereby we were granted exclusive licenses, with the right to sublicense additional Mayo Clinic patents and know-how. Pursuant to these agreements, Mayo Clinic retains ownership of the licensed intellectual property and any developed intellectual property. Mayo Clinic also retains the right to prosecute and enforce the developed intellectual property. If our agreements with Mayo Clinic terminate, our access to technology and intellectual property licensed to us by Mayo Clinic may be restricted or terminate entirely, which may delay our continued development of such advanced features utilizing the Mayo Clinic’s technology or intellectual property or require us to stop development of those product candidates completely. Additional risks posed by this include:
Mayo Clinic may not properly obtain, maintain, enforce, or defend intellectual property or proprietary rights relating to our advanced features or may use our proprietary information in such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity, and enforceability of our intellectual property;
Mayo Clinic may own or co-own intellectual property covering our advanced features that results from our collaboration with them, and in such cases, we may not have the exclusive right or any right to commercialize such intellectual property or such product candidates or research programs; or
We may be prevented from enforcing or defending any intellectual property that we contribute to or that arises out of the collaboration, if Mayo Clinic refuses to cooperate with such action.
Our collaboration with Mayo Clinic is made subject to the rights of the U.S. government to the extent that the technology covered by the licensed intellectual property was developed under a funding agreement between Mayo Clinic and the U.S. government. Additionally, to the extent there is any conflict between our agreements with Mayo Clinic and applicable laws or regulations, applicable laws and regulations will prevail. Some, and possibly all, of the developed intellectual property rights relating to our advanced features may have been developed in the course of research funded by the U.S. government. As a result, the U.S. government may have certain rights to intellectual property embodied in our current or future products pursuant to the Bayh-Dole Act of 1980. Government rights in certain inventions developed under a government-funded program include a nonexclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose. In addition, the U.S. government has the right to require us, or an assignee or exclusive licensee to such inventions, to grant licenses to any of these inventions to a third party if the U.S. government determines that adequate steps have not been taken to commercialize the , that government action is necessary to meet public health or safety needs, that government action is necessary to meet requirements for public use under federal regulations, or that the right to use or sell such is licensed to an entity within the U.S. and substantially manufactured outside the U.S. without the U.S. government’s prior approval. Additionally, we may be restricted from granting licenses for the right to use or sell our created pursuant to such agreements unless the licensee agrees to additional restrictions (e.g., manufacturing substantially all of the in the U.S.). The U.S. government also has the right to take title to these if we to the to the government and to file an application to register the intellectual property within specified time limits. In addition, the U.S. government may acquire title in any country in which a patent application is not filed within specified time limits. Additionally, certain are subject to transfer restrictions during the term of these agreements and for a period, thereafter, including sales of products or components, transfers to foreign subsidiaries for the purpose of the relevant agreements, and transfers to certain foreign third parties. If any of our intellectual property becomes subject to any of the rights or remedies available to the U.S. government or third parties pursuant to the Bayh-Dole Act of 1980, this could the value of our intellectual property and could affect our business. The U.S. government has not exercised any of these rights or provided us with any notice of its intent to exercise any of these rights with respect to any of the intellectual property licensed to us by Mayo Clinic. We are not aware of any instance in which the U.S. government has ever exercised any such rights with respect to any technologies or other intellectual property developed under funding agreements with the U.S. government.
If we fail to comply with our obligations under our license agreements, we could lose the rights to intellectual property that is important to our business.
Our current license agreements impose on us various development obligations, payment of royalties and fees based on achieving certain milestones as well as other obligations. If we fail to comply with our obligations under these agreements, the licensor may have the right to terminate the license. In addition, if the licensor fails to enforce its intellectual property, the licensed rights may not be adequately maintained. The termination of any license agreements or failure to adequately protect such license agreements could prevent us from commercializing our products or possible future products covered by the licensed intellectual property. Any of these events could materially adversely affect our business, prospects, financial condition and results of operation.
We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
Our employees may have been previously employed at other companies in the industry, including our competitors or potential competitors. Although we are not aware of any claims currently pending against us, we may be subject to claims that these employees or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of the former employers of our employees. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If we fail in such , in addition to paying money , we may intellectual property rights or personnel. A of key personnel or their work product could or prevent our ability to commercialize product(s), which would materially affect our commercial development efforts.
Obtaining and maintaining patent protection depends on compliance with various procedures and other requirements, and our patent protection could be reduced or eliminated in case of non-compliance with these requirements.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to the relevant patent agencies in several stages over the lifetime of the patents and /or applications. The relevant patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent application process. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which the failure to comply with the relevant requirements can result in the abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to use our technologies and know-how which could have a material adverse effect on our business, prospects, financial condition and results of operation.
Risks Related to our Common Stock
The market price for our common stock may fluctuate significantly, which could result in substantial losses by our investors.
