Risk Factors Dashboard

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You should consider each of the following risk factors and any other information set forth in this Annual Report and the other reports filed by the Company with the SEC, including the Company’s financial statements and related notes, in evaluating the Company’s business and prospects. The risks and uncertainties described below are not the only ones that impact on the Company’s operations and business. Additional risks and uncertainties not presently known to the Company, or that the Company currently considers immaterial, may also impair its business or operations. If any of the following risks actually occurs, the Company’s business and financial condition, results or prospects could be harmed. Please also read carefully the section entitled “Cautionary Note About Forward-Looking Statements” at the beginning of this Annual Report.

Risks Related to Our Company

We have an evolving business model, which increases the complexity of our business.

Our business model has evolved in the past and continues to do so. In prior years we have added, modified and/or discontinued various services and product offerings. As discussed elsewhere in this Annual Report, we are expanding into decentralized finance (DeFi) services, which are services that we do not have any prior experience providing. We intend to continue to try to offer new products or services, and we do not know whether any of them will be successful. The additions and modifications to our business have increased the complexity of our business and placed significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. Future additions to or modifications of our business are likely to have similar effects. Further, any new business or applications we launch that is not favorably received by the market could damage our reputation or our brand. The occurrence of any of the foregoing could have a material adverse effect on our business.

We are heavily dependent on our senior management, and a loss of a member of our senior management team could cause our stock price to suffer.

If we lose the services of Harvey Grossblatt, our President and Chief Executive Officer or Milton C. Ault, III, our Executive Vice Chairman, and/or certain key employees, we may not be able to find appropriate replacements on a timely basis, and our business could be adversely affected. Our existing operations and continued future development depend to a significant extent upon the performance and active participation of these individuals and certain key employees. Although we have entered into an employment agreement with Mr. Grossblatt, and we may enter into employment agreements with additional key employees in the future, we cannot guarantee that we will be successful in retaining the services of these individuals. If we were to lose any of these individuals, we may not be able to find appropriate replacements on a timely basis and our financial condition and results of operations could be materially adversely affected.

We rely on highly skilled personnel and the continuing efforts of our executive officers and, if we are unable to retain, motivate or hire qualified personnel, our business may be severely disrupted.

Our performance largely depends on the talents, knowledge, skills, know-how and efforts of highly skilled individuals and in particular, the expertise held by our Executive Vice Chairman, Milton C. Ault, III. In particular, we are relying upon Mr. Ault’s knowledge and expertise in the DeFi industry, as we look to pivot and expand our operations and services into that space. His absence, were it to occur, would materially and adversely impact the development and implementation of our projects and businesses. Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly skilled personnel for all areas of our organization. Our continued ability to compete effectively depends on our ability to attract, among others, new technology developers and to retain and motivate our existing contractors. If one or more of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Therefore, our business may be severely disrupted, and we may incur additional expenses to recruit and retain new officers. In addition, if any of our executives joins a competitor or forms a competing company, we may lose some customers.

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Risks Related to Universal DeFi

Risks Related to Universal DeFi – General

Universal DeFi has a limited operating history, which makes it difficult to evaluate its business and prospects.

Universal DeFi was formed in July 2025 and has a limited operating history. Its tokenization platform has not commenced operations, and although its node and validator operations on the Ault Blockchain have commenced, the digital tokens those operations receive do not currently have a market value. As a result, there is limited information on which to evaluate its business, and its prospects must be considered in light of the risks and uncertainties encountered by early-stage companies in new and rapidly evolving markets.

Universal DeFi will require substantial additional capital, which may not be available when needed.

The development of Universal DeFi’s tokenization platform and the operation and expansion of its node and validator activities are expected to require substantial capital. Universal DeFi does not currently generate cash revenue and expects to depend on outside funding to support its operations for the foreseeable future. There can be no assurance that additional capital will be available when needed on acceptable terms or at all. If Universal DeFi is unable to obtain adequate funding, it may be required to delay, reduce, or abandon the development of its tokenization platform or the operation of its business, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Universal DeFi has limited personnel and must build the operational, compliance, and information security functions necessary to operate its business.

To launch its tokenization platform and operate its business, Universal DeFi must develop and maintain operational, compliance, risk management, and information security functions appropriate for a business that performs issuer onboarding, handles tokenized assets, and operates blockchain infrastructure. Universal DeFi is in the early stages of building these functions and currently relies in part on the Company and its affiliates. If Universal DeFi is unable to recruit and retain qualified personnel, to build and maintain these functions, or to manage the demands of growth, it may be unable to launch or operate its business as planned, may fail to meet regulatory or security requirements, and may be exposed to operational failures or security incidents. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi’s planned services and business model may change materially before it commences full operations.

Universal DeFi’s business plan is at an early stage, and the descriptions of its planned services in this report reflect its current intentions rather than established operations. The services Universal DeFi ultimately offers, the markets in which it operates, and the manner in which it generates revenue may differ materially from its current plans in response to market conditions, regulatory developments, technological changes, or strategic decisions by management. If Universal DeFi modifies its business plan in ways that prove unsuccessful or that subject it to unanticipated costs or obligations, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Risks Related to the Tokenization Business

Universal DeFi’s tokenization platform is not yet operational and may never launch or achieve market acceptance.

Universal DeFi’s tokenization platform, which is being developed to represent ownership of real-world or financial assets as digital tokens recorded on a blockchain remains in development and has not launched. Completing and launching the platform will depend on factors including the performance of third-party developers and service providers, the resolution of technical and operational challenges, and the availability of funding.

Even if the platform launches, there can be no assurance that issuers will choose to tokenize assets through it or that the platform will achieve market acceptance. If Universal DeFi fails to launch the platform, experiences significant delays, or launches a platform that does not attract issuers, the Company’s investment in Universal DeFi may be impaired, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

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The market for tokenized assets is new and unproven and may not develop as Universal DeFi expects.

