SEC Form 10-Q filed by Yorkville Acquisition Corp.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the quarterly period ended September 30, 2025

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or

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☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the transition period from                      to                     

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Commission File Number: 001-42720

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Yorkville Acquisition Corp.

(Exact name of registrant as specified in its charter)

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1012 Springfield Avenue

Mountainside, New Jersey 07092

(Address of principal executive offices, including zip code)

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(201) 985-8300

(Registrant’s telephone number, including area code)

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N/A

(Former name, former address and former fiscal year, if changed since last report)

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Securities registered pursuant to Section 12(b) of the Act:

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

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☒ Yes ☐ No

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As of November 14, 2025, the registrant had a total of 17,831,250 Class A ordinary shares, $0.0001 par value, issued and outstanding and 5,750,000 Class B ordinary shares, $0.0001 par value, issued and outstanding.

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YORKVILLE ACQUISITION CORP.

SEPTEMBER 30, 2025

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

YORKVILLE ACQUISITION CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2025

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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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YORKVILLE ACQUISITION CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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YORKVILLE ACQUISITION CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND FOR THE PERIOD FROM MARCH 3, 2025 (INCEPTION) THROUGH SEPTEMBER 30, 2025

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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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YORKVILLE ACQUISITION CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIOD FROM MARCH 3, 2025 (INCEPTION) THROUGH SEPTEMBER 30, 2025

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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We refer to this report as our “Quarterly Report on Form 10-Q” and references to “we,” “us” or the “Company” herein reference Yorkville Acquisition Corp., a Cayman Islands exempted company. Reference to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Yorkville Acquisition Sponsor LLC, a Delaware limited liability company. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering (as defined below) filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 30, 2025. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated on March 3, 2025 as a Cayman Island exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Quarterly Report as our “initial business combination”. We intend to effectuate our initial business combination using cash from the proceeds of the initial public offering (the “Initial Public Offering”) and the sale of the Private Placement Warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of the Initial Public Offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

On June 30, 2025, we consummated our Initial Public Offering of 17,250,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 351,825 Private Placement Units, in a private placement to the Sponsor, at a price of $10.00 per Private Placement Unit, generating gross proceeds of $3,518,250.

We incurred offering costs of $9,424,463, consisting of $1,155,750 of cash underwriting fee, $5,175,000 of deferred underwriting fee, $2,294,250 for issuance of representative shares, and $799,463 of other offering costs.

Upon the closing of the Initial Public Offering and the private placement, $173,362,500 ($10.05 per Unit) of the net proceeds of the sale of the Units and the Private Placement Units were placed in a U.S.-based trust account (the “Trust Account”), located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and will be invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invests only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of an initial business combination and (ii) the distribution of the Trust Account as described below.

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Proposed Business Combination

On August 25, 2025, the Company executed a Business Combination Agreement (the “Business Combination Agreement”), with YA S3 Inc., a Florida corporation and an indirect wholly owned subsidiary of the Company (“SPAC Sub”), Foris Holdings KY Limited, a Cayman Islands exempted company known commercially as Crypto.com (“Crypto.com”), Crypto.com Strategy Holdings, a Cayman Islands exempted company (“Crypto.com Sub”), Yorkville Acquisition Sponsor, LLC, a Delaware limited liability company (“Sponsor”), and Trump Media & Technology Group Corp., a Florida corporation (“TMTG” and together with Crypto.com Sub and the Sponsor, the “Sellers”).

Pursuant to the terms of the Business Combination Agreement, the Sellers will contribute certain assets to the Company and SPAC Sub (as applicable) in exchange for Transaction Shares, the Forced Exercise Warrants and the Earnout Warrants (as applicable).

Pursuant to and concurrently with the execution of the Business Combination Agreement, Crypto.com entered into an Asset Contribution Agreement with Crypto.com Sub (the “Pre-Closing Crypto.com Contribution Agreement 1”) pursuant to which, immediately prior to, but contingent upon, the Closing, Crypto.com will contribute (the “Pre-Closing Crypto.com Contribution”) 6,313,000,212 Cronos tokens and all necessary physical devices required to establish and operate a Cronos proof of stake validator node and staking infrastructure (the “Cronos Assets”) to Crypto.com Sub.

Pursuant to and concurrently with the execution of the Business Combination Agreement, Crypto.com Sub entered into an Asset Contribution Agreement with the Company (the “Crypto.com Contribution and Sale Agreement” and, together with the Crypto.com Pre-Closing Contribution Agreement 1, the “Crypto.com Contribution Agreements”) pursuant to which, at the Closing, (a) Crypto.com Sub will (1) at the Closing, sell 90% of the Cronos Assets to SPAC Sub and (2) immediately following the Closing, contribute 10% of the Cronos Assets to the Company in consideration of an aggregate 100,000,000 shares of SPAC Class B Common Stock, and a Forced Exercise Warrant, exercisable for 10,000,000 shares of SPAC Class A Common Stock. In connection with the consummation of the Crypto.com Contribution Agreement 2, at the Closing, Crypto.com will license to the Company, pursuant to a Trademark License Agreement, certain intellectual property and all operational knowhow and proprietary technology required to establish and operate a Cronos proof of stake validator node, and staking infrastructure.

Pursuant to and concurrently with the execution and delivery of the Business Combination Agreement, TMTG entered into a trademark license agreement (the “TMTG License Agreement”), with Trump Media Group, LLC, a Florida limited liability company, (“Asset Company”) pursuant to which, immediately prior to, but contingent upon, the Closing, TMTG will license the rights to use the “Trump Media Group” brand name and certain other Intellectual Property rights to the Asset Company (the “Pre-Closing TMTG Contribution” and together with the Pre-Closing Crypto.com Contribution, the “Pre-Closing Contributions”).

Pursuant to and concurrently with the execution and delivery of the Business Combination Agreement, TMTG entered into an asset contribution agreement with the Company (the “TMTG Contribution Agreement”) and, together with the Crypto.com Contribution Agreements and the TMTG License Agreement, the “Contribution Agreements”) pursuant to which, at the Closing, TMTG will contribute 100% of the issued and outstanding membership interests of the Asset Company to the Company in consideration of 10,000,000 shares of SPAC Class A Common Stock, the Earnout Warrants (as described below) and a Forced Exercise Warrant, exercisable for 10,000,000 shares of SPAC Class A Common Stock.

At the Closing, subject to the terms and conditions set forth in the Business Combination Agreement and pursuant to the Contribution Agreements, the Sellers will sell to the Company (or SPAC Sub, as applicable), and the Company (or SPAC Sub, as applicable) will purchase from the Sellers, the Cronos Assets and the Asset Company Interests (as applicable) as follows:

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Results of Operations

As of September 30, 2025, we had not commenced any operations. All activity from inception through September 30, 2025 relates to our formation and our Initial Public Offering, and, since the completion of the Initial Public Offering, our search for a target to consummate an initial business combination. We will not generate any operating revenues until after the completion of an initial business combination, at the earliest. We will generate non-operating income in the form of interest and dividend income from the proceeds derived from the Initial Public Offering and placed in the Trust Account. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended September 30, 2025, we had net loss of $395,372, which consisted of formation, general and administrative expenses of $1,640,771, offset by income on investments held in the Trust Account of $1,237,068 and interest income of $8,331.

For the period from March 3, 2025 (inception) through September 30, 2025, we had net loss of $487,506, which consisted of formation, general and administrative expenses of $1,734,769, offset by income on investments held in the Trust Account of $1,237,068 and interest income of $10,195.

Liquidity, Capital Resources and Going Concern

As of September 30, 2025, we had $290,238 in cash and cash equivalents held outside of the Trust Account and a working capital deficit of $936,432 (excluding cash and marketable securities held in the Trust Account and the deferred underwriter fee payable).

Until the consummation of the Initial Public Offering, our only source of liquidity was from the $25,000 of proceeds from our Sponsor’s purchase of Class B ordinary shares, par value $0.0001 per share, and a loan of $124,723 from our Sponsor pursuant to a promissory note to cover certain expenses.

Following our Initial Public Offering and the sale of Private Placement Units to the Sponsor, a total of $173,362,500 was placed in the Trust Account.

For the period from March 3, 2025 (inception) through September 30, 2025, net cash used in operating activities was $563,093. Net loss of $487,506, was adjusted by formation, general and administrative expenses paid by Sponsor under promissory note – related party of $41,195, formation, general and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares of $12,762, income on investments in Trust Account of $1,237,068, and $1,107,524 changes in operating assets and liabilities. Net cash used in investing activities was $173,362,500 related to the funding of the Trust Account. Net cash provided by financing activities was $174,215,831 related to $171,344,250 of net proceeds from the issuance of ordinary shares, $3,518,250 of proceeds from sale of Private Placement Units, and $181,750 of capital contributions from the Sponsor, offset by repayment of promissory note to Sponsor of $124,723 and $703,696 payments of deferred offering costs.