The stock market in general, and Nasdaq in particular, as well as biotechnology companies, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of small companies. The market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:
announcements of technological innovations, new products or product enhancements by us or others;
actual or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in our business, operations or prospects;
announcements of significant strategic partnerships, out-licensing, in-licensing, joint ventures, acquisitions or capital commitments by us or our competitors;
conditions or trends in the biotechnology industry;
changes in the economic performance or market valuations of other biotechnology companies;
general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to our performance or financial condition;
purchase or sale of our common stock by stockholders, including executives and directors;
volatility and limitations in trading volumes of our common stock;
changes in our capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of our common stock by stockholders;
our cash position;
announcements and events surrounding financing efforts, including debt and equity securities;
changes in earnings estimates or recommendations by security analysts, if our common stock is covered by analysts;
the addition or departure of key personnel;
disputes and litigation related to intellectual property rights, proprietary rights, and contractual obligations;
changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and
other events or factors, many of which may be out of our control.
These factors and any corresponding price fluctuations may materially and adversely affect the market price of our common stock and result in substantial losses by our investors.
Further, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations in the past. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock.
Price volatility of our common stock might be worse if the trading volume of our common stock is low. In the past, following periods of market volatility, stockholders have often instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and attention of management from our business, even if we are successful. Future sales of our common stock could also reduce the market price of such stock.
Moreover, the liquidity of our common stock is limited, not only in terms of the number of shares that can be bought and sold at a given price, but by delays in the timing of transactions and reduction in security analysts’ and the media’s coverage of us, if any. These factors may result in lower prices for our common stock than might otherwise be obtained and could also result in a larger spread between the bid and ask prices for our common stock. In addition, without a large float, our common stock is less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stock may be more volatile. In the absence of an active public trading market, an investor may be unable to liquidate its investment in our common stock. Trading of a relatively small volume of our common stock may have a greater impact on the trading price of our stock than would be the case if our public float were larger. We cannot predict the prices at which our common stock will trade in the future.
Our common stock is classified as a “penny stock;” the restrictions of the penny stock regulations of the SEC may result in less liquidity for our common stock.
The SEC has adopted regulations which define a “penny stock” to be any equity security that has a market price (as therein defined) of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Unless exempt, the rules require the delivery, prior to any transaction involving a penny stock by a retail customer, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about commissions payable to both the broker/dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The market price for shares of our common stock is currently below $5.00 and we do not satisfy any of the exceptions to the SEC’s definition of penny stock. Accordingly, our common stock is currently classified as a penny stock. As a result of the penny stock restrictions, brokers or potential investors may be reluctant to trade in our securities, which may result in less liquidity for our shares.
Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which could negatively impact the market price and liquidity of our common stock and our ability to access the capital markets.
Our common stock is listed on the Nasdaq Capital Market. If we fail to satisfy the continued listing requirements of Nasdaq, such as the minimum bid price, shareholders’ equity, public float and other requirements, Nasdaq may take steps to delist our common stock. Such a delisting would have a negative effect on the price of our common stock, impair the ability to sell or purchase our common stock when persons wish to do so, and any delisting materially adversely affect our ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all. Delisting from the Nasdaq Capital Market could also have other negative results, including the potential loss of institutional investor interest and fewer business development opportunities. In the event of a , we would attempt to take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, the market price or the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.
Delisting from the Nasdaq Capital Market could negatively impact the Company’s ability to raise additional financing to fund future operations.
If our common stock is delisted and we are not able to list our common stock on another national securities exchange, we expect our securities would be quoted on an over-the-counter market. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our common stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential of confidence by investors, suppliers, customers and employees and fewer business development . For these reasons and others, would affect the liquidity, trading volume and price of our common stock, causing the value of an investment in us to decrease and having an effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital. There can be no assurance that an active trading market for our common stock will develop or be sustained.
Future sales of our common stock in the public market or other financings could cause our stock price to fall.
Sales of a substantial number of shares of our common stock in the public market, the perception that these sales might occur or other financings, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. A substantial majority of the outstanding shares of our common stock are freely tradable without restriction or further registration under the Securities Act unless these shares are owned or purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act. In addition, shares of common stock issuable upon exercise of outstanding options, restricted stock units and shares reserved for future issuance under our incentive stock plan will be eligible for sale in the public market to the extent permitted by applicable vesting requirements and, in some cases, subject to compliance with the requirements of Rule 144. As a result, these shares can be freely sold in the public market upon issuance, subject to restrictions under the securities laws.
If we sell additional equity or debt securities to fund our operations, it may impose restrictions on our business.
In order to raise additional funds to support our operations, we may sell additional equity or debt securities, which may impose restrictive covenants that adversely impact our business. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we are unable to expand our operations or otherwise capitalize on our business opportunities due to such restrictions, our business, financial condition and results of operations could be materially adversely affected.
Our stockholders may experience substantial dilution as a result of the exercise of outstanding options or warrants to purchase shares of our common stock, upon conversion of our Series C preferred stock into shares of our common stock, or upon conversion of our exchangeable shares into shares of our common stock.