The tokenization of real-world and financial assets is a new and rapidly evolving activity, and a large and sustainable market for tokenized assets may not develop. Demand for Universal DeFi’s tokenization services will depend on factors outside its control, including the willingness of asset owners to tokenize assets, the development of supporting market infrastructure such as trading venues and custodians, investor demand for tokenized assets, and the evolution of the regulatory environment. If the market for tokenized assets does not develop, develops more slowly than expected, or develops in ways that do not favor Universal DeFi’s services, Universal DeFi may be unable to attract issuers or generate revenue, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Universal DeFi faces competition in tokenization services, including from larger and better-resourced providers.

The market for tokenization services is attracting a range of participants, including technology companies, financial institutions, and other blockchain-based ventures, some of which have greater financial, technical, and marketing resources, more established relationships, and longer operating histories than Universal DeFi. Competitors may offer services that are more advanced, less costly, more widely supported, or better aligned with regulatory requirements. There can be no assurance that Universal DeFi will be able to compete effectively. If Universal DeFi is unable to attract and retain issuers in the face of competition, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Universal DeFi’s issuer onboarding occurs before issuance and is not ongoing, and it may not detect issuer misconduct or asset problems that arise after issuance.

Before an asset is tokenized, Universal DeFi intends to conduct an onboarding process designed to verify the identity of the issuer, screen the issuer for illicit activity, and confirm the issuer’s ownership of the asset to be tokenized. This onboarding is performed at a point in time before issuance of the token and is not a continuing assessment, and Universal DeFi does not intend to guarantee, insure, or vouch for the ongoing performance, value, or legitimacy of any tokenized asset after issuance. Because the onboarding review is not ongoing, Universal DeFi may not detect issuer misconduct, the loss or impairment of an underlying asset, the issuance of tokens not backed by the represented asset, or other problems that arise after an asset has been tokenized. An issuer that passes onboarding may subsequently act in ways that harm token holders without Universal DeFi’s knowledge and outside its control. Problems with assets tokenized through the platform could result in claims against Universal DeFi, regulatory scrutiny, and reputational harm, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.

Under the platform’s design, issuers control their own tokens after issuance, and the loss or compromise of an issuer’s approvals may permanently impair control of a token, which Universal DeFi may be unable to remedy.

The platform is being designed to secure control of each token using multi-party computation (a method of securing a digital asset in which the authority to approve a transaction is divided among multiple parties or systems so that no single participant can act alone). Under the platform’s intended standard model, the issuer controls its own token and holds the approvals necessary to authorize transactions affecting it, and Universal DeFi does not hold approvals sufficient to control a token after issuance. Control of a token therefore depends on the issuer safeguarding its approvals. The loss, theft, or compromise of an issuer’s approvals may impair or permanently eliminate the ability to control the affected token, including the ability to create or remove tokens from circulation. Because Universal DeFi does not hold sufficient approvals under its standard model, it may be unable to assist an issuer that loses control of its approvals, and any disaster recovery measures may not restore access in all circumstances. Loss of control of tokens issued through the platform could result in disputes, claims against Universal DeFi, and reputational harm, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi’s association with assets tokenized through its platform could expose it to reputational harm and claims if those assets prove fraudulent, unbacked, or impaired.

Universal DeFi provides the technology and onboarding services used to tokenize assets, but it does not act as the issuer of tokenized assets, take ownership of underlying assets, or guarantee their value or legitimacy. Notwithstanding this, Universal DeFi may be associated, in the view of investors, counterparties, or regulators, with the assets tokenized through its platform. If assets tokenized through the platform prove to be fraudulent, unbacked, impaired, or otherwise problematic, Universal DeFi could suffer reputational harm, lose the confidence of issuers and other participants, and become the subject of claims or regulatory scrutiny, even where it did

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not cause and could not have prevented the problem. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

If Universal DeFi elects to administer token environments on behalf of issuers, its responsibilities and risk profile would change materially.

Universal DeFi is evaluating whether to offer administration of a token project’s environment on behalf of an issuer that engages it to do so. No determination has been made to offer this service. Under Universal DeFi’s intended standard model, the issuer controls its own environment and holds the approvals necessary to authorize transactions affecting its token. If Universal DeFi elects to administer environments on behalf of issuers, it would hold or control approvals capable of authorizing transactions affecting issuer tokens. This would expose Universal DeFi directly to the risk of loss, theft, or compromise of those approvals, to potential liability for unauthorized or erroneous transactions, and to the operational burden of safeguarding control of multiple issuers’ tokens. Holding such control could also cause Universal DeFi to be characterized as providing custodial or other regulated services, subjecting it to requirements it does not currently satisfy. If Universal DeFi offers environment administration and is unable to manage the associated security and regulatory risks, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Risks Related to Node and Validator Operations and Digital Assets

Universal DeFi’s node and validator operations, and its tokenization platform, depend on the Ault Blockchain, a new network developed by an affiliated organization that may not achieve adoption or operate as intended.

Universal DeFi’s node and validator operations are conducted on the Ault Blockchain, and its tokenization platform is being built initially to issue tokens on that network. The Ault Blockchain is a new blockchain network developed by Ault DAO, and its success depends on achieving adoption by users, applications, and other participants. Universal DeFi does not control the development, operation, security, or governance of the Ault Blockchain. If the Ault Blockchain fails to launch fully, fails to achieve or sustain adoption, experiences a decline in activity, or is discontinued, the value of the tokens Universal DeFi earns could decline or disappear, demand for its node and validator services could fall, and its tokenization platform could be impaired. Because both of Universal DeFi’s lines of business depend on this single network, Universal DeFi has concentrated exposure to the network’s success. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

The digital tokens Universal DeFi earns from its node and validator operations have no current market value, are non-cash and illiquid, and may never have value.