As of September 30, 2025, we had marketable securities held in the Trust Account of $174,599,568 consisting of securities held in a money market fund that invests in U.S. Treasury securities with a maturity of 185 days or less. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting fees and income taxes payable), to complete our initial business combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will

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be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of September 30, 2025, we had cash and cash equivalents of $290,238 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete an initial business combination.

We may need to raise additional funds in order to meet the expenditures required for operating our business prior to our initial business combination. We expect to incur significant costs related to identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination. These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within one year from the date that the financial statements accompanying this Quarterly Report on Form 10-Q are issued.

In order to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that an initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units of the post-business combination entity at a price of $10.00 per unit, at the option of the lender. As of September 30, 2025, we did not have any outstanding working capital loans.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of September 30, 2025.

The underwriters of the Initial Public Offering are entitled to a deferred underwriting discount of $0.30 per Unit, or $5,175,000. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete an initial business combination, subject to the terms of the underwriting agreement.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting estimates as of September 30, 2025.

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standard Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. The standard was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We adopted this ASU on March 3, 2025, the date of our inception. Adoption of the new standard did not have a material impact on our financial statements.

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and

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jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently assessing the impact, if any, that ASU 2023-09 would have on its financial position, results of operations or cash flows.

The Company’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the accompanying financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2025, covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the Risk Factors section of the final prospectus in connection with the Initial Public Offering filed with the SEC on June 30, 2025, which could materially affect our business, financial condition or future results.

In light of our entry into a Business Combination Agreement during the quarter, you should also consider the transaction‑specific risks associated with the proposed Business Combination and related transactions.

Risks Related to the Business and Strategy of the Combined Company

Cronos tokens are not currently used in an operating business, which makes it difficult to evaluate the combined company’s business and future prospects, and the combined company may not be able to achieve or maintain profitability in any given period.

The Company was formed as a blank check company incorporated as a Cayman Islands exempted company with limited liability on March 3, 2025 and, subject to the conditions of the Business Combination Agreement, will domesticate into a Florida corporation at least two business days before the closing of the Business Combination. The Company has no operating history, and the volatile nature of the market price of Cronos (“CRO”), which will constitute a substantial portion of our assets, creates significant uncertainty and makes it difficult to evaluate our future prospects. The absence of a predecessor business in this transaction will also make it difficult to accurately forecast the future results of operations, which is subject to a number of uncertainties including the combined company’s ability to grow its CRO reserves per share (i.e., the amount of CRO per each fully diluted share), CRO generation per share (i.e., the incremental CRO generated per share over a certain time period) and external delegation to validator (i.e., the total CRO delegated by third-party holders to the combined company’s validator), and the market size and growth opportunities in each of the combined company’s anticipated lines of business.

We cannot guarantee the combined company’s ability to raise additional capital, or to raise additional capital on favorable terms, which may adversely impact our business and initial business strategy. See “The combined company’s ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. the combined company’s failure to raise capital when needed could harm its business, operating results and financial condition.”

Our ability to generate cash flow initially will largely be dependent on the combined company’s ability to raise capital to acquire additional CRO, to access and acquire CRO not held in exchanges, to establish and operate a Cronos validator node and staking infrastructure for delegation of CRO holdings and delegation by third parties and to carry out activities aimed at catalyzing the fusion between CRO and traditional capital markets and greater adoption of CRO. Our business strategy may not be realized as quickly as hoped, or even at all. Further, even if we achieve growth, in future periods, that growth could slow or decline for a number of reasons, including, but not limited to, CRO volatility, increased competition, digital coins that compete with and may result in a decline in utilization of CRO or replace CRO, our inability to develop, improve or effectively scale CRO acquisition, negative publicity or sentiments relating to CRO or a perceived affiliation between Crypto.com or the combined company and Cronos Labs, government regulation or the combined company’s failure, for any reason, to continue to take advantage of growth opportunities.

CRO market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. There is no assurance that any estimates driving CRO acquisition strategies will accurately reflect any particular level of revenue or growth prospects for the combined company.

We will encounter risks and difficulties as described in this section. If we do not manage these risks successfully, our business may be adversely impacted. If the combined company’s assumptions regarding these risks and uncertainties and its future growth are incorrect or change adversely, or if the combined company does not address these risks successfully, the combined company’s operating and financial results could differ materially from its expectations, and its business could suffer. If our revenue growth rate, when we are at

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a revenue generation stage, were to decline significantly or become negative, it could adversely affect our operating results and financial condition. If we are not able to achieve or maintain positive cash flow from operations, or if the price of CRO declines significantly, our business may be adversely impacted and we may require additional financing, which may not be available on favorable terms or at all, may restrict the distribution of dividends or other payments to shareholders, or may be dilutive to our shareholders.

The combined company may not be able to successfully execute its business strategies.

A significant part of the combined company’s strategy is CRO acquisition, however:

The occurrence of any of these factors could adversely affect our CRO acquisition strategy.

We also expect to carry out other CRO-related activities, such as staking our CRO holdings and establishing and operating a Cronos validator node. The combined company may in the future consider offering or engaging in other CRO-related products, services or activities. See “We expect to engage in other CRO-related activities, including participating in staking activities and operating a validator node, all of which are subject to regulation. We have not previously engaged in these business lines and we may be unable to implement our business plan, including, without limitation, due to operational challenges, significant competition and regulation.”

The combined company’s operating results, revenues and expenses may significantly fluctuate, including due to the highly volatile nature of CRO, which could have an adverse effect on the market price of the combined company’s common stock.

Our operating results will be dependent on the broader CRO economy. Due to the rapidly evolving nature of digital assets and the volatile price of CRO, which has experienced and continues to experience significant volatility, we expect that our operating results will fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader CRO economy. We expect that our operating results will fluctuate significantly as a result of a variety of factors, many of which are unpredictable and in certain instances are outside of our control, including:

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As a result of these factors, it is difficult for us to forecast growth trends accurately and our business and future prospects are difficult to evaluate, particularly in the short term.

Further, we cannot predict what further action may be taken with respect to tariffs or trade relations between the U.S. and other governments. Any such changes could fundamentally alter the competitive and regulatory landscape in which we operate, and political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets, all of which could potentially having a material adverse effect on our business, financial condition and results of operation.

In addition, the stock market and the markets for both CRO-influenced and technology companies have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies in those markets. In particular, future trading prices in the combined company’s common stock may reflect market dynamics that are not connected to valuation methods commonly associated with operating companies in similar industries or with companies engaged predominantly in passive investments in CRO or other commodities, such as exchange-traded funds (“ETFs”). Equity market capitalizations of other such

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companies are often in excess of stockholders’ equity calculated in accordance with U.S. GAAP, and in excess of valuations that might traditionally be expected based on their operating performances, cash flows and net assets. Investors may therefore be unable to assess the value of the shares of the combined company’s common stock or evaluate the risks of an investment in us using traditional or commonly used enterprise valuation methods. We cannot predict how these dynamics may evolve over time, or whether or how long they may last. These market and industry factors may significantly harm the market price of the combined company’s common stock, regardless of our actual operating performance.

Our CRO acquisition strategy exposes us to various risks associated with CRO.

Our CRO acquisition strategy exposes us to various risks associated with CRO, including, but not limited to, the following:

CRO is a highly volatile asset. The trading price of CRO significantly fluctuated during 2024 and 2025 and has traded between approximately $0.07 and $0.21 per CRO in 2024 on the Crypto.com Exchange. Volatility may continue in the future and historical trends could reverse dramatically. See “The combined company’s operating results, revenues and expenses may significantly fluctuate, including due to the highly volatile nature of CRO, which could have an adverse effect on the market price of the combined company’s common stock.” See also “We may suffer losses due to abrupt and erratic market movements.”

Our CRO holdings may significantly impact our financial results and in turn may impact the market price of the combined company’s common stock. If we continue to increase our overall holdings of CRO relative to the other parts of our business in the future, our CRO holdings will have an even greater impact on our financial results and the market price of the combined company’s common stock. We intend to purchase additional CRO and increase our overall holdings of CRO in the future.

The concentration of our CRO holdings limits the risk mitigation that we could take advantage of by purchasing a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our CRO acquisition strategy. See “The combined company’s operating results, revenues and expenses may significantly fluctuate, including due to the highly volatile nature of CRO, which could have an adverse effect on the market price of the combined company’s common stock.” See also “We may suffer losses due to abrupt and erratic market movements.”

Our CRO acquisition strategy has not been tested by us to date. While certain issuers have operating histories that involve a digital asset acquisition strategy that may be comparable to the CRO acquisition strategy the combined company intends to execute, these have not been tested over an extended period of time or under different market conditions. We will continuously examine the risks and rewards of our CRO acquisition strategy. For example, although we believe CRO, due to its fixed supply, has the potential to serve as a hedge against inflation in the long term, the short-term price of CRO declined in recent periods during which the inflation rate increased and governance proposals may result in changes to the CRO supply. Some investors and other market participants may disagree with our CRO acquisition strategy or actions we undertake to implement it. If CRO prices were to decrease or our CRO acquisition strategy otherwise proves unsuccessful, our financial condition, results of operations and the market price of the combined company’s common stock may be materially adversely impacted. See also “A significant decrease in the market value of our CRO holdings could adversely affect our ability to satisfy our financial obligations.”