As of March 27, 2026, we have outstanding options to purchase 2,921,000 shares of common stock, 6,483,375 restricted stock units and have reserved 18,107,690 shares of our common stock for further issuances pursuant to our 2023 Long-Term Incentive Plan. In addition, as of March 27, 2026, we may be required to issue 423,858 shares of our common stock for issuance upon conversion of outstanding convertible Series C preferred stock which includes accrued dividends as of March 27, 2026, and 1,647,885 shares of our common stock for issuance upon exercise of outstanding warrants. Furthermore, as of March 27, 2026, we had 83,420,765 Exchangeable Shares outstanding that are convertible into the same number of the Company’s common stock. Should all of these shares be issued, you would experience dilution in ownership of our common stock and the price of our common stock will decrease unless the value of our company increases by a corresponding amount.
Our significant stockholders and members of management collectively own a substantial portion of our outstanding voting power, which may limit the ability of other stockholders to influence corporate matters.
As of March 27, 2026, our directors, executive officers, and their respective affiliates beneficially owned, in the aggregate, approximately 24.28% of our outstanding common and exchangeable shares. In addition, certain of these holders possess vested or currently exercisable equity awards, which further increase their ability to influence matters submitted to a vote of stockholders.
As a result of this concentration of ownership, these stockholders, acting individually or collectively, may be able to significantly influence, or effectively control, the outcome of matters requiring stockholder approval, including the election of directors, approval of mergers or other significant corporate transactions, amendments to our organizational documents, and other actions requiring stockholder approval. This concentration of ownership may also discourage, delay, or prevent a change in control of our company, even if such a change in control would be beneficial to other stockholders.
The interests of these significant stockholders may differ from, or conflict with, the interests of other stockholders. For example, these stockholders may have differing investment horizons, tax positions, liquidity preferences, or business relationships that could result in decisions that are not aligned with the interests of other stockholders. As a result, other stockholders may have limited ability to influence the outcome of corporate actions, and the trading price of our securities could be adversely affected.
Delaware law and our Amended and Restated Certificate of Incorporation and By-laws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
Our board of directors is authorized to issue shares of preferred stock in one or more series and to fix the voting powers, preferences and other rights and limitations of the preferred stock. Accordingly, we may issue shares of preferred stock with a preference over our common stock with respect to dividends or distributions on liquidation or dissolution, or that may otherwise adversely affect the voting or other rights of the holders of common stock. Issuances of preferred stock, depending upon the rights, preferences and designations of the preferred stock, may have the effect of delaying, deterring or preventing a change of control, even if that change of control might benefit our stockholders. In addition, we are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless (i) prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; (ii) the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers and (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (iii) on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
Section 203 could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
Risks Related to our Series C Preferred Stock
Our Series C Preferred Stock contains covenants that could limit our financing options and liquidity position, which would limit our ability to grow our business.
Covenants in the certificate of designation for our Series C Preferred Stock impose operating and financial restrictions on us. These restrictions prohibit or limit our ability to, among other things:
incur additional indebtedness;
permit liens on assets;
repay, repurchase or otherwise acquire more than a de minimis number of shares of capital stock;
pay cash dividends to our stockholders; and
engage in transactions with affiliates.
As of March 27, 2026, the Company was in compliance with the operating and financial covenants applicable to the Series C Preferred Stock, including covenants restricting the incurrence of additional indebtedness, the granting of liens on assets, the repurchase or redemption of capital stock beyond permitted amounts, the payment of cash dividends, and the engagement in certain affiliate transactions.
These restrictions may limit our ability to obtain financing, withstand downturns in our business or take advantage of business opportunities. Moreover, debt financing we may seek may contain terms that include more restrictive covenants, may require repayment on an accelerated schedule or may impose other obligations that limit our ability to grow our business, acquire needed assets, or take other actions we might otherwise consider appropriate or desirable.
In addition, the certificate of designation for our Series C Preferred Stock requires us to redeem shares of our Series C Preferred Stock, at each holder’s option and for an amount greater than their stated value, upon the occurrence of certain events, including our being subject to a judgment of greater than $100,000 or our initiation of bankruptcy proceedings.
The holders of our Series C Preferred Stock are entitled to receive a dividend, which may be increased if we do not comply with certain covenants.
The holders of the Series C Preferred Stock are entitled to a 9% annual dividend on the $1,000 per share stated value of our Series C Preferred Stock, which is payable in cash or, subject to the satisfaction of certain conditions, in pay-in-kind shares. The dividend may be increased to a 18% annual dividend if we fail to comply with certain covenants, including our being subject to a judgment of greater than $100,000 or our initiation of bankruptcy proceedings. As a result of the payment of dividends related to our Series C Preferred Stock, we may be obligated to pay significant sums of money or issue a significant number of shares of our common stock, which could negatively affect our operations or result in the dilution of the holders of our common stock, respectively.
The terms of our Series C Preferred Stock contain anti-dilution provisions that may result in the reduction of the conversion prices in the future.
The terms of our Series C Preferred Stock contain anti-dilution provisions, which provisions require the lowering of the conversion price to the purchase price of future offerings. If in the future we issue securities for less than the conversion of our Series C Preferred Stock then in effect, we will be required to further reduce the relevant conversion prices.
The terms of our Series C Preferred Stock prohibit us from paying dividends in the future on our common stock. As a result, any return on investment may be limited to the value of our common stock.