The rewards Universal DeFi earns from its node and validator operations are paid in the Ault Blockchain’s native digital token. That token does not currently have a market value, and there can be no assurance that a market for it will develop or that it will have any value in the future. These tokens are a non-cash, illiquid asset. The value of these tokens, if any, will depend on the development, adoption, and activity of the Ault Blockchain and on the existence of a market in which the tokens can be sold, none of which is assured. Universal DeFi may be unable to convert the tokens into cash, may be subject to restrictions on transferring them, and may never realize any value from them. Digital asset prices, where markets exist, have historically been highly volatile. If the tokens Universal DeFi earns do not have or do not retain value, Universal DeFi may be unable to generate meaningful revenue from its node and validator operations, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Universal DeFi’s validator must stake tokens and is subject to penalties, including the loss of staked tokens, for downtime or improper operation.

To operate its validator, Universal DeFi must commit, or stake, a quantity of the Ault Blockchain’s native token; staking is the locking up of tokens to support a blockchain network and to qualify to perform validation. Validators on the Ault Blockchain are subject to penalties, commonly referred to as slashing, for failures such as downtime, improperly approving invalid transactions, or other misbehavior, which can result in the loss of a portion of the staked tokens. If Universal DeFi’s validator experiences downtime, is misconfigured, is compromised, or otherwise fails to operate correctly, including as a result of acts or omissions by the affiliate that currently operates it, Universal DeFi could lose staked tokens, forfeit rewards, or be removed from the set of active validators. Any of the foregoing could reduce the value Universal DeFi derives from its validator and could materially and adversely affect the Company’s business, financial condition, and results of operations.

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Universal DeFi’s validator is operated by an affiliate under an arrangement that has not been formalized, which involves conflicts of interest and may be disrupted.

The day-to-day operation, maintenance, and hosting of Universal DeFi’s validator are currently performed by an affiliate of the Company on Universal DeFi’s behalf, and that affiliate currently bears the related costs. Universal DeFi expects to enter into a managed services agreement with that affiliate to formalize these services, but no such agreement has been executed, and the terms on which the services are provided, including their cost and duration, are not fixed. Because this arrangement is with an affiliate, it involves conflicts of interest and is not the result of arm’s-length negotiation, and the terms ultimately agreed may be less favorable to Universal DeFi than those it could obtain from an unaffiliated provider. If the affiliate ceases to provide these services, if the services are disrupted or provided improperly, or if Universal DeFi is unable to operate the validator itself or obtain equivalent services elsewhere on acceptable terms, its validator operations could be impaired. Any disruption of these arrangements could result in the loss of rewards or staked tokens and could materially and adversely affect the Company’s business, financial condition, and results of operations.

The rewards Universal DeFi earns from its Ault Nodes depend on the continued performance of work and on a selection process, and may be less than Universal DeFi expects.

Universal DeFi’s Ault Nodes earn rewards by performing verifiable off-chain work for the network, currently the generation of verifiable randomness, and rewards are allocated among licensed nodes in proportion to the verified work each node performs. The work is performed through a process in which nodes are selected to contribute, and rewards depend on factors including a node’s uptime, the correctness of its work, and the total amount of work performed across the network. If Universal DeFi’s nodes experience downtime, perform incorrectly, or are selected to contribute less frequently, or if the total work performed across the network increases such that Universal DeFi’s proportional share declines, the rewards Universal DeFi earns could be lower than expected. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi acquired its node licenses at a cost, the licenses are subject to transfer restrictions, and they may decline in value or be impaired.

Universal DeFi operates its Ault Nodes under licenses it acquired from the entity that issues node licenses for the Ault Blockchain. The licenses were acquired at a cost, are subject to a period during which they cannot be transferred, and confer the right to operate a node and earn rewards, together with associated governance rights. The value of these licenses depends on the success and economics of the Ault Blockchain, including the value, if any, of the rewards they generate. If the network does not succeed, if rewards decline or have no value, or if the rights associated with the licenses are changed, the licenses may decline in value or become impaired, and Universal DeFi may be unable to sell or otherwise realize value from them, including during the period in which they cannot be transferred. Any resulting impairment could materially and adversely affect the Company’s business, financial condition, and results of operations.

Affiliates of the Company are involved in the Ault Blockchain as its developer and as network participants, which creates conflicts of interest and concentration.

The Ault Blockchain was developed by Ault DAO, and affiliates of the Company participate in the network, including through the operation of Universal DeFi’s validator by an affiliate and through the holding of node licenses and associated governance rights. As a result, the interests of the Company and its affiliates are concentrated in the Ault Blockchain, and decisions affecting the network may be made by, or influenced by, parties affiliated with the Company. These relationships create conflicts of interest, including in the development, governance, and economics of the network, and there can be no assurance that decisions affecting the Ault Blockchain will be made in the best interests of Universal DeFi. The concentration of the Company’s and its affiliates’ interests in a single network also increases the effect on the Company if the network does not succeed. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Technology Risk Factors

Universal DeFi depends on a third-party developer to build and maintain its tokenization platform.

Universal DeFi’s tokenization platform is being developed by a third-party developer rather than by Universal DeFi itself. As a result, the timely completion, functionality, and security of the platform depend on the developer’s performance, on the continuation of the relationship, and on the quality of the software the developer delivers. Universal DeFi may also depend on the developer for

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ongoing maintenance, updates, and support after launch. If the developer fails to deliver the platform on the expected timeline or to the expected specifications, fails to remediate defects or vulnerabilities, or if the relationship is interrupted or terminated, Universal DeFi could experience significant delays and additional costs, and the launch or continued operation of the platform could be impaired. There can be no assurance that Universal DeFi could transition development to itself or another provider without disruption. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

The platform’s token control depends on a single third-party security provider, and a failure of that provider could disrupt the platform.