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Our CRO acquisition strategy will expose us to the risk of non-performance by counterparties, whether contractual or otherwise. Risk of non-performance includes the inability or refusal of a counterparty to perform for any reason, including because of a deterioration in the counterparty’s financial condition and liquidity. Custodians, or other counterparties might fail to perform in accordance with the terms of future agreements with them, which could result in a loss of CRO, a loss of the opportunity to generate funds, or other losses. Although we will implement various measures that are designed to mitigate our counterparty risks, including by storing substantially all of the CRO in custody accounts at U.S.-based custodians that service institutions and negotiating contractual arrangements intended to establish that our property interest in custodially held CRO is not subject to claims of our custodians’ creditors, applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts. While all of our custodians are expected to be subject to regulatory regimes intended to protect customers in the event of a custodial bankruptcy, receivership or similar insolvency proceeding, no assurance can be provided that our custodially held CRO will not become part of the custodian’s insolvency estate if one or more of our custodians enters bankruptcy, receivership or similar insolvency proceedings. If our custodially held CRO were nevertheless considered to be the property of our custodians’ estates in the event that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated as a general unsecured creditor of such custodians, inhibiting our ability to exercise ownership rights with respect to such CRO and this may ultimately result in the loss of the value related to some or all of such CRO. Even if we are able to prevent our CRO from being considered the property of a custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our CRO held by the affected custodian during the pendency of the insolvency proceedings. Any such outcome could have a material adverse effect on our financial condition and the market price of the combined company’s common stock.

Our primary counterparty risk with respect to our CRO is expected to be custodian performance obligations under the custody arrangements we will enter into. Additionally, if we pursue any strategies to create income streams or otherwise generate funds using our CRO holdings, we would become subject to additional counterparty risks. Any significant non-performance by counterparties, including in particular the custodians with which we custody substantially all of our CRO, could have a material adverse effect on our business, prospects, financial condition and operating results. See “The combined company will face risks relating to the custody of its CRO, including the loss or destruction of private keys required to access our CRO and cyberattacks or other data loss relating to our CRO. If the combined company or its third-party service providers, including Crypto.com, experience a security breach or cyberattack and unauthorized parties obtain access to the combined company’s CRO, or if the combined company’s private keys are lost or destroyed, or other similar circumstances or events occur, including the ability to reverse engineer private keys, the combined company may lose some or all of its CRO and the combined company’s financial condition and results of operations could be materially adversely affected.”

The broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price and use of CRO. For example, a series of high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry, including the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, BlockFi Lending, Core Scientific, FTX Trading, Alameda Research and Genesis Global Capital, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry, including Silicon Valley Bank, Signature Bank and Silvergate Bank, the potential of SEC enforcement actions, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s Department of Business and Industry, and the filing and subsequent settlements of lawsuits by the New York Attorney General against Galaxy Digital Holdings, Genesis Global Capital, Genesis’ parent company Digital Currency Group, Inc., and former partner Gemini Trust Company, had highlighted the counterparty risks applicable to owning and transacting in digital assets. Bankruptcies, closures, liquidations and other events may impact our access to CRO and could negatively impact the adoption rate and use of CRO. Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price and use of CRO, limit the availability to us of financing collateralized by CRO or create or expose additional counterparty risks.

The broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of and use cases for, digital assets, market perception of digital assets and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing, and there may be additional risks in the future that are not possible to predict. See “CRO and other digital assets are novel assets, which will expose the combined company to significant legal, commercial, regulatory and technical uncertainty, which could materially adversely affect the combined company’s financial position, operations and prospects.”

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A significant decrease in the market value of our CRO holdings could adversely affect our ability to satisfy our financial obligations.

As part of our CRO strategy, we may incur or continue to incur additional indebtedness and other fixed charges. If our businesses do not generate cash flow in future periods sufficient to satisfy our financial obligations, including our debt and other financial obligations, we intend to fund our obligations using cash flow generated by equity or debt financings. Our ability to obtain equity or debt financing may in turn depend on, among other factors, the value of our CRO holdings, investor sentiment and the general public perception of CRO, our strategy and our value proposition. Accordingly, a significant decline in the market value of our CRO holdings or a negative shift in these other factors may create liquidity and credit risks, as such a decline or such shifts may adversely impact our ability to secure sufficient equity or debt financing to satisfy our financial obligations, including our debt and other financial obligations. These risks could materialize at times when CRO is trading below its carrying value on our most recent balance sheet or below our cost basis. As CRO will constitute a substantial part of our balance sheet, if we are unable to generate revenue from our anticipated CRO-related activities or secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell CRO to satisfy these obligations. Any such sale of CRO may have a material adverse effect on our operating results and financial condition, and could impair our ability to secure additional equity or debt financing in the future. Our inability to secure additional equity or debt financing in a timely manner, on favorable terms or at all, or to sell our CRO in amounts and at prices sufficient to satisfy our financial obligations, including our debt service obligations, could cause us to default under such obligations. Any default on our indebtedness may have a material adverse effect on our financial condition.

The combined company’s CRO holdings will be less liquid than its cash and cash equivalents and may not be able to serve as a source of liquidity for the combined company.

A substantial part of the combined company’s assets will be CRO. Historically, the CRO markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our CRO at favorable prices or at all. For example, a number of digital assets trading venues temporarily halted deposits and withdrawals in 2022. As a result, our CRO holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, CRO held by custodians, including our custodians, does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans, bonds or other capital raising transactions collateralized by our unencumbered CRO or otherwise generate funds using our CRO holdings, including in particular during times of market instability or when the price of CRO has declined significantly. If we are unable to sell our CRO, enter into additional capital raising transactions using unencumbered CRO as collateral, or otherwise generate funds using our CRO holdings, or if we are forced to sell our CRO at a significant loss, in order to meet our debt obligations, or our working capital requirements, our business and financial condition could be negatively impacted.

CRO may be subject to dilution.

The CRO tokens are distributed over time according to a defined tokenomics plan, which includes allocations for ecosystem development, community incentives and team reserves. Rewards for validators and delegators on the Cronos network are paid from these allocated pools, not from newly minted tokens. There is no assurance that proposals for issuing new CRO will be managed in a manner that maintains scarcity or long-term value, and any increase in the supply introduces significant uncertainty regarding future dilution, which could adversely affect the combined company’s business, operating results and financial condition.

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The combined company will operate in a highly competitive environment and will compete against companies and other entities with similar strategies, including, in the future, companies with significant CRO holdings and ETFs and ETPs for CRO and other digital assets, and the combined company’s business, operating results and financial condition may be adversely affected if the combined company is unable to compete effectively.

The digital assets industry is highly innovative, rapidly evolving and characterized by healthy competition, experimentation, changing customer needs, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements. We expect competition to further intensify in the future. We compete against a number of companies operating both within the United States and abroad, and both those that focus on traditional financial services and those that focus on digital asset-based services. Our main sources of competition, both now and in the future, fall into the following categories:

If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, operating results and financial condition could be adversely affected.

The range of options to gain exposure to CRO may expand in the future. If investors choose to gain such exposure through anticipated ETPs, companies with significant CRO holdings or other similar strategies, rather than shares of the combined company’s common stock, the combined company’s business, operating results and financial condition may be adversely affected.

Investors may view the combined company’s common stock as an alternative to an investment in an ETP, and choose to purchase shares of a potential spot CRO ETP instead of the combined company’s common stock. They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to CRO that is generally not subject to federal income tax at the entity level as we may be, or the other risks that may affect other parts of our business. Additionally, unlike potential spot CRO ETPs, we (i) use CRO reserves per share and CRO generation per share to measure our performance and do not seek for our shares of the combined company’s common stock to passively track the value of the underlying CRO we hold before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the Exchange Act, including Regulation M, and other securities laws, which enable ETPs to continuously align the value of their shares to the price of the underlying assets they hold through share creation and redemption, (iii) are a Florida corporation rather than a statutory trust, and do not operate pursuant to a trust agreement that would require us to pursue one or more stated investment objectives and (iv) are not required to provide daily transparency as to our CRO holdings or our daily net asset value. Furthermore, recommendations by broker-dealers to buy, hold or sell complex products and non-traditional ETPs, or an investment strategy involving such products, may be subject to additional or heightened scrutiny that would not be applicable to broker-dealers making recommendations with respect to the combined company’s common stock. Based on how we are viewed in the market relative to ETPs, and other vehicles which may, in the future, offer economic exposure to CRO, such as CRO futures ETFs, leveraged CRO futures ETFs and similar vehicles offered on international exchanges, any premium or discount in the combined company’s common stock relative to the value of our CRO holdings may increase or decrease in different market conditions.

As a result of the foregoing factors, availability of spot ETPs for CRO and other digital assets could have a material adverse effect on the market price of the combined company’s common stock.

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We may suffer losses due to abrupt and erratic market movements.