The terms of our Series C Preferred Stock prohibit us from paying dividends in the future on our common stock, absent consent from the holders representing a super-majority of the outstanding shares of our Series C Preferred Stock and a certain investor. Because we will likely not pay dividends, our common stock may be less valuable because a return on an investment in our common stock will only occur if our stock price appreciates.
General Risk Factors
The liability of our directors and officers is limited.
The applicable provisions of the Delaware General Corporation Law and our Amended and Restated Certificate of Incorporation and By-laws limit the liability of our directors to us and our stockholders for monetary damages for breaches of their fiduciary duties, with certain exceptions, and for other specified acts or omissions of such persons. In addition, the applicable provisions of the Delaware General Corporation Law and of our Amended and Restated Certificate of Incorporation and By-laws provide for indemnification of such persons under certain circumstances. In the event we are required to indemnify any of our directors or any other person, our financial strength may be harmed.
Negative publicity or unfavorable media coverage could damage our reputation and harm our operations.
In the event that the marketplace perceives our products as not offering the benefits which we believe they offer, we may receive negative publicity. This publicity may result in litigation and increased regulation and governmental review. If we were to receive such negative publicity or unfavorable media attention, whether warranted or unwarranted, our ability to market our products would be adversely affected. We may be required to change our products and services and become subject to increased regulatory burdens, and we may be required to pay large judgments or fines and incur significant legal expenses. Any combination of these factors could further increase our cost of doing business and adversely affect our financial position, results of operations and cash flows.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We currently do not have new research coverage by securities and industry analysts. If we have coverage in the future and any analyst who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline; or if any analyst ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.
We are subject to financial reporting and other requirements that place significant demands on our resources.
We are subject to reporting and other obligations under the Exchange Act, including the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Section 404 requires us to conduct an annual management assessment of the effectiveness of our internal controls over financial reporting. These reporting and other obligations place significant demands on our management, administrative, operational, internal audit and accounting resources. Any failure to maintain effective internal controls could have a material adverse effect on our business, operating results and stock price. Moreover, effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.
ITEM 1B – UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 1C – CYBERSECURITY
Risk Management and Strategy
We maintain a cybersecurity risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats to the information systems we own or use. Our information systems are predominantly cloud-based and delivered as software-as-a-service, and we rely on third-party providers for system availability, security, and data backup. Our cybersecurity program is supported by an outsourced information technology service provider, which manages user account administration, security monitoring, and general IT maintenance, in coordination with senior management.
Cybersecurity risk considerations are addressed through management’s oversight of information technology operations and periodic risk assessment activities. Cybersecurity risk assessments are performed at least annually, often in connection with renewing the Company’s cybersecurity insurance coverage and may be discussed with the Board of Directors as circumstances warrant.
Processes for Assessing, Identifying, and Managing Material Cybersecurity Risks and Incidents
Our cybersecurity program includes processes designed to assess, identify , and manage cybersecurity events, including events that could be material. These processes include: (i) monitoring and detection activities using a combination of manual oversight and automated tools and third-party services; (ii) procedures to assess the nature, scope, and potential impact of identified events; (iii) escalation protocols to communicate relevant matters to senior management and, as appropriate, the Board of Directors; and (iv) incident response procedures intended to support containment, eradication, recovery, and communications to appropriate stakeholders. The Company maintains an incident response plan as part of its overall IT policies and conducts periodic testing of its incident response processes through activities such as simulated phishing exercises and tabletop-style testing.
In connection with incident escalation, if management determines that a cybersecurity incident is material, the incident would be escalated to executive management and the Board and, if required, the Company would make timely public disclosure in accordance with applicable regulatory requirements and the Company’s disclosure policies.
Integration with Overall Risk Management
Cybersecurity risk management is integrated into the Company’s overall risk management activities through management’s ongoing oversight of IT operations, periodic cybersecurity risk assessments (including those performed in connection with cybersecurity insurance renewals), and consideration of cybersecurity risks in connection with changes in the Company’s operating environment and reliance on third-party systems.
Use of Third Parties and Third-Party Risk Management
We use third-party service providers to support key functions, including cloud-based enterprise systems and other hosted platforms used in our operations. We perform due diligence in selecting critical service providers and review available SOC reports or other security attestations where applicable. While we have not implemented a formal third-party IT vendor risk management framework, management relies on contractual commitments, available third-party attestations, and oversight by our outsourced IT service provider to help identify and manage cybersecurity risks associated with these providers.
Governance — Board Oversight
The Board of Directors provides oversight of cybersecurity risk as part of its broader risk oversight responsibilities . The Board has not designated a separate committee or subcommittee specifically responsible for cybersecurity oversight. Management may provide updates to the Board regarding cybersecurity risk assessments, significant cybersecurity risk areas, and incident matters as circumstances warrant, including following significant incidents or material changes in the Company’s risk profile.
Management’s Role and Relevant Expertise
Senior management is responsible for oversight of the Company’s cybersecurity risk management program and coordination with third-party service providers supporting information technology and cybersecurity functions. The Chief Administrative Officer supports cybersecurity oversight through administration of key IT-related processes, including coordinating access provisioning requests and employee onboarding acknowledgements of cybersecurity and acceptable use policies, and working with the outsourced IT service provider and senior management on security-related matters.