The platform is being designed to secure control of issued tokens using multi-party computation provided by a single third-party digital asset security provider, which is also expected to provide disaster recovery services. The platform’s token control layer is therefore expected to depend on a single provider. A failure, outage, security breach, insolvency, or termination of that provider, or a defect in its technology, could disrupt the operation of the platform, impair the ability of issuers to control their tokens, or render token environments inaccessible, and disaster recovery services may not be available or successful in all circumstances. Further, the provider contractually disclaims liability for digital asset loss, caps its liability, and may suspend or disconnect the network. Transitioning to a different provider may be difficult, time-consuming, or impossible without disrupting existing token projects. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Smart contracts and software underlying the platform and the Ault Blockchain may contain vulnerabilities that could be exploited.

Universal DeFi’s tokenization platform and the Ault Blockchain rely on smart contracts (self-executing software programs stored on a blockchain that automatically carry out their terms) and other software. Such software may contain bugs, errors, or vulnerabilities, and once deployed on a blockchain, smart contracts may be difficult or impossible to modify. If vulnerabilities in the platform’s or the network’s software are exploited, tokens or other digital assets could be lost, stolen, or rendered inaccessible, transactions could be processed incorrectly, and the platform or the network could be disrupted. The discovery of vulnerabilities, even if they are not exploited, could undermine confidence in the platform or the network. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

A cybersecurity breach, or the loss or theft of cryptographic keys, could result in the loss of assets or the disruption of Universal DeFi’s operations.

Universal DeFi’s operations depend on the security of its systems and of the cryptographic keys and approvals used to control digital assets and to operate its nodes and validator. Digital assets and blockchain infrastructure are frequent targets of cyberattacks, and the theft, loss, or compromise of keys or approvals can result in the permanent and irreversible loss of assets. A cybersecurity breach, a failure of security controls, or the loss, theft, or compromise of keys or approvals, whether affecting Universal DeFi, the affiliate that operates its validator, or its third-party providers, could result in the loss of digital assets, the disruption of operations, liability, and reputational harm. There can be no assurance that the security measures of Universal DeFi or of the parties it relies on will be sufficient. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

The Ault Blockchain is a new network that may experience outages, forks, congestion, or technical failures.

The Ault Blockchain is a new network, and new blockchain networks may experience technical problems including outages, software defects, congestion that slows transactions or increases costs, and forks, which are situations in which a network splits into competing versions. The network’s ability to operate reliably and at scale has not been established over a sustained period. If the Ault Blockchain experiences technical failures, becomes congested or prohibitively expensive to use, or splits into competing versions, Universal DeFi’s node and validator operations and its tokenization platform could be disrupted, and the value of the tokens it holds could decline. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Technological change or obsolescence could render Universal DeFi’s platform or operations uncompetitive.

The technologies underlying tokenization, blockchain networks, and digital asset security are developing rapidly. New technologies, standards, or competing platforms could emerge that are faster, less costly, more secure, more widely adopted, or better aligned with regulatory requirements than those Universal DeFi uses. If Universal DeFi’s platform or operations become obsolete or

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uncompetitive, or if Universal DeFi is unable to adapt to technological change on a timely basis or at acceptable cost, it may be unable to attract or retain issuers or to operate profitably, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Regulatory Risk Factors

The regulatory framework for tokenized and digital assets is new, unsettled, and evolving.

The legal and regulatory framework governing tokenized assets, digital assets, and blockchain network participation is new and unsettled, and it continues to develop and change, often unpredictably, across the jurisdictions in which Universal DeFi may operate. Regulators and courts may interpret existing laws in new ways, and new laws and regulations specific to digital assets may be adopted. This uncertainty makes it difficult for Universal DeFi to determine the requirements applicable to its activities and to plan its business. Changes in law, regulation, or interpretation could subject Universal DeFi to new or additional requirements, restrict its activities, or render aspects of its business impermissible, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.

The classification of a tokenized asset as a security, a commodity, or another type of asset is uncertain and varies by underlying asset and jurisdiction.

The regulatory treatment of a tokenized asset generally depends on the nature of the underlying asset and the jurisdiction involved. To the extent an underlying asset is a security, the resulting token is expected to be treated as a security and to be subject to securities regulation; to the extent it is a commodity, the token may be subject to commodities regulation; and other assets may be subject to other regimes or to laws of general application. The same asset may be classified differently in different jurisdictions. This classification will generally determine the requirements that apply to the token, the issuer, and potentially to Universal DeFi’s services, and the classification of a particular token may be uncertain or may be challenged. If tokens issued through the platform are determined to be subject to regulatory regimes that Universal DeFi or its issuers cannot satisfy, Universal DeFi may be required to restrict or cease tokenizing certain assets, and the Company’s business, financial condition, and results of operations could be materially and adversely affected.

Regulatory requirements applicable to tokenized assets could materially limit, delay, or prevent Universal DeFi from offering its tokenization services, and could require it to curtail or cease that business.

The tokenization of assets is subject to extensive and evolving regulation, and the requirements that apply depend on the nature of the underlying asset and the jurisdictions involved. Tokenizing securities, commodities, and certain other assets may require Universal DeFi or the issuers it serves to comply with registration, licensing, disclosure, and other regulatory requirements, and the regulatory treatment of these activities is uncertain and continues to change. If regulatory requirements applicable to tokenized assets are more burdensome than anticipated, if Universal DeFi or its issuers are unable to satisfy them, or if regulators determine that Universal DeFi’s tokenization activities are impermissible or require authorizations that Universal DeFi does not hold, Universal DeFi may be required to limit the assets it tokenizes, restrict the jurisdictions in which it operates, or curtail or cease its tokenization business altogether. Any of the foregoing could prevent Universal DeFi from generating revenue from tokenization, could render its tokenization business unviable, and could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi may be required to obtain licenses or registrations, and may be deemed to be acting as a broker-dealer, transfer agent, money transmitter, or other regulated entity.