The CRO market has been characterized by significant volatility and unexpected price movements, and has previously experienced significant declines. CRO may become more volatile and less liquid in a very short period of time. As previously discussed in this section, a series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry have highlighted the counterparty risks applicable to owning and transacting in digital assets. See “The combined company’s operating results, revenues and expenses may significantly fluctuate, including due to the highly volatile nature of CRO, which could have an adverse effect on the market price of the combined company’s common stock.”

These bankruptcies, closures, liquidations and other events have created significant volatility in the markets for cryptocurrency generally. Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry in the future could result in market prices being subject to erratic and abrupt market movement, which could harm our business. Further, because there is no centralized authority which determines the price of CRO, pricing often differs between centralized exchanges and also peer-to-peer DeFi transactions; centralized exchanges allow users to deposit their digital assets to platforms that serve as intermediaries for buyers and sellers whereas decentralized exchanges allow users to make peer-to-peer cryptocurrency trades while maintaining control of their private keys. When some exchanges are viewed as higher risk, that price differential can widen as traders attempt to exploit these differences. Volatility in the price of CRO, as well as the lack of a standard price, could lead consumers to see CRO as an unsafe asset. In addition, if we were to attempt to monetize the CRO we hold on our balance sheet, such price volatility could lead to trading losses, impacting our financial position.

The trading volume of CRO typically increases during periods of extreme volatility. For example, in the days following the U.S. federal elections in November 2024, the price of CRO rose sharply from approximately $0.07 on November 4, 2024, to approximately $0.21 on November 11, 2024, and volumes increased from approximately $5.43 million to approximately $748.28 million during that time period according to aggregate data from U.S. exchange markets collected by CoinMarketCap. Such volume increases can lead to extreme pressures on trading platforms and infrastructure that can lead to inadvertent suspension of services across parts of the platforms or the entire platforms, and we may experience outages. Outages can lead to increased service expense, can cause reputational damage, result in inquiries and actions by regulators, and can lead to other damages for which we may be responsible, any of which could harm our business.

The emergence or growth of other digital assets, including those with significant private or public sector backing, including by governments, consortiums or financial institutions, could have a negative impact on the price of CRO and adversely affect the combined company’s business.

As a result of our CRO acquisition strategy, a substantial part of our assets will be concentrated in our CRO holdings. Accordingly, the emergence or growth of digital assets other than CRO may have a material adverse effect on our financial condition. There are numerous alternative digital assets and many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain platforms or digital assets that use proof-of-work mining like the Bitcoin network, a proof-of-stake model such as Ethereum or emerging variations of the foregoing consensus mechanisms.

Additionally, central banks in some countries have started to introduce digital forms of legal tender. For example, China’s central bank digital currency project was made available to consumers in January 2022, and governments have been discussing the potential creation of new central bank digital currencies. Whether or not they incorporate blockchain or similar technology, central bank digital currencies, as legal tender in the issuing jurisdiction, could also compete with, or replace, CRO and other digital assets as a medium of exchange or store of value. As a result, the emergence or growth of these or other digital assets could cause the market price of CRO to decrease, which could have a material adverse effect on our business, prospects, financial condition and operating results.

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The combined company will rely on Crypto.com, which will have an indirect controlling interest in the combined company, for certain administrative and operational services.

The combined company will rely on Crypto.com to provide certain administrative and operational services, including information technology services, legal services, intellectual property management services, treasury and risk management services, human resources services, investor relations services and other advisory services pursuant to the terms of any services agreements that may be entered into in connection with the consummation of the Business Combination. Crypto.com may have interests that are not aligned with our interests or the interests of our other shareholders and which could affect Crypto.com’s performance of services to the combined company.

In the event of a default under or termination of any services agreements that may be entered into we may be unable to contract with substitute service providers on similar terms, in a timely fashion, or at all, and the costs of substituting service providers may be substantial. In addition, a substitute service provider may not be able to provide the same level of services due to a lack of pre-existing knowledge or synergies. Any termination of our relationship with Crypto.com, or decrease in provision of services by Crypto.com, and any delay in appointing or finding a suitable replacement provider, if one exists, could adversely and negatively impact our business.

The Cronos network and its native digital asset, CRO is a relatively new technological innovation with a limited operating history.

CRO has a relatively limited history of existence and operations compared to traditional commodities. There is a limited established performance record for the price of CRO and, in turn, a limited basis for evaluating an investment in CRO. Although past performance is not necessarily indicative of future result, if CRO had a more established history, such history might (or might not) provide investors with more information on which to evaluate an investment in the combined company.

Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets, or any ability to participate in or otherwise influence a digital asset’s underlying network, could have an adverse effect on the market price of such digital asset.

A significant number of CRO may be concentrated in relatively few wallets. Moreover, it is possible that other persons or entities control multiple wallets that collectively hold a significant number of CRO, even if they individually only hold a small amount, and it is possible that some of these wallets are controlled by the same person or entity. As a result of this concentration of ownership, large sales or distributions by such holders could have an adverse effect on the market price of CRO.

Changes in the governance of a digital asset network may not receive sufficient support from users and validators, which may negatively affect that digital asset network’s ability to grow and respond to challenges.

The governance of decentralized networks, such as the Cronos network, is voluntary, decentralized and based on open participation by validators, delegators and community contributors. As a result, there may be a lack of consensus or clarity on the governance of any particular decentralized digital asset network, which may stymie such network’s utility and ability to grow and face challenges. For example, the Cronos network does not have a central authority that unilaterally determines or enforces network-wide decisions. Instead, protocol upgrades and parameter changes are implemented through on-chain proposals and validator voting, with outcomes determined by stake-weighted consensus. If a significant majority of users and validators adopt amendments to a decentralized network based on the proposals of such core developers or holders, such network will be subject to new protocols that may adversely affect the value of the relevant digital asset.

As a result of the foregoing, it may be difficult to find solutions or marshal sufficient effort to overcome any future problems, especially long-term problems, on digital asset networks.

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CRO is created and transmitted through the operations of the Cronos network, a decentralized network of computers running software built on the Cosmos SDK. If the Cronos network is disrupted or encounters any unanticipated difficulties, the value of CRO could be negatively impacted.

If the Cronos network is disrupted or encounters any unanticipated difficulties, then the processing of transactions on the Cronos network may be disrupted, which in turn may prevent the combined company from depositing or withdrawing CRO from its accounts with its custodian or otherwise effecting CRO transactions. Such disruptions could include, for example: the price volatility of CRO; the insolvency, business failure, interruption, default, failure to perform, security breach, or other problems of participants, custodians, or others; the closing of CRO trading platforms due to fraud, failures, security breaches, or otherwise; or network outages or congestion, power outages, or other problems or disruptions affecting the Cronos network.

In addition, although CRO cannot be mined, digital asset validating operations can consume significant amounts of electricity, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for validating operations. Additionally, validators may be forced to cease operations during an electricity shortage or power outage.

Congestion or delay in the Cronos network may delay purchases or sales of CRO by the combined company.

In an effort to increase the volume of transactions that can be processed on a given digital asset network, many digital assets are being upgraded with various features to increase the speed and throughput of digital asset transactions. Increased transaction volume could result in delays in the recording of transactions due to congestion in the Cronos network. Moreover, unforeseen system failures, disruptions in operations, or poor connectivity may also result in delays in the recording of transactions on the Cronos network. Any delay in the Cronos network could affect the combined company’s ability to buy or sell CRO at an advantageous price resulting in decreased confidence in the Cronos network. Over the longer term, delays in confirming transactions could reduce the attractiveness to merchants and other commercial parties as a means of payment. As a result, the Cronos network and the value of the combined company’s common stock could be adversely affected.

Validators may suffer losses due to staking, which could make the Cronos network less attractive.

Validation on the Cronos network requires CRO to be deposited (i.e., “staked”) to activate a Cronos validator node. Only the top 100 validators by delegation on the Cronos network are considered active and are eligible to receive staking rewards. If the combined company’s delegation to its validators is insufficient to be eligible for staking rewards, our business, operating results and financial condition may be adversely affected. Further, as staking activity increases on the Cronos network, the yield generated from staking rewards will decline over time. If the Cronos network source code or protocol fail to behave as expected, suffer cybersecurity attacks or hacks, experience security issues, or encounter other problems, such staked assets may be irretrievably lost. In addition, the Cronos networks dictate requirements for participation in validation activity, and may impose penalties, such as “slashing,” if the relevant activities are not performed in-line with protocol determined validator operating requirements as encoded to the underlying blockchain, such as if the staker acts maliciously on the network, “double signs” any transactions, or experience extended downtimes. If validators’ staked CRO are slashed by the Cronos network, their assets may be burnt by the network, resulting in losses to them. Any cybersecurity attacks, security issues, hacks, penalties, slashing events, or other problems could damage validators’ willingness to participate in validation, discourage existing and future validators from serving as such, and adversely impact the Cronos network’s adoption or the price of CRO. Any disruption of validation on the Cronos network could interfere with network operations and cause the Cronos network to be less attractive to users and application developers than competing blockchain networks, which could cause the price of CRO to decrease.