Material Impacts of Cybersecurity Risks and Incidents
The Company has not identified any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, the Company’s business strategy, results of operations, or financial condition.
ITEM 2 – PROPERTIES
We maintain our principal executive office at 2431 Aloma Avenue Suite 243, Winter Park, Florida 32792, consisting of office space used for corporate administration and operations (approximately 3,000 square feet, leased on a month-to-month basis) and believe that our current facilities are sufficient for our current needs.
ITEM 3 – LEGAL PROCEEDINGS
In November 2025, Richard Coglon filed a Notice of Civil Claim in the Supreme Court of British Columbia against the Company, its wholly owned subsidiary Streamex Exchange, and certain current officers and directors. The complaint alleges, among other things, breach of contract, inducing breach of contract, unjust enrichment, and civil conspiracy in connection with alleged oral and implied agreements relating to equity interests in Streamex Exchange prior to the Company’s acquisition of Streamex Exchange.
The plaintiff seeks, among other relief, specific performance, equitable compensation, damages, and the imposition of a constructive trust. The Company disputes the claims and intends to defend the matter vigorously. As of December 31, 2025, no liability has been recorded in the consolidated financial statements related to this matter, as management, after consultation with legal counsel, believes that a loss is not probable. The matter is in a preliminary stage and, as a result, the Company is unable to reasonably estimate the possible loss or range of loss, if any, associated with this matter at this time.
We may be subject at times to other legal proceedings and claims, which arise in the ordinary course of our business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.
There are no material proceedings in which any of our directors, officers or affiliates or any registered or beneficial shareholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest.
ITEM 4 – MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5 – MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market for Common Stock
Our common stock is listed on the Nasdaq Capital Market under the symbol “STEX” (effective September 2025, following our name change to Streamex Corp.). Prior to that, our common stock traded under the symbol “BSGM” on the Nasdaq Capital Market.
Holders of Record
As of March 27, 2026, there were approximately 336 holders of our common stock, as determined by counting our record holders and the number of participants reflected in a security position listing provided to us by the Depository Trust Company. Because the “DTC participants” are brokers and other institutions holding shares of our common stock on behalf of their customers, we do not know the actual number of unique shareholders represented by these record holders.
Dividends
We have never paid cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future but intend to retain our capital resources for reinvestment in our business.
Issuer Purchases of Equity Securities
None.
Recent Sale of Unregistered Equity Securities
During the year ended December 31, 2025, we did not issue or sell any unregistered securities, except as previously reported in a Current Report on Form 8-K or a Quarterly Report on Form 10-Q.
ITEM 6 – RESERVED
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management ’ s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management ’ s current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “ may, ” “ will, ” “ expect, ” “ anticipate, ” “ believe, ” “ estimate ” and “ continue, ” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. For a discussion of risks that could cause actual results to differ materially, see “Item 1A. Risk Factors” and “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in this Annual Report.
Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for materials, and competition.
Business Overview
On May 28, 2025, the Company completed its acquisition of Streamex Exchange Corporation (“Streamex Exchange”). The consolidated financial statements for the year ended December 31, 2025 include the results of the Company and its consolidated subsidiaries, including Streamex Exchange, from the acquisition date.
As a result of this acquisition, the Company expanded beyond its historical focus as a medical device technology company to a diversified technology platform centered on tokenized finance and the digitization of real-world assets (“RWAs”). Through Streamex Exchange, the Company has developed and operates institutional grade technology platform that supports the tokenization of real-world assets, including gold, and other physical commodity asset interests. The Company operates as an infrastructure provider, enabling the issuance, trading, and backend infrastructure for digital tokens backed by tangible commodities, beginning with gold. The Company continues to operate its legacy medical device technology business, which focuses on healthcare technology innovation through the Company’s PURE EP™ Platform (“PURE EP™”).
The Company continues to evaluate strategic alternatives for its legacy majority-owned subsidiaries ViralClear Pharmaceuticals, Inc. (“ViralClear”) and BioSig AI Sciences, Inc. (“BioSig AI”). ViralClear’s business is currently dormant and ViralClear’s business objectives are being evaluated. BioSig AI’s business operations have currently been placed on hold.
Historically, the Company developed and commercialized advanced digital signal processing solutions for electrophysiology. PURE EP™ is designed to deliver real-time, high-fidelity cardiac signal data to electrophysiologists during ablation procedures for the treatment of cardiovascular arrhythmias. In recent periods, the Company has shifted its biomedical strategy toward research and development of proprietary software algorithms intended to enhance clinical decision-making and procedural outcomes.
Streamex Exchange has developed and operates a blockchain-based platform designed to facilitate the compliant tokenization and exchange of RWAs. As of December 31, 2025, Streamex Exchange remained in the development stage and had not generated revenue. Subsequent to year end, in 2026, the Company launched GLDY and began actively accepting subscriptions. Future revenue generation will depend on platform maturity, regulatory developments, market conditions, adoption and issuance volumes, and the Company’s ability to monetize GLDY and additional tokenized products through fee-based services.
For the year ended December 31, 2025, the Company operated as a single reportable segment.
