Risk Factors Update Summary

• Added provisions in the Amended and Restated Charter and Bylaws could delay or prevent acquisitions.
• Ownership structure allows controlled company status, exempt from certain governance requirements, impacting shareholder protections.
• Increased regulatory scrutiny may lead to fines, penalties, and reputational harm, impacting financial results.
• Addition of "and uncertainties" to risk disclosure enhances clarity and highlights potential unknown risks.
• Changes in accounting rules may materially affect financial results and stock price.
• China and Russia's cryptocurrency bans may limit large-scale use, affecting growth potential and operations globally.
• Increased compliance personnel costs to approximately $2.0 million annually.
• Failure of financial institutions could lead to substantial business disruption and regulatory actions.
• New accounting standards require measuring crypto assets at fair value, impacting financial reporting.
• Mention of "transaction volume" dependency on Bitcoin prices added, emphasizing volatility impact.
• Increased regulatory oversight and proposed legislation may impact operations, compliance costs, and regulatory landscape.
• Issued 4,300,000 shares of Series A Preferred Stock in a private placement.
• Tax Receivable Agreement with BT HoldCo and BT Assets could result in significant payments.
• Taken measures to detect and reduce fraud risks, including continuous improvement and optimization.
• Market disruptions in crypto asset markets could lead to financial losses, legal proceedings, and government investigations.
• Errors or vulnerabilities in software, hardware, or systems could have a material adverse effect.
• Safeguarding crypto assets is crucial; failure could harm business, results, and financial condition.
• Expanded focus on anti-money laundering compliance unique to a money service business.
• Identified material weaknesses in internal control over financial reporting, with additional weaknesses in 2023.
• Inclusion of the need for "additional funds" for business combinations indicates financial planning challenges.
• Dependence on limited suppliers for hardware and software may lead to negative publicity and litigation.
• California Digital Financial Assets Law imposes restrictions on crypto kiosks, affecting operations and compliance costs.
• Licensing requirements may lead to increased ongoing compliance costs in additional states or jurisdictions.
• Security technology and safeguards aim to prevent unauthorized access, but breaches could impact operations.
• Debt agreements impose restrictions, potential default could lead to acceleration of indebtedness. Total indebtedness was $24.3 million as of December 31, 2023.
• Market volatility may affect Class A common stock value, subjecting the company to litigation.
• Potential sanctions and export controls may impact global operations, compliance costs, and financial results.
• Potential dilution from warrants exercisable for 43,848,750 shares of Class A common stock.
• Introduction of "private key pair" risks highlights potential loss of cryptocurrency due to user errors.
• Reference to "capital stock issuance" and dilution impact on stockholders raises concerns about ownership.
• Increased focus on ESG factors may impact investor perception and stock value.
• Class structure concentrates voting control with Brandon Mintz and affiliates, limiting shareholder influence.
• Uncertainty in tax treatment of digital asset transactions may lead to adverse tax consequences.
• Adverse economic conditions could impact business performance and user retention.
• Reliance on third-party service providers poses operational risks, including disruptions, losses, and compliance challenges.
• Emphasis on the need for ongoing "risk management" improvements indicates evolving challenges.
• Exclusive forum provision in the Amended and Restated Charter limits stockholders' ability to choose judicial forum.
• Climate change effects could disrupt operations, particularly in vulnerable areas like California, Texas, and Florida.
• Reliance on a limited number of suppliers for kiosks and components poses risks of shortages, price increases, and disruptions.
• Mention of "cybersecurity incidents" and potential reputational harm underscores operational vulnerabilities.