A disruption of the Internet may affect Cronos network operations, which may adversely affect the CRO industry and an investment in the combined company.

The Cronos network relies on the Internet. A significant disruption of Internet connectivity could disrupt the Cronos network’s functionality and operations until the disruption in the Internet is resolved. A disruption in the Internet could adversely affect an investment in the combined company or the ability of the combined company to operate. In particular, some variants of digital assets have experienced a number of denial-of-service attacks, which have led to temporary delays in block creation and digital asset transfers. Moreover, it is possible that as CRO increases in value, it may become a bigger target for hackers and subject to more frequent hacking and denial-of-service attacks.

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Digital assets are also susceptible to border gateway protocol hijacking (“BGP hijacking”). Such an attack can be a very effective way for an attacker to intercept traffic en route to a legitimate destination. BGP hijacking impacts the way different nodes are connected to one another to isolate portions of them from the remainder of the network, which could lead to a risk of the network allowing double-spending and other security issues. If BGP hijacking occurs on the Cronos network, participants may lose faith in the security of CRO, which could affect CRO’s value and consequently the value of the combined company’s Class A Common Stock.

Any future attacks that impact the ability to transfer CRO could have a material adverse effect on the price of CRO and the value of an investment in the combined company’s common stock.

The combined company will face risks relating to the custody of its CRO, including the loss or destruction of private keys required to access our CRO and cyberattacks or other data loss relating to our CRO. If the combined company or its third-party service providers, including Crypto.com Custody, experience a security breach or cyberattack and unauthorized parties obtain access to the combined company’s CRO, or if the combined company’s private keys are lost or destroyed, or other similar circumstances or events occur, including the ability to reverse engineer private keys, the combined company may lose some or all of its CRO and the combined company’s financial condition and results of operations could be materially adversely affected.

We will hold our CRO with a regulated custodian that has duties to safeguard our private keys. Generally, custodial services contracts do not restrict the ability to reallocate digital assets among custodians. However, all of the CRO that we will own will initially be held in custody accounts at Foris DAX Trust Company, LLC, a New Hampshire-chartered trust company (“Crypto.com Custody”), a digital asset custodian servicing institution. In light of the significant amount of CRO we will hold, we may seek to engage additional custodians to achieve a greater degree of diversification in the custody of our CRO as the extent of potential risk of loss is dependent, in part, on the degree of diversification. If there is a decrease in the availability of digital asset custodians that we believe can safely custody our CRO, for example, due to regulatory developments or enforcement actions that cause custodians to discontinue or limit their services in the United States, we may need to enter into agreements that are less favorable or take other measures to custody our CRO, and our ability to seek a greater degree of diversification in the use of custodial services could be materially adversely affected.

Crypto.com Custody maintains crime and specie insurance coverage, which is intended to cover the loss of client assets held in cold storage, including coverage of potential incidents involving physical loss, theft or damage, as well as coverage for potential incidents of crime or third-party theft, subject to the terms and conditions of such coverage. The insurance maintained by Crypto.com Custody is shared among all of their customers, is not specific to the combined company, and there can be no guarantee that such insurance will be available or sufficient to protect the combined company from losses with respect to our CRO holdings.

Insurance to cover losses of our future CRO holdings will likely only cover a small fraction of the value of the entirety of the CRO holdings, and there can be no guarantee that such insurance may be obtained or maintained as part of the custodial services we will have or that such coverage will cover losses with respect to our CRO. Moreover, our use of custodians exposes us to the risk that the CRO our custodians will hold on our behalf could be subject to insolvency proceedings and we could be treated as a general unsecured creditor of the custodian, inhibiting our ability to exercise ownership rights with respect to such CRO. Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage we will maintain related to our CRO.

CRO is controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet in which the CRO is held. While the Cronos network ledger requires a public key relating to a digital wallet to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the CRO held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custodians will be able to access the CRO held in the related digital wallet. Furthermore, we cannot provide assurance that our digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised as a result of a cyberattack. The Cronos network, as well as other digital assets and blockchain technologies, have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities.

Security breaches and cyberattacks are of particular concern with respect to our CRO. Blockchain-based cryptocurrencies and the entities that provide services to participants in the Cronos ecosystem have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities. For example, in October 2021 it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers. Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading Ltd. digital asset exchange and reportedly stole over $400 million in digital assets from customers. In

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2024, hackers stole an estimated total of $2.2 billion in digital assets from cryptocurrency platforms. In February 2025, $1.5 billion of digital assets was stolen from a single cryptocurrency exchange, Bybit, operated by Bybit Fintech Limited. A successful security breach or cyberattack could result in:

Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader Cronos ecosystem or in the use of the Cronos network to conduct financial transactions, which could negatively impact us.

Attacks upon systems across a variety of industries, including industries related to CRO, are increasing in frequency, persistence and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, unauthorized parties may attempt, to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time or until launched against a target and we may not be able to implement adequate preventative measures. The risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential proliferation of malware into systems unrelated to such conflicts. Any future breach of our operations or those of others in the CRO industry, including third-party services on which we rely, could materially and adversely affect our business.

Due to the nature of private keys, transactions involving CRO are irrevocable and stolen or incorrectly transferred CRO may be irretrievable. As a result, any incorrectly executed CRO transactions could adversely affect an investment in the combined company.

Transactions involving CRO are typically not reversible without the consent and active participation of the recipient of the transaction. Once a transaction has been signed with private keys, verified and recorded in a block that is added to the Cronos network, an incorrect transfer of CRO, or a theft of CRO generally will not be reversible and the combined company may not be capable of obtaining compensation for any such transfer or theft. Although the combined company’s transfers of CRO will regularly be made to or from the combined company’s accounts with its custodians, it is possible that, through computer or human error, or through theft or criminal action, the combined company’s CRO could be transferred from its accounts at its custodians in incorrect amounts or to unauthorized third parties, or to uncontrolled accounts. To the extent that the combined company is unable to successfully seek redress for such error or theft, such loss could adversely affect the value of the combined company’s common stock.

The custody of the combined company’s CRO is handled by its custodians, and the transfer of CRO to and from liquidity providers normally takes place through its custodians’ clearing services and is directed by an administrator and transfer agent. the combined company has evaluated the procedures and internal controls of its custodians to safeguard the combined company’s CRO holdings, as well as the procedures and internal controls of its administrator. However, it is possible that, through computer or human error, or through theft or criminal action, the combined company’s CRO could be transferred from its accounts at its custodians in incorrect amounts or to unauthorized third parties, or to incorrect destination addresses on the Cronos network.

Alternatively, if the custodians’ internal procedures and controls are inadequate to safeguard the combined company’s CRO holdings, and the combined company’s private key(s) is (are) lost, destroyed or otherwise compromised and no backup of the private key(s) is

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(are) accessible, the combined company will be unable to access its CRO, which could adversely affect an investment in the combined company’s common stock. In addition, if the combined company’s private key(s) is (are) misappropriated and its CRO holdings are stolen, including from or by its custodians, the combined company could lose some or all of its CRO holdings, which could adversely affect the value of the combined company’s common stock.

Such events have occurred in connection with digital assets in the past. For example, in September 2014, the Chinese digital asset exchange Huobi announced that it had sent approximately 900 Bitcoin and 8,000 Litecoin (worth approximately $400,000 at the prevailing market prices at the time) to the wrong customers. To the extent that the combined company is unable to seek a corrective transaction with such third party or is incapable of identifying the third party which has received the combined company’s CRO through error or theft, the combined company will be unable to revert or otherwise recover incorrectly transferred CRO. the combined company will also be unable to convert or recover its CRO transferred to uncontrolled accounts. To the extent that the combined company is unable to seek redress for such error or theft, such loss could adversely affect the value of the combined company’s common stock.

Our limited insurance protection exposes us and our shareholders to the risk of loss of our CRO for which no person is liable.

We do not expect to maintain insurance coverage for our CRO holdings, which will be held in custody by our custodians. Our future custodians may maintain a certain insurance coverage of such types and amounts as they assert to be commercially reasonable for their custodial services provided under our custody agreements with them, including certain commercial crime insurance of limited aggregate principal amount which covers losses stemming from fraud, security breach, hack and asset theft. However, such insurance coverage may be insufficient to protect us against all losses of our CRO holdings held in custody with our custodians, whether or not stemming from security breaches, cyberattacks or other types of unlawful activity. Therefore, a loss may be suffered with respect to our CRO that is not covered by insurance and for which no person is liable in damages, which could adversely affect our operations and, consequently, an investment in us.

The accounting treatment of our CRO holdings are likely to have significant accounting impacts, including volatility of our results. If financial accounting standards undergo significant changes, our operating results could fluctuate.