Results of Operations (000 ’ s)
We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, such as the progress of our research and development and commercialization efforts, the timing and outcome of future regulatory submissions, and other macroeconomic and operational uncertainties. Due to these uncertainties, accurate predictions of future operations are difficult or impossible to make.
Year Ended December 31, 2025 Compared to Year December 31, 2024
The following table and narrative sets forth for the periods indicated certain items of our results of operations, expressed in thousands of dollars. The financial information and the discussion below should be read in conjunction with the financial statements and notes contained in this Annual Report on Form 10-K.
Revenues . Revenue for the years ended December 31, 2025 and 2024 was $0 and $40, respectively, and consisted of recognized service revenue. Historically, the Company’s revenue has been generated from sales of the PURE EP™ Platform and related support services; however, commercial activity was not significant in 2024 and did not recur in 2025.
Research and Development Expenses . Research and development expenses for the year ended December 31, 2025 were $31 a decrease of $801, or 96%, from $832 for the year ended December 31, 2024. The decrease primarily reflects lower internal personnel-related costs and reduced external research, clinical, and design spending during 2025 as the Company focused resources on strategic transaction and integration activities. Management expects research and development activity to increase in future periods as resources are reallocated to planned initiatives.
Research and development expenses were comprised of the following:
December 31, 2025
December 31, 2024
Salaries and equity compensation
Consulting expenses
Research and clinical studies and design work
Regulatory
Travel, supplies, other
Total
General and Administrative Expenses. General and administrative expenses consist primarily of compensation and benefits (including stock-based compensation), professional fees (including audit, accounting, legal, and consulting), insurance, director fees, rent and facilities, travel, investor relations, and other general corporate costs. General and administrative expenses for the year ended December 31, 2025 were $67.5 million, an increase of $55.9 million, or 481%, from $11.6 million incurred during the year ended December 31, 2024.
The increase was primarily driven by non-cash stock-based compensation expense recognized during 2025 of approximately $57.1 million compared to $7.0 million in 2024. The 2025 stock-based compensation expense included approximately $52.3 million related to shares and equity awards issued to employees, officers, directors, consultants, and other service providers. As part of the Streamex Exchange acquisition, in December 2025 we issued an aggregate of 824,052 shares of common stock to two third-party advisors as finder’s fees, with a total fair value of approximately $4.8 million, which was included in stock-based compensation expense for 2025.
The year-over-year increase in stock-based compensation expense was attributable to both a significantly higher volume of equity awards issued during 2025 and a higher fair value per shares at the time of issuance compared to 2024, which resulted in higher grant-date fair values recognized as expense.
Excluding the impact of stock-based compensation, general and administrative expenses increased year-over-year primarily due to higher professional fees and other public company costs associated with the Streamex Exchange acquisition and integration activities, including transaction-related legal, accounting, and advisory services.
Impairment of Long Term Assets. For the year ended December 31, 2025, the Company performed a qualitative assessment of its long-lived assets to evaluate whether events or changes in circumstances existed that would indicate that the carrying amounts of such assets may not be recoverable. Based on the combined effect of this indicator analysis, management concluded that no impairment indicators were present and, accordingly, that an impairment test was not required for the year ended December 31, 2025. During the year ended December 31, 2024, the Company re-assessed its carrying amounts of certain property and equipment due to reduced manufacturing of its commercial products and determined that these carrying amounts exceeded the estimated undiscounted future cash flows. Accordingly, the Company recorded a $253 impairment charge to current operations.
Depreciation and Amortization Expense. Depreciation and amortization expense for the year ended December 31, 2025 totaled $3.5 million, an increase of $3.3 million, or 1780%, over the expense of $188 incurred in the year ended December 31, 2024. The increase was primarily attributable to amortization of identifiable intangible assets recognized in connection with the Streamex Exchange acquisition.
Other Income (Expense), Net. Other income (expense), net for the year ended December 31, 2025 totaled $(392.9) million, a decrease in other income of $395.4 million, from $2.5 million of other income in the year ended December 31, 2024. The change was driven primarily by a non-cash loss of $389.7 million from the change in fair value of a derivative liability associated with Exchangeable Shares prior to their reclassification to equity on November 4, 2025. The year-over-year change also reflects a loss on warrant settlement of $8.0 million, a loss from changes in fair value of marketable securities of $0.8 million, and higher net interest expense of $1.6 million, partially offset by a non-cash gain of $7.0 million from changes in fair value of embedded derivative liabilities associated with the YA II PN, Ltd. (“Yorkville”) secured convertible debentures. In 2024, results included a gain on negotiated settlements of liabilities with vendors, which was significantly lower in 2025.
Preferred Stock Dividend . Preferred stock dividend for the years ended December 31, 2025 and 2024 totaled $11 and $9, respectively. Preferred stock dividends are related to the dividends accrued on our Series C Preferred Stock issued during the period from 2013 through 2015. In addition, the Series C Preferred stock conversion rate reset from $2.50 to $0.3197 during the year ended December 31, 2024, and therefore we recorded a noncash deemed preferred stock dividend of $174 in the prior year.