Depending on how its activities are characterized and on the jurisdictions in which it operates, Universal DeFi may be required to obtain licenses or registrations, and regulators could determine that it is acting as a broker-dealer, transfer agent, money transmitter, money services business, or other regulated entity, even though it does not currently intend to provide such services. Universal DeFi does not currently hold these licenses or registrations. Obtaining and maintaining licenses or registrations can be costly and time-consuming, and there can be no assurance that Universal DeFi could obtain those it requires. If Universal DeFi is required to obtain authorizations it does not hold, is found to have operated without a required authorization, or becomes subject to the requirements applicable to regulated entities, it could be subject to penalties, be required to change or curtail its operations, and incur significant costs, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.

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Regulation varies by jurisdiction and may restrict, condition, or prohibit Universal DeFi’s services in markets that are material to its business.

The regulation of tokenized assets, digital assets, and blockchain network participation varies significantly from jurisdiction to jurisdiction. The same activity may be permitted in one jurisdiction, require a license or registration in another, and be restricted or prohibited in a third, and these approaches continue to change. Universal DeFi expects to evaluate the requirements applicable to its services on a jurisdiction-by-jurisdiction basis.

Universal DeFi may be required to obtain licenses or registrations in certain jurisdictions, to restrict or condition its services in others, or to decline to operate where its services cannot be lawfully provided. If regulation restricts, conditions, or prohibits Universal DeFi’s services in markets that are material to its business, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

International regulatory regimes impose additional and differing requirements that could increase Universal DeFi’s costs or restrict its operations.

Universal DeFi intends to make its services available internationally where lawful. A number of jurisdictions have adopted or are developing comprehensive regulatory regimes for digital assets and markets in those assets, including regimes that impose licensing, disclosure, capital, governance, and conduct requirements on participants, and these regimes differ from one another and from the requirements applicable in the United States.

Complying with multiple and differing international regimes could be costly and complex, and Universal DeFi may be unable to comply with all applicable requirements or may be required to restrict its operations in certain jurisdictions. Failure to comply could subject Universal DeFi to penalties and enforcement. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi relies on issuers to perform holder-level identity verification, and it may nonetheless face anti-money-laundering liability for the misuse of tokens issued through its platform.

Universal DeFi does not currently intend to perform identity verification on individual holders of tokens issued through the platform, and it intends for responsibility for holder-level compliance obligations, including any applicable know-your-customer and anti-money-laundering requirements (regulatory requirements to verify the identities of customers and to prevent illegal financial activity), to rest with the issuer. This allocation depends on issuers performing their obligations, which Universal DeFi may have limited ability to verify.

If issuers fail to perform required holder-level compliance, if tokens issued through the platform are used to facilitate money laundering, sanctions evasion, terrorist financing, or other illicit activity, or if regulators conclude that Universal DeFi cannot disclaim responsibility for holder-level compliance notwithstanding its intended allocation of that responsibility to issuers, Universal DeFi could be subject to enforcement, penalties, and reputational harm. There can be no assurance that Universal DeFi’s allocation of these responsibilities will be respected by regulators in all jurisdictions. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

Universal DeFi may become subject to enforcement actions, investigations, or litigation.

Given the unsettled and evolving regulation of tokenized and digital assets and the novelty of Universal DeFi’s activities, Universal DeFi may become subject to investigations, enforcement actions, or litigation by regulators, governmental authorities, or private parties, including in connection with the tokens issued through its platform, its node and validator operations, or its compliance with applicable law. Responding to investigations, enforcement actions, or litigation can be costly and time-consuming, can divert management’s attention, and can result in penalties, restrictions on Universal DeFi’s activities, or reputational harm, regardless of outcome. Any of the foregoing could materially and adversely affect the Company’s business, financial condition, and results of operations.

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Risks Related to Our Indebtedness and Liquidity

We have incurred losses and we may not be able to manage our business on a profitable basis.

We reported net sales of $4,847,163 for the year ended March 31, 2026 versus $23,563,554 for the comparable period last year. We reported a net loss of $(2,485,763), or $(1.04) per basic and diluted share, for the year ended March 31, 2026, compared to net income of $500,684, or $0.22 per basic and diluted share for the same period last year. Included in the March 31, 2026 results was a non-recurring gain of $2,820,668 from the sale of our smoke and carbon monoxide alarm segment (the “Feit Asset Sale”).

The revenue and income potential of our business and market are unproven. This makes an evaluation of our company difficult and highly speculative. We require additional working capital and there can be no assurances that we will (i) be able to develop products or services on a timely and cost-effective basis, (ii) be able to generate any increase in revenues, (iii) obtain adequate financing on reasonably acceptable bases, if at all, or resources to continue operating our business and to provide products to customers and (iv) ever earn a profit. There can also be no assurance that we will raise sufficient capital to support operations by attaining profitability, or that we can satisfy future liabilities.

Our losses from operations and liquidity conditions raise substantial doubt regarding our ability to continue as a going concern.

We reported a net loss of $2,485,763 for the fiscal year ended March 31, 2026, resulting primarily from lower sales during the March 31, 2026 fiscal year since we sold our smoke and carbon monoxide alarm segment during the first fiscal quarter of the fiscal year. In addition, we had an accumulated deficit of $12,543,809 as of March 31, 2026. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date of the issuance of the audited consolidated financial statements included in this Annual Report on Form 10-K. Our ability to continue as a going concern is dependent on our ability to generate cash flows from operations and find additional sources of funding through either equity offerings, debt financings, or a combination of any such transactions.

In June 2026, we entered into a securities purchase agreement to sell up to $10 million of convertible notes, of which $1.0 million has been funded to date. However, the closing of the remaining $9.0 million is subject to various contingencies, some of which are outside our control. As such, there is no assurance that this financing will be available when needed or that management will be able to obtain other financing on terms acceptable to us, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, there is substantial doubt that we will be able to continue as a going concern. If the foregoing plans are unsuccessful and we are unable to continue as a going concern, you could lose all or part of your investment in our company.