In December 2023, the FASB issued ASU 2023-08, effective for fiscal years beginning after December 15, 2024. the combined company will be required to adopt ASU 2023-08, which will require us to measure in-scope crypto assets (including our CRO holdings) at fair value in our statement of financial position, and to recognize gains and losses from changes in the fair value of our CRO in net income each reporting period. ASU 2023-08 will also require us to provide certain interim and annual disclosures with respect to our CRO holdings, with a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period in which we adopt the guidance. Due in particular to the volatility in the price of CRO, we expect the adoption of ASU 2023-08 to have a material impact on our financial results in future periods, including the volatility of our financial results, and affect the carrying value of our CRO on our balance sheet, and it could also have adverse tax consequences, which in turn could have a material adverse effect on our financial results and the market price of the combined company’s common stock.

Additionally, on March 31, 2022, the staff of the SEC issued Staff Accounting Bulletin (“SAB”) No. 121 (“SAB 121”), which represented a significant change regarding how a company safeguarding crypto assets held for its platform users reports such crypto assets on its balance sheet and required retrospective application as of January 1, 2022. In January 2025, the staff of the SEC issued SAB No. 122, which rescinds the previously issued interpretive guidance included within SAB 121.

The broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of and use cases for, digital assets, market perception of digital assets and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing, and there may be additional risks in the future that are not possible to predict. Uncertainties in or changes to regulatory or financial accounting standards could result in the need to change our accounting methods and may retroactively affect previously reported results and impair our ability to provide timely and accurate financial information, which could adversely affect our financial statements, result in a loss of investor confidence, and our business, operating results and financial condition.⁴

⁴ Note to Draft: Withum to confirm.

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CRO and other digital assets are novel assets, which will expose the combined company to significant legal, commercial, regulatory and technical uncertainty, which could materially adversely affect the combined company’s financial position, operations and prospects.

CRO and other forms of digital assets are relatively novel and have been the source of much regulatory uncertainty, resulting in differing definitional outcomes without a single unifying statement, which subjects them to significant uncertainty that could adversely impact their price.

CRO and other digital assets are viewed differently by different regulatory and standards setting organizations globally as well as in the United States on the federal and state levels. Certain governments have prohibited certain digital asset activities or have severely curtailed the use of digital assets by prohibiting the acceptance of payment in CRO and other digital assets for consumer transactions and barring banking institutions from accepting deposits of digital assets. Other nations, however, allow digital assets to be used and traded without restriction. In some jurisdictions, such as in the United States, digital assets are subject to extensive, and in some cases overlapping, unclear and evolving regulatory requirements. There is a risk that relevant authorities in any jurisdiction may impose more onerous regulation on CRO, for example banning its use, regulating its operation, or otherwise changing its regulatory treatment. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that may introduce a cost of compliance, or have a material impact on our business model, and therefore our financial performance and shareholder returns, and/or adversely affects the price of CRO. The U.S. federal government, states, regulatory agencies and foreign countries have recently enacted and may also enact additional new laws, regulations and guidance, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of CRO, the ability of individuals or institutions such as us to own or transfer CRO, and/or the competitive landscape for our products and activities. For example:

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While the current U.S. presidential administration has expressed support regarding the development and use of digital assets and the U.S. recently enacted the GENIUS Act, the specific regulatory frameworks, including the potential adoption of the CLARITY Act, are still to be developed. The exact timeline and impact of these efforts on our business is uncertain, and there is uncertainty regarding

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enforcement actions by several U.S. agencies involving digital asset issuers and trading platforms. Additionally, it is not possible to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC or other regulators, or the impact of any such additional authorities, including the authority that Congress has already granted to the banking agencies under the GENIUS Act. It is also not possible to predict how additional legislation, regulation or other form of regulatory or supervisory oversight — such as the implementing regulations under the GENIUS Act or any Senate amendments to the CLARITY Act — might impact the ability of digital asset markets to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, nor how any new regulations or changes to existing regulations might impact the value of digital assets generally and CRO specifically. We cannot be certain as to how future regulatory developments will impact the treatment of CRO under the law, and ongoing and future regulation and regulatory actions could significantly restrict or eliminate the market for or uses of CRO and materially and adversely impact our business. If we fail to comply with such additional regulatory and registration requirements, we may seek to cease certain of our operations or be subjected to fines, penalties and other governmental action. Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our business model at all, which could have a material adverse effect on our business, prospects or operations. The consequences of increased regulation of digital assets and digital asset activities could adversely affect the market price of CRO and any other digital assets we may hold or expect to hold at such time and in turn adversely affect the market price of the combined company’s common stock.

Moreover, the risks of engaging in a CRO acquisition strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

The novelty of CRO may increase the risk of employee or service provider misconduct or error, which may adversely impact the business of the combined company. Employee or service provider misconduct or error could subject us to legal liability, financial losses and regulatory sanctions and could seriously harm our reputation and negatively affect our business. Such misconduct could include engaging in improper or unauthorized transactions or activities, failing to supervise other employees or service providers, improperly using confidential information, as well as improper trading activity. Employee or service provider errors could expose us to the risk of material losses even if the errors are detected. Moreover, the risk of employee or service provider error or misconduct may be even greater for novel CRO products, services and activities which we may offer or undertake in the future. It is not always possible to deter misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. If we were found to have not met our regulatory oversight and compliance and other obligations, we could be subject to regulatory sanctions, financial penalties, restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity and seriously damage our reputation. Our employees, or any contractors and agents we may contract with, could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or result in financial liability. Further, allegations by regulatory or criminal authorities of improper trading activities could affect our brand and reputation.

The growth of the digital assets industry in general, and the use and acceptance of CRO in particular, may also impact the price of CRO and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of CRO may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to CRO, institutional demand for CRO as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for CRO as a means of payment and the availability and popularity of alternatives to CRO. Even if growth in CRO adoption occurs in the near or medium-term, there is no assurance that CRO usage will continue to grow over the long-term. In addition, private actors that are wary of CRO or the regulatory concerns associated with CRO have in the past taken, and may in the future take, further actions that may have an adverse effect on our business or the market price of the combined company’s common stock.

Because CRO has no physical existence beyond the record of transactions on the Cronos network, a variety of technical factors related to the Cronos network could also impact the price of CRO. For example, malicious attacks by validators and advances in digital computing, algebraic geometry and quantum computing could undercut the integrity of the Cronos network and negatively affect the price of CRO. The liquidity of CRO may also be reduced and damage to the public perception of CRO may occur, if financial institutions were to deny or limit banking services to businesses that hold CRO, provide CRO-related services or accept CRO as payment, which could also decrease the price of CRO. Liquidity of CRO may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for CRO and other digital assets.

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The regulatory environment for digital assets in the United States and globally remains highly uncertain and is evolving rapidly. U.S. policymakers are only beginning to define a comprehensive regulatory framework for digital assets. As a result, the combined company may face challenges in adapting to proposed or newly enacted laws and regulations, which could materially and adversely affect its business, financial condition and operations.

As crypto assets have grown in both popularity and market size, various U.S. federal, state and local and foreign governmental organizations, as well as consumer agencies and public advocacy groups, have increasingly scrutinized the operations of crypto networks, users and platforms, with a focus on how crypto assets can be used to launder the proceeds of illegal activities and fund criminal or terrorist enterprises. In addition, the safety and soundness of platforms and other service providers that hold crypto assets for users have drawn regulatory and public attention. These concerns have led to calls for heightened regulatory oversight, and new laws and regulations.

Unlike traditional financial institutions, which have cultivated long-standing relationships with policymakers and regulators, participants in the cryptoeconomy are relatively new to the U.S. legislative and regulatory landscape. While engagement with policymakers and regulators has begun, it is still at a relatively nascent stage and may be insufficient to influence future legislation and regulation. As a result, new laws and regulations may be proposed and adopted in the United States and internationally, or existing laws and regulations may be interpreted in new ways, that adversely affect the cryptoeconomy or crypto asset platforms. Consequently, the combined company may be disproportionately impacted by such developments, potentially restricting its ability to operate or innovate. Additionally, any future political activities to further our mission may be perceived unfavorably by investors and the public and have an adverse impact on our brand and reputation.

As also noted above, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illicit activities, fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to ongoing war between Russia and Ukraine. If we are found to have purchased any of our CRO from bad actors that have used CRO to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in CRO by us may be restricted or prohibited.

Additional laws, guidance and policies may be issued by domestic and foreign regulators following the bankruptcy of FTX Trading Ltd., one of the world’s largest cryptocurrency exchanges, in November 2022, which has been widely cited as a catalyst for increased regulatory and enforcement focus on the digital assets industry and certain market participants and practices. Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting CRO, as well as enforcement actions involving or impacting our trading venues, counterparties and custodians, may impose significant compliance and other costs on the combined company, significantly limit our ability to hold and transact in CRO or materially reduce the value of the combined company’s CRO holdings.

CRO’s status as a product that may be offered and sold as a “security” in any relevant jurisdiction, as well as the status of CRO-related products and activities in general, is subject to uncertainty, and if the combined company is unable to properly characterize such products or activities, the combined company may be subject to regulatory scrutiny, inquiries, investigations, fines and other penalties, which may adversely affect the combined company’s business, operating results and financial condition.