Income taxes (benefit). For the year ended December 31, 2025, the Company recorded an income tax benefit of $1.3 million, compared to $0 in the prior-year. The benefit primarily reflects a decrease in the deferred tax liability recorded in connection with the Streamex Exchange acquisition. As of December 31, 2025, a deferred tax liability of $11.4 million remained recorded on the Consolidated Balance Sheets. No comparable benefit was recorded in 2024 as the acquisition and related deferred tax effects did not exist.
Net Loss Attributable to Streamex Corp. Common Stockholders . As a result of the foregoing, net loss attributable to Streamex Corp. common stockholders for the year ended December 31, 2025 was $462.8 million, compared to a net loss of $10.5 million for the year ended December 31, 2024, after giving effect to amounts attributable to non-controlling interests. The change was driven primarily by a non-cash loss of $389.7 million from the change in fair value of a derivative liability associated with Exchangeable Shares prior to their reclassification to equity on November 4, 2025 and an increase in non-cash stock-based compensation and common stock issued for services charges totaling approximately $57.1 million, which were concentrated in the fourth quarter of 2025.
Liquidity and Capital Resources
As of December 31, 2025, we had working capital of approximately $29.1 million and cash of $20.3 million. For the year ended December 31, 2025, we used $10.4 million in operating activities, used $24.3 million in investing activities, and provided $54.9 million from financing activities, primarily from equity offerings and secured convertible debenture issuances, net of issuance costs.
We expect to continue incurring operating losses and negative cash flows until our products, including the Streamex Exchange’s digital asset infrastructure and PURE EP™ Platform initiatives, achieve sustained commercial success. Although the PURE EP™ Platform is commercially available, revenues to date have not been material, and the timing and extent of future revenues remain uncertain. Subsequent to year end, the Company launched GLDY and began accepting subscriptions; however, revenues to date have not been material. We expect to incur additional costs related to software development, regulatory compliance, and strategic partnerships prior to the commencement of any material revenue-generating activities. The timing and extent of any future revenues will depend on, among other things, continued investor adoption of GLDY, completion of development milestones, regulatory considerations, market conditions, and the successful commercialization of the Streamex Exchange platform and related offerings.
Subsequent to year end, the Company strengthened its liquidity position through financing transactions and asset monetization activities and eliminated its outstanding secured debt. In January 2026, the Company completed an underwritten public offering generating net proceeds of approximately $37.2 million. The Company also received approximately $10.1 million from the sale of marketable securities and approximately $26.4 million from the sale of restricted gold assets previously classified as held for sale. In February 2026, following a partial conversion of the secured convertible debentures, the Company repaid the remaining outstanding balance for an aggregate cash payment of approximately $38.9 million, and all related security interests were released. Based on our existing cash, together with proceeds received subsequent to year end, we believe we will have sufficient liquidity to meet our anticipated working capital requirements, capital expenditures, and other liquidity needs for at least the next twelve months from the issuance date of the consolidated financial statements included in this Annual Report on Form 10-K.
Capital Strategy and Uses of Cash
Our capital strategy focuses on maintaining sufficient liquidity to support ongoing operations, product development, and strategic initiatives, while preserving balance sheet flexibility. We may evaluate additional capital sources from time to time, including:
Public or private equity offerings
Strategic partnerships or licensing arrangements
Government grants or non-dilutive funding
Debt financing, where feasible
While we previously implemented cost-saving measures to reduce cash burn, we have increased spending to accelerate development of the Streamex Exchange platform and related initiatives. These efforts are intended to support long-term growth but will increase near-term cash requirements. There can be no assurance that any future financing, if pursued, would be available on acceptable terms.
Future financing may include the issuance of equity or debt securities, credit facilities, or other arrangements. Any such financing could result in dilution to existing stockholders or the issuance of securities with rights senior to those of our common stock. Market volatility and macroeconomic conditions may also adversely affect our ability to raise capital on acceptable terms. These financing arrangements are part of management’s broader strategy to address liquidity needs and support commercialization, research and development, and infrastructure expansion. However, there can be no assurance that financing will be available on acceptable terms, or at all.
If additional capital were required and not obtained on acceptable terms, we may be required to delay or reduce certain research and development programs, scale back commercialization efforts, or enter into strategic arrangements that could require us to relinquish rights to certain technologies or products.
Our liquidity forecast includes assumptions regarding the timing of Streamex Exchange’s development and commercialization activities, planned expenditures, and cost containment measures.
Financing Activities
Yorkville Secured Convertible Debentures and Liquidity Actions
During 2025, we completed two closings under our secured convertible debenture financing with Yorkville, issuing an aggregate principal amount of $50.0 million in two tranches. Subsequent to year end, we implemented a liquidity plan to eliminate this secured debt, including (i) an underwritten public offering completed in January 2026 that generated $40.25 million of gross proceeds (before underwriting discounts and offering expenses) and (ii) the February 2026 settlement of the Yorkville debentures, which included a partial conversion and a cash payoff of the remaining amounts.