To service any future indebtedness and other obligations, we will require a significant amount of cash.

Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations, of which we currently have very few but may in the future incur, including our obligations under our indebtedness, could harm our business, financial condition and results of operations. Our ability to make payments on and to refinance any indebtedness and to fund working capital needs and planned capital expenditures will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control.

If our business does not generate sufficient cash flow from operations or if future borrowings are not available to us in an amount sufficient to enable us and our subsidiaries to pay our indebtedness or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness, on or before the maturity thereof, sell assets, reduce or delay capital investments or seek to raise additional capital, any of which could have a material adverse effect on us.

In addition, we may not be able to effect any of these actions, if necessary, on commercially reasonable terms or at all. Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of future debt instruments may limit or prevent us from taking any of these actions. In addition, any failure to make scheduled payments of interest and principal on any future outstanding indebtedness could harm our ability to incur additional indebtedness or otherwise raise capital on commercially reasonable terms or at all. Our inability to generate sufficient cash flow to satisfy any future debt service and other obligations, or to refinance or restructure our obligations on

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commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial condition and results of operations.

We will need to raise additional capital to fund our operations in furtherance of our business plan.

Until we are profitable, we will need to raise additional capital in order to fund our operations in furtherance of our business plan. The proposed financing may include shares of common stock, shares of preferred stock (if authorized in the future), warrants to purchase shares of common stock or preferred stock, debt securities, units consisting of the foregoing securities, equity investments from strategic development partners or some combination of each. Any additional equity financings may be financially dilutive to, and will be dilutive from an ownership perspective to, our stockholders, and such dilution may be significant based upon the size of such financing. Additionally, we cannot assure that such funding will be available on a timely basis, in needed quantities, or on terms favorable to us, if at all.

Risks Related to our Business and Operations

If we are unable to sell our remaining electrical products after the Feit Asset Sale at acceptable prices relative to our costs including import tariffs, or if we fail to develop and introduce on a timely basis new electrical products from which we can derive additional sales, our financial results will suffer and may negatively impact our ability to achieve our business objectives.

Sales were lower during the March 31, 2026 fiscal year since we sold our smoke and carbon monoxide alarm segment in the Feit Asset Sale during the first fiscal quarter. Sales were further negatively impacted by the increased import tariffs on all our products. Our plans are to continue operations in the wiring device and bath fan segments of our business, develop our DeFi products and services and look for other opportunities to grow stockholder value. However, following the sale of our smoke and carbon monoxide alarm segment, there can be no assurance that our future operations will result in net income. Our failure to make up those sales that were previously accounted for by the alarm segment will harm our business. We may not be able to sustain or increase net income on a quarterly or annual basis in the future. If our sales grow more slowly than we anticipate, our gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer. The prices we charge for our electrical products may decrease in a competitive market, which would reduce our sales and harm our business. If we are unable to sell our remaining electrical products after the Feit Asset Sale at acceptable prices relative to our costs including import tariffs, or if we fail to develop and introduce on a timely basis new products from which we can derive additional sales, our financial results will suffer and may negatively impact our ability to achieve our business objectives.

Changes in trade policy in the U.S. and other countries, specifically the People’s Republic of China, including the imposition of additional tariffs and the resulting consequences, may adversely impact our results of operations and financial condition.

We currently import virtually all of the safety and security products that we are continuing to sell. As an importer, we are subject to numerous tariffs which vary depending on types of products and country of origin, changes in economic and political conditions in the country of manufacture, potential trade restrictions and currency fluctuations. Substantially all our products are imported from the People’s Republic of China. Certain of these products such as wiring devices are currently subject to tariffs between 25% and 45% of their cost, though there can be no assurance that this percentage will not increase within the foreseeable future. The imposition of and modification of tariffs has increased uncertainty as to the short-term sustainability of importing products from our principal suppliers. We cannot determine at this time how tariffs will affect our future profitability and whether they will reduce the number of products that we sell or whether we could pass these tariff costs on to our customers through price adjustments. If we are unable to import products at a competitive price point, our sales would be adversely affected, resulting in a materially adverse effect on our business, results of operations, financial condition and future prospects.

Global economic and capital market conditions may cause our access to capital to be more difficult in the future and/or costs to secure such capital more expensive.

We may seek access to additional funding to provide liquidity to conduct our operations, expand our business or refinance existing indebtedness. Any sustained weakness in general economic conditions, or U.S. or global capital markets could adversely affect our ability to raise capital on acceptable terms, if at all; any failure to raise sufficient capital could require us to curtail or cease our operations. We may also rely in the future on access to financial markets as a source of liquidity for working capital requirements, acquisitions and general corporate purposes. Longer term volatility and continued disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation of financial institutions, reduced alternatives or failures of significant financial

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institutions could adversely affect our access to the liquidity needed for our businesses in the longer term. Such disruptions could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged.

Our overall sales are primarily dependent upon the strength of the U.S. housing market.

We currently market products such as door chimes, ventilation products, ground fault circuit interrupters and other electrical devices to the electrical distribution trade through our wholly owned subsidiary, Universal Safety Electric, Inc. Given the nature of these products, our overall sales are primarily dependent upon the strength of the U.S. housing market. Management believes that with an improved housing market, we will continue to improve profitability, but any downward changes in the housing market could adversely affect our sales.

Competition from a number of companies could result in price reduction, reduced revenue and loss of market share and could harm our results of operations.