The SEC and its staff have taken the position that a range of crypto assets, products, services and activities fall within the definition of an investment contract that is offered or sold as a “security” under the U.S. federal securities laws. The legal test for determining whether any given crypto asset, product or service that is offered and sold is an investment contract was set forth in the 1946 U.S. Supreme Court case SEC v. W.J. Howey Co. and requires a highly complex, fact-driven analysis. Accordingly, whether any given crypto asset, product or service that would be ultimately determined to be offered and sold as a security is uncertain and difficult to predict notwithstanding the conclusions of the SEC or any conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular crypto asset, product or service could be deemed to be offered and sold as a “security” or “securities offering” under applicable laws. It is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the approach to enforcement by the SEC and its staff.

Public statements made by previous senior officials at the SEC suggest that the SEC does not intend to take the position that CRO (as currently offered and sold) is a “security” under the U.S. federal securities laws. As of the date of this quarterly report, with the exception of certain centrally issued digital assets that have received “no-action” letters from the SEC staff, CRO is expected to be considered a crypto asset which senior officials at the SEC are unlikely to consider a “security.” However, such statements are not official policy

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statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other crypto asset. In addition, the SEC and courts have taken the position that a crypto asset that is not itself a security can be offered and sold in securities transactions, which carry many of the same regulatory risks and consequences summarized above. For example, the SEC has taken the position that yield, lending products, services or protocols can constitute the offer and sale of security even if the underlying crypto asset is not a security.

Any enforcement action by the SEC or any international or state securities regulator asserting that CRO is a “security,” or a court decision to that effect, would be expected to have an immediate material adverse impact on the trading value of CRO, as well as our business. This is because the business models behind most crypto assets are incompatible with regulations applying to transactions in securities. If a crypto asset is determined or asserted to be a “security,” it is likely to become difficult or impossible for the crypto asset to be traded, cleared or custodied in the United States and elsewhere through the same channels used by non-security crypto assets, which in addition to materially and adversely affecting the trading value of the crypto asset is likely to significantly impact its liquidity and market participants’ ability to convert the crypto asset into U.S. dollars and other currencies.

Several foreign jurisdictions have taken a broad-based approach to classifying crypto assets, products and services that are being offered or sold as “securities,” while other foreign jurisdictions have adopted a narrower approach. As a result, certain crypto assets, products or services, including those relating to CRO, may be determined to be offered and sold as a “security” under the laws of some jurisdictions but not others. Various foreign jurisdictions may, in the future, adopt additional laws, regulations or directives that affect the characterization of crypto assets, products or services that are offered or sold as “securities.”

The classification of a crypto asset, product or service that is offered and sold as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale, trading and clearing, as applicable, of such assets, products or services. For example, a crypto asset, product or service that is offered and sold as a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in crypto assets, products or services that are offered or sold as securities in the United States may be subject to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers to trade crypto assets that are offered or sold as securities in the United States are generally subject to registration as national securities exchanges, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system (“ATS”) in compliance with rules for ATSs. Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing agency. Foreign jurisdictions may have similar licensing, registration and qualification requirements.

In its initial business activities, which will constitute actively accumulating CRO, establishing and operating a Cronos validator node and undertaking staking activities, the combined company does not plan to offer or sell CRO as “investment contracts” or otherwise as a “security.” the combined company is not registered or licensed with the SEC or foreign authorities as a broker-dealer, national securities exchange or ATS (or foreign equivalents), and we believe that CRO in itself or as a result of the manner in which we intend to purchase or sell CRO in our business activities, is not a security (including based on prior statements by a number of SEC senior officials). However, statements, settlements and enforcement actions are not rules or regulations of the SEC and are not binding on the SEC. Regardless of public statements made by senior officials at the SEC and our conclusions, we could in the future be subject to legal or regulatory action in the event the SEC or a state or a foreign regulatory authority were to assert, or a court were to determine, that either CRO itself or a product, service or activity that we may offer, sell, or engage in the future related to CRO could be viewed a “security” under applicable laws. There can be no assurance that we will properly characterize over time any given CRO product or service that is offered and sold as a security or non-security, or that the SEC, foreign regulatory authority or a court having final determinative authority on the topic, if the question was presented to it, would agree with our assessment. We expect our risk assessment policies and procedures to continuously evolve to take into account case law, legislative developments, facts and developments in technology.

If an applicable regulatory authority or a court, in either case having final determinative authority on the topic, were to determine that a product or service that is offered or sold by us in the future is a security, we would not be able to offer such product or service until we are able to do so in a legally compliant manner. A determination by the SEC, a state or foreign regulatory authority, or a court that a product or service that is offered or sold constitutes a security may result in us ceasing to offer that product or service, and may also result in us determining that it is advisable to cease offering products and services or engaging in certain activities entirely, that have similar characteristics to the product or service that was alleged or determined to be a security. Alternatively, we may determine to continue to offer certain future products or services even if the SEC or another regulator alleges that the product or service is offered or sold as a security, pending a final judicial determination as to that product or service’s proper characterization, and the fact that we

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waited for a final judicial determination would generally not preclude penalties or sanctions against us for our having previously made that product or service available without registering that product or service with the SEC. As such, we could be subject to judicial or administrative sanctions for failing to offer or sell the product or service in compliance with the registration requirements, or for acting as a broker, dealer or national securities exchange without appropriate registration. Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines and disgorgement, criminal liability, and reputational harm. Additionally, the SEC has brought and may in the future bring enforcement actions against other cryptoeconomy participants and their product offerings and services that may cause us to modify or discontinue a product offering or service. If we were to modify or discontinue any future product offering or service for any reason, our decision may be unpopular with users, may reduce our ability to attract and retain customers (especially if similar products or services continue to be offered by our competitors), and may adversely affect our business, operating results and financial condition.

Regulatory changes classifying CRO as a “security” could lead to the combined company’s classification as an “investment company” under the Investment Company Act and could adversely affect the market price of CRO and the market price of shares of the combined company’s common stock.

While senior SEC officials have stated their view that most crypto assets are not “securities” for purposes of the U.S. federal securities laws, a contrary determination by the SEC could lead to our classification as an “investment company” under the Investment Company Act, which would subject us to significant additional regulatory controls that could have a material adverse effect on our business and operations and may also require us to substantially change the manner in which we conduct our business.

In addition, if CRO is determined to constitute a security for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price of CRO and in turn adversely affect the market price of shares of the combined company’s common stock. For additional information on the additional requirements, we would be required to meet if we were determined to be an investment company, see “If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete the Business Combination.”

The combined company will not be subject to the same legal and regulatory obligations, including certain compliance and reporting obligations intended to protect investors, that apply to investment companies such as mutual funds and ETFs, or to obligations applicable to investment advisers.

Mutual funds, ETFs and their directors and management are subject to extensive regulation as “investment companies” and “investment advisers” under U.S. federal and state law; this regulation is intended for the benefit and protection of investors.

We believe we are currently not subject to and, following the consummation of the Business Combination, will not be subject to, and do not otherwise voluntarily comply with, these laws and regulations. Consequently, shareholders of the combined company do not have the regulatory protections provided to shareholders in registered and regulated investment companies, which, for example, require investment companies to have a certain percentage of disinterested directors and regulate the relationship between the investment company and certain of its affiliates. Further, the combined company may hold or trade in commodity futures contracts in order to hedge its CRO holdings. A futures contract, which is a type of derivative, is subject to the risk of loss caused by unanticipated market movements, which are potentially unlimited. In addition, there may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes, and there may at times not be a liquid secondary market for certain futures contracts leading to the possible inability to sell or close out a futures contract at the desired time or price. Commodity futures are regulated by the Commodity Exchange Act, as administered by the CFTC. Additionally, under the CEA, the CFTC has broad enforcement authority to police market manipulation and fraud in spot digital assets markets in which we may transact. Beyond instances of fraud or manipulation, the CFTC generally does not oversee cash or spot market exchanges or transactions involving digital asset commodities that do not utilize margin, leverage, or financing, although the passage of the CLARITY Act may provide the CFTC with primary regulatory oversight authority over spot digital commodities. We do not believe that we are a commodity pool for purposes of the Commodity Exchange Act. Consequently, shareholders will not have the regulatory protections provided to shareholders in Commodity Exchange Act-regulated instruments or commodity pools.

This means, among other things, that the execution of or changes to our CRO acquisition and management strategy, our use of leverage, the manner in which our CRO is custodied, our ability to engage in transactions with affiliated parties and our operating and investment activities generally are not subject to the extensive legal and regulatory requirements and prohibitions that apply to investment companies

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and investment advisers. For example, although a significant change to our CRO acquisition strategy would require the approval of the combined company Board, no shareholder or regulatory approval would be necessary. Consequently, the combined company Board has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect of our CRO holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding CRO.

The combined company will be subject to laws, regulations, and executive orders regarding economic and trade sanctions, anti-bribery, anti-money laundering (“AML”), and counter-terrorism financing that could impair our ability to compete in international markets or subject us to criminal or civil liability if we violate them. As the combined company continues to expand and localize its international activities, its obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions will increase and we may be subject to investigations and enforcement actions by U.S. and non-U.S. regulators and governmental authorities.