On January 22, 2026, we delivered an irrevocable optional prepayment notice to Yorkville. On February 6, 2026, Yorkville converted $15.0 million of principal at $4.00 per share, resulting in the issuance of 3,750,000 shares, and we paid an aggregate cash amount of $38.9 million to settle the remaining obligations (comprised of $35.0 million principal, $3.5 million prepayment premium, and approximately $403 of accrued interest), after which the related security interests were released.
We also entered into a standby equity purchase agreement (“SEPA”) with Yorkville that provided the Company with the right, but not the obligation, to sell shares of common stock during the commitment period. We terminated the SEPA effective January 29, 2026, and did not sell any shares under the SEPA.
The Yorkville financing and the subsequent settlement affected our liquidity and results of operations primarily through (i) cash proceeds and cash uses related to issuance and settlement, (ii) interest expense (including non-cash amortization of discounts and issuance costs), and (iii) non-cash income statement volatility from fair value accounting for embedded derivative features, each as discussed in the notes to the consolidated financial statements.
Warrant repurchases for cash upon Fundamental Transaction elections
Certain of our outstanding common stock purchase warrants contained provisions that, upon the occurrence of a board-approved “Fundamental Transaction” (as defined in the applicable warrant agreements), provided holders with the right to require cash settlement based on the warrants’ Black-Scholes value. In connection with the Streamex Exchange transaction, holders of the affected warrants elected cash settlement, and the Company repurchased warrants for cash during the fourth quarter of 2025. These cash payments in the aggregate of approximately $8.0 million reduced liquidity during the period and are reflected in our consolidated statements of cash flows.
Equity Financing
On March 5, 2025, we entered into a securities purchase agreement with certain accredited investors (the “Investors”), pursuant to which we sold an aggregate of 758,514 shares of our common stock and warrants to purchase up to an aggregate of 758,514 shares of our common stock. The shares of common stock were sold at a purchase price of $1.07974 per share and the warrants have an exercise price of $0.95474 per share. The warrants became exercisable six months after the date of issuance and will expire three and one-half years following the date of issuance. Aggregate gross proceeds from the offering were $818.
August 2025 Public Offering
On August 15, 2025, the Company completed a public offering of 3,852,149 shares of its common stock at a public offering price of $3.90 per share, generating gross proceeds of approximately $15.0 million before deducting underwriting discounts, commissions, and estimated offering expenses. Net proceeds from the offering were approximately $13.62 million.
ATM Sales Agreement
For the year ended December 31, 2025, we sold 4,403,166 shares pursuant to the Sales Agreement at an average offering price of $0.91 per share for aggregate gross proceeds of $4.0 million, or $3.9 million after deducting fees equal to $136.
January 2026 Underwritten Offering
On January 26, 2026, the Company closed an underwritten public offering of 11,666,667 shares of its common stock at $3.00 per share. On January 27, 2026, the underwriters fully exercised their over-allotment option to purchase an additional 1,750,000 shares at the public offering price, less underwriting discounts and commissions. Aggregate gross proceeds to the Company from the offering (including the over-allotment option), before deducting underwriting discounts and commissions and other estimated offering expenses, were $40.25 million.
Future Capital Requirements and Risks
We expect to continue incurring expenses related to:
Expansion of business infrastructure and public company compliance
Integration and scaling of Streamex Exchange’s tokenization platform and digital asset infrastructure
Development of real-world asset (RWA) tokenization solutions, including commodities-on-chain initiatives
Our future capital requirements will depend on several factors, including:
Progress and results of our R&D programs
Timing and outcome of regulatory approvals
Costs associated with intellectual property protection
Market acceptance and commercialization success
Availability of financing and strategic partnerships
Execution of Streamex Exchange’s growth strategy within the global commodities and digital asset markets
Infrastructure and personnel investments required to support Streamex Exchange’s platform scalability and compliance
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. These estimates are based on historical experience, current conditions, and other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates, and such differences could have a significant impact on our financial condition or results of operations.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our consolidated financial statements that require estimation but are not deemed critical, as defined above.
As of December 31, 2025, the following accounting estimates are considered critical:
Purchase Price Allocation (PPA) for Streamex Exchange Acquisition
Nature of Estimate: The allocation of purchase consideration to identifiable assets and liabilities involves significant judgment, particularly for intangible assets and goodwill.
Methodology: We applied Level 3 valuation techniques under ASC 805, including the relief-from-royalty method for trade name, multi-period excess earnings method for developed technology. Other identifiable intangible assets were valued using cost-based approaches where appropriate.
Estimation Uncertainty: These valuations rely on unobservable inputs such as royalty rates (1%), discount rates (40%), revenue average growth rate of 53% through fiscal year 2030 and 3% thereafter, and projected cash flows.
Historical Accuracy and Changes: The PPA remains preliminary as of December 31, 2025. The purchase price allocation is preliminary primarily because the Company has not yet finalized the valuation of certain identifiable intangible assets and the related deferred income tax effects, which could result in changes to the amounts assigned to intangible assets, deferred tax liabilities, and goodwill during the measurement period.
Drivers of Variability: Finalization of financial forecasts, market comparables, and tax amortization benefits may materially affect the allocation.
Future Sensitivity: Adjustments to intangible asset values or recognition of contingent liabilities could materially impact goodwill and amortization expense.
ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