Our product offerings, including ground fault circuit interrupter products, compete in functionality with similar products offered by our larger competitors. Prior to the imposition of tariffs, our products also competed favorably with similar products offered by our larger competitors. While we believe there will be market acceptance of our products, we cannot be assured you that our belief will prove accurate. Should our products not achieve the level of acceptance we anticipate from our customers, there could be a materially adverse effect on our future operations, and our sales and revenue could further decline.

Risks Related to Ownership of Our Common Stock and Future Offerings

If we do not continue to satisfy the NYSE American continued listing requirements, our common stock could be delisted from NYSE American.

The listing of our common stock on the NYSE American is contingent on our compliance with the NYSE American’s conditions for continued listing. While we are presently in compliance with all such conditions, we received a delinquency notice last year due to our failure to timely file our annual report on Form 10-K for the fiscal year ended March 31, 2025 with the SEC. While we cured that delinquency, it is possible that we will fail to meet one or more of these conditions in the future.

If we were to fail to meet any of the NYSE American’s listing requirements, we may be subject to delisting. In the event our common stock is no longer listed for trading on NYSE American, our trading volume and share price would almost certainly decrease and we may experience difficulties in raising capital which could materially affect our results of operations and financial condition. Further, being delisted from the NYSE American could also have other negative effects, including potential loss of confidence by partners, lenders, suppliers and employees. Finally, delisting could make it harder for us to raise capital and sell securities.

You may experience future dilution as a result of future equity offerings.

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exercisable or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock, or securities convertible into or exercisable or exchangeable for common stock, in future transactions may be higher or lower than the price per share paid by investors in this offering.

Our common stock price may be volatile.

Our common stock is listed on the NYSE American. In the past, our trading price has fluctuated, depending on many factors that may have little to do with our operations or business prospects. During the past 52-week period (through July 1, 2026), our stock closed at prices between $2.95 per share and $8.02 per share, as reported on NYSE.com. On July 1, 2026, the price of our common stock closed at $4.19 per share.

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Stock markets, in general, have experienced, and continue to experience, significant price and volume volatility, and the market price of our common stock may continue to be subject to similar market fluctuations unrelated to our operating performance or prospects. This increased volatility, coupled with depressed economic conditions, could continue to have a depressive effect on the market price of our common stock. The following factors, many of which are beyond our control, may influence our stock price:

Volatility in our common stock price may subject us to securities litigation.

In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted securities class action litigation against that company. If we were involved in a class action suit or other securities litigation, it would divert the attention of our senior management, require us to incur significant expense and, whether or not adversely determined, have a material adverse effect on our business, financial condition, results of operations and prospects.

We are controlled by current officers, directors and principal stockholders.

Our directors, executive officers, their affiliates, and our principal stockholders (5% or greater) beneficially own approximately 53.3% of our outstanding voting stock. Our directors, officers and principal stockholders, taken as a whole, have the ability to exert substantial influence over the election of our board of directors and the outcome of matters submitted to our stockholders for their approval.

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The issuance of shares of common stock upon the conversion of convertible notes could affect our stock price.

In June 2026, we entered into an agreement to issue up to $10.6 million of convertible notes. The market price for the shares of common stock that the convertible note holder may receive upon conversion of the convertible notes will fluctuate based on a number of factors beyond our control, however, the convertible note holder may not convert the convertible notes into shares of common stock at a price per share less than $1.00 (the “Floor Price”). If the convertible notes were all converted at the Floor Price, we would issue an aggregate of 10.6 million shares of common stock, not including any accrued but unpaid interest. The issuance of common stock pursuant to the convertible notes at conversion price lower than market price could increase the volatility of the market price of our common stock or result in a significant decline in the public trading price of our common stock.

If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our shares of common stock, the price of our common stock and trading volume could decline.

The trading market for our common stock may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our common stock would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our common stock and the trading volume to decline.

General Risk Factors

Deterioration of global economic conditions could adversely affect our business.

The global economy and capital and credit markets have experienced exceptional turmoil and upheaval over the past several years. Ongoing concerns about the systemic impact of potential long-term and widespread recession and potentially prolonged economic recovery, volatile energy costs, fluctuating commodity prices and interest rates, volatile exchange rates, geopolitical issues, including the conflicts between Russia and Ukraine as well as the one between the United States and Israel against Iran, natural disasters and pandemic illness, instability in credit markets, cost and terms of credit, consumer and business confidence and demand, a changing financial, regulatory and political environment, and substantially increased unemployment rates have all contributed to increased market volatility and diminished expectations for many established and emerging economies, including those in which we operate. Furthermore, austerity measures that certain countries may agree to as part of any debt crisis or disruptions to major financial trading markets may adversely affect world economic conditions and have an adverse impact on our business. These general economic conditions could have a material adverse effect on our cash flow from operations, results of operations and overall financial condition.

The availability, cost and terms of credit also have been and may continue to be adversely affected by illiquid markets and wider credit spreads. Concern about the stability of the markets generally, and the strength of counterparties specifically, has led many lenders and institutional investors to reduce credit to businesses and consumers. These factors have led to a decrease in spending by businesses and consumers over the past several years, and a corresponding slowdown in global infrastructure spending.

Continued uncertainty in the U.S. and international markets and economies and prolonged stagnation in business and consumer spending may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our customers, including our ability to access capital markets and obtain capital lease financing to meet liquidity needs.

If we fail to establish and maintain an effective system of internal control over financial reporting, we may not be able to report our financial results accurately or prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.

Effective internal control over financial reporting 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. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operations and access to capital. We have carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the most recent period covered by this report. Based on the foregoing, our principal executive officer and principal financial

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officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weakness described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weakness which has caused management to conclude that as of March 31, 2026, our internal control over financial reporting (“ICFR”) was not effective.

A material weakness arose with respect to a lack of segregation of duties relating to substantially all accounting functions including review controls and account reconciliation over significant transaction classes inclusive of the income tax provision, lack of documentation to support journal entries, lack of proper IT general controls, incomplete footnote disclosures, and resulting in material audit adjustments.

A material weakness arose in managements controls surrounding complex financial instruments which include the evaluation of the fair value of the convertible debentures and the related derivative component of convertible debentures, in conjunction with the August 13, 2025 and September 25, 2025 note transactions upon inception and at March 31, 2026, and the calculation of stock option expense which required a material adjustment during the review of Form 10-K for the year ended March 31, 2026.

We are currently working to improve and simplify our internal processes and implement enhanced controls to address the material weakness in our internal control over financial reporting and to remedy the ineffectiveness of our disclosure controls and procedures. This material weakness will not be considered to be remediated until the applicable remediated controls are operating for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

If our accounting controls and procedures are circumvented or otherwise fail to achieve their intended purposes, our business could be seriously harmed.

We evaluate our disclosure controls and procedures as of the end of each fiscal quarter, and annually review and evaluate our internal control over financial reporting in order to comply with the SEC’s rules relating to internal control over financial reporting adopted pursuant to the Sarbanes-Oxley Act of 2002. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. If we fail to maintain effective internal control over financial reporting or our management does not timely assess the adequacy of such internal control, we may be subject to regulatory sanctions, and our reputation may decline.

Our internal computer systems may fail or suffer security breaches, which could result in a material disruption of our operations.

Like any other business, we rely on e-mail and other digital communications methods as part of our normal operations. As such, our internal computer systems and servers could fail or suffer security breaches, possibly resulting in a material disruption to our operations. The secure operation of our IT networks and systems as well as the secure processing and maintenance of information is critical to our operations and business strategy. Notwithstanding these priorities, we have experienced attempts at cybercrime such as phishing and other electronic fraud. We also maintain an insurance policy to cover any losses or injuries suffered from cybercrime of this nature; however, it may not be sufficient to cover all damages. Despite our efforts, attempts at fraud such as spoofed e-mails, requests for payment and similar deceptions have become commonplace in the world of e-commerce and are expected to continue. If we are unable to prevent such security breaches in the future, these events or circumstances could materially and adversely affect our operations, financial condition and operating results and impair our ability to execute our business strategy.

Many of our competitors are larger and have greater financial and other resources than we do.

Our products and services compete and will compete with similar if not identical products or services produced by our competitors. These competitive products could be marketed by well-established, successful companies that possess greater financial, marketing, distribution personnel, and other resources than we do. Using said resources, these companies can implement extensive advertising and promotional campaigns, both generally and in response to specific marketing efforts by competitors. They can introduce new products and services to new markets more rapidly. In certain instances, competitors with greater financial resources may be able

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to enter a market in direct competition with us, offering attractive marketing tools to encourage the sale of products and services that compete with our products and services or present cost features that consumers may find attractive.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

We are a public company and subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act of 2002. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. For example, Section 404 of the Sarbanes-Oxley Act requires that our management report on the effectiveness of our internal controls structure and procedures for financial reporting. Section 404 compliance may divert internal resources and will take a significant amount of time and effort to complete. If we fail to maintain compliance under Section 404, or if our internal control over financial reporting continues to not be effective as defined under Section 404, we could be subject to sanctions or investigations by the NYSE American, the SEC, or other regulatory authorities. Furthermore, investor perceptions of our company may suffer, and this could cause a decline in the market price of our common stock. Any failure of our internal controls could have a material adverse effect on our stated results of operations and harm our reputation. If we are unable to implement these changes effectively or efficiently, it could harm our operations, financial reporting or financial results and could result in an adverse opinion on internal controls from our independent auditors. We may need to hire a number of additional employees with public accounting and disclosure experience in order to meet our ongoing obligations as a public company, particularly if we become fully subject to Section 404 and its auditor attestation requirements, which will increase costs. Our management team and other personnel will need to devote a substantial amount of time to new compliance initiatives and to meeting the obligations that are associated with being a public company, which may divert attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.

We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.

We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”). Section 404 requires that we document and test our internal control over financial reporting and issue management’s assessment of our internal control over financial reporting. Management assessed the effectiveness of our internal control over financial reporting as of March 31, 2026. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Based on our assessment, as of March 31, 2026, we concluded that our internal control over financial reporting contained material weaknesses.

The weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and our management has concluded, through testing, that these controls are operating effectively. If we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, the accuracy and timeliness of the filing of our annual and quarterly reports may be materially adversely affected and could cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock. In addition, a material weakness in the effectiveness of our internal control over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.

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The elimination of monetary liability against our directors, officers and employees under law and the existence of indemnification rights for or obligations to our directors, officers and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.

Our certificate of incorporation contains a provision permitting us to eliminate the personal liability of our directors to us and our stockholders for damages for the breach of a fiduciary duty as a director or officer to the extent provided by Maryland law. We have entered into indemnification agreements with each of our directors and executive officers and may also have contractual indemnification obligations under current and/or future employment agreements with other officers. The foregoing indemnification obligations could result in us incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and the resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit us and our stockholders.

We do not anticipate paying cash dividends on our common stock and, accordingly, stockholders must rely on stock appreciation for any return on their investment.

Except for a one-time special cash dividend after the Feit Asset Sale, we have never declared or paid cash dividends on our common stock and do not expect to do so in the foreseeable future. The declaration of dividends is subject to the discretion of our Board and will depend on various factors, including our operating results, financial condition, future prospects and any other factors deemed relevant by our Board. You should not rely on an investment in our company if you require dividend income from your investment in our company. The success of your investment will likely depend entirely upon any future appreciation of the market price of our common stock, which is uncertain and unpredictable. There is no guarantee that our common stock will appreciate in value.

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Not applicable.

We rely upon internally and externally managed information technology systems and networks for the collection and storage of sensitive data and business information. We approach cybersecurity risks with a comprehensive risk management and governance strategy designed to assess, identify, and manage cybersecurity risks to our business.

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