As the combined company expands and localizes its international activities, it will become increasingly obligated to comply with the laws, rules, regulations, policies, and legal interpretations both of the jurisdictions in which it will operate and those into which it will offer services on a cross-border basis. Laws regulating financial services, the internet, mobile technologies, digital assets, and related technologies outside the United States often impose different, more specific, or even conflicting obligations, as well as broader liability.

The combined company will be required to comply with applicable U.S. economic and trade sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), as well as similar requirements in other jurisdictions. The OFAC regulations and requirements generally restrict dealings by persons subject to U.S. jurisdiction with certain countries, or subnational territories that are the target of comprehensive sanctions, which currently are Cuba, Iran, and North Korea, as well as Crimea, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic regions of Ukraine. In addition, OFAC restricts dealings by persons subject to U.S. jurisdiction with specific individuals and entities that are the subject of targeted sanctions, including persons identified on blocked persons lists.

The combined company will also be subject to various AML and counter-terrorism financing laws and regulations around the world that prohibit, among other things, our involvement in transferring the proceeds of criminal activities. In the United States, many of our activities will be subject to AML laws and regulations, including the Bank Secrecy Act of 1970 (the “BSA”) and other similar laws and regulations. The BSA, among other things, requires money transmitters to develop and implement risk-based AML programs; to report large cash transactions and suspicious activity; and, in some cases, to collect and maintain information about customers who use their services and maintain other transaction records. Regulators in the United States and globally continue to increase their scrutiny of compliance with these obligations, which may require us to further revise or expand our compliance program, including the procedures we use to verify the identity of our customers and to monitor transactions on our system, which would include payments to persons outside the United States. Regulators regularly reexamine the transaction volume thresholds at which we must obtain and keep applicable records or verify identities of customers. Any change in such thresholds could result in greater costs for compliance. We also could be subject to potentially significant fines, penalties, inquiries, audits, investigations, enforcement actions, and criminal and civil liability if regulators or third-party auditors identify gaps in our AML program that are not sufficiently remediated, or if our AML program is found to violate the BSA.

Despite our efforts to comply with applicable laws and regulations, there can be no guarantee that regulators and/or law enforcement will view these measures as compliant with the BSA or U.S. sanctions laws and regulations. If regulators and/or law enforcement find that we have violated the BSA or U.S. sanctions laws and regulations, or we are otherwise the subject of government investigations for alleged violations of the BSA or U.S. sanctions laws and regulations, such investigations and alleged violations could result in negative consequences for us, including costs related to government investigations, financial penalties, and harm to our reputation. The impact on us related to these matters could be substantial. Although we will implement controls and screening tools designed to prevent violative activity, there is no guarantee that we will not inadvertently provide our products and services to individuals, entities, or governments in violation of the BSA or U.S. sanctions laws and regulations.

Regulators worldwide frequently study each other’s approaches to the regulation of the blockchain technology and digital assets. Consequently, developments in any jurisdiction may influence other jurisdictions. Further, new developments in one jurisdiction may be extended to additional services and other jurisdictions. As a result, the risks created by any new law or regulation in one jurisdiction are magnified by the potential that they may be replicated in another jurisdiction, which in turn would affect our business across multiple jurisdictions and/or across our services and products. Conversely, if regulations diverge worldwide, we may face difficulty adjusting our products, services, and other aspects of our business with the same effect. These risks are heightened as we face increased

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competitive pressure from other similarly situated businesses that engage in regulatory arbitrage to avoid the compliance costs associated with regulatory changes.

We may operate our business in foreign countries where companies often engage in business practices that are prohibited by the U.S. and other jurisdictions’ regulations applicable to us. We are subject to anti-corruption laws and regulations, including the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”) and other laws that prohibit the making or offering of improper payments to foreign government officials and political figures, including anti-bribery provisions enforced by the U.S. Department of Justice and the SEC. The FCPA, for example, prohibits U.S. persons and entities from making improper payments or offers of payments to foreign governments and their officials and political parties by the United States and other business entities for the purpose of obtaining or retaining business. We have implemented policies, procedures, systems, and controls designed to identify and address potentially impermissible transactions under such laws and regulations. However, there can be no assurance that all of our employees, consultants, and agents—including those that may be based in or from countries where practices that violate U.S. or other laws may be customary—will not take actions in violation of our policies, for which we may be ultimately responsible.

The complexity of U.S. federal and state and international regulatory and enforcement regimes, coupled with the global scope of our operations and the evolving global regulatory environment, could result in a single event prompting a large number of overlapping investigations and proceedings by multiple government authorities in different jurisdictions. Furthermore, due to the uncertain application of existing laws and regulations, it may be that, despite our regulatory and legal analysis concluding that certain products and services are currently unregulated or fit within a particular category of regulatory activities, such products or services may indeed be subject to financial regulation, licensing, or authorization obligations that we have not obtained or with which we have not complied. As a result, we are at a heightened risk of enforcement action, litigation, and regulatory and legal scrutiny, which could lead to sanctions, cease-and-desist orders, or other penalties and censures. Any of the foregoing could, individually or in the aggregate, have a material adverse effect on our business, results of operations, financial condition, and prospects.

Due to the unregulated nature and lack of transparency surrounding the operations of many CRO trading venues, CRO trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in CRO trading venues and adversely affect the value of the combined company’s CRO holdings.

CRO trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many CRO trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in CRO trading venues, including prominent exchanges that handle a significant volume of CRO trading and/or are subject to regulatory oversight, in the event one or more CRO trading venues cease or pause for a prolonged period the trading of CRO or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

The SEC has also brought actions against individuals and digital asset market participants alleging such persons artificially increased trading volumes in certain digital assets through wash trades, or repeated buying and selling of the same assets in fictitious transactions to manipulate their underlying trading price. Any actual or perceived false trading in the CRO market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of our CRO. Negative perception, a lack of stability in the broader CRO markets and the closure, temporary shutdown or operational disruption of CRO trading venues, lending institutions, institutional investors, validators, custodians or other major participants in the Cronos ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other reason, may result in a decline in confidence in CRO and the broader Cronos ecosystem and greater volatility in the price of CRO. For example, in 2022, each of Celsius Network, Voyager Digital, Three Arrows Capital, FTX Trading Ltd., and BlockFi filed for bankruptcy, following which the market prices of Bitcoin and other digital assets significantly declined. The SEC also alleged as part of its June 5, 2023, complaint that Binance Holdings Ltd. committed strategic and targeted “wash trading” through its affiliates to artificially inflate the volume of certain digital assets traded on its exchange. In addition, in June 2023, the SEC announced enforcement actions against Coinbase, Inc., and Binance Holdings Ltd., two providers of large trading venues for digital assets, which similarly was followed by a decrease in the market price of Bitcoin and other digital assets. These were followed in November 2023, by an SEC enforcement action against Kraken, another large trading venue for digital assets. While the current U.S. presidential administration has dismissed these enforcement actions, it is uncertain when or whether new enforcement actions may be brought. The price of the combined company’s common stock may be affected by the value of our CRO holdings and the failure of a major participant in the Cronos ecosystem could have a material adverse effect on the market price of the combined company’s common stock.

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The combined company’s compliance and risk management methods might not be effective and may result in outcomes that could adversely affect the combined company’s reputation, operating results and financial condition.

Our ability to comply with applicable complex and evolving laws, regulations and rules will be largely dependent on the establishment, maintenance and scaling of our compliance, internal audit and reporting systems, as well as our ability to attract and retain qualified compliance and other risk management personnel. We cannot assure you that our policies and procedures will always be effective or that we have been and will always be successful in monitoring or evaluating the risks to which we are or may be exposed in all market environments or against all types of risks, including unidentified or unanticipated risks. Our risk management policies and procedures are expected to rely on a combination of technical and human controls and supervision that are subject to error and failure. Some of our methods for managing risk are discretionary by nature and are based on internally developed controls and observed historical market behavior, and also involve reliance on standard industry practices. Accordingly, in the future, we may identify gaps in such policies and procedures or existing gaps may become higher risk, and may require significant resources and management attention. Our risk management policies and procedures also may not adequately prevent losses due to technical errors if our testing and quality control practices are not effective in preventing failures. In addition, we may elect to adjust our risk management policies and procedures to allow for an increase in risk tolerance, which could expose us to the risk of greater losses.

Any potential regulators who may have jurisdiction over us, including in the future, may periodically review our compliance program, including our policies and procedures, and with applicable law. We may from time to time receive examination reports citing violations of applicable law and inadequacies in existing compliance programs requiring us to enhance certain practices with respect to our practices or compliance program, including due diligence, training, monitoring, reporting and recordkeeping. If we fail to comply with these, or do not adequately remediate certain findings, regulators and financial institution partners could take a variety of actions that could impair our ability to conduct our business, including, but not limited to, delaying, denying, withdrawing or conditioning approval of certain products, services and activities. In addition, regulators have broad enforcement powers to censure, fine, issue cease and desist orders, that may prohibit us from engaging in some of our business activities, or revoke any licenses we may obtain in the future. We face significant intervention by regulatory authorities, including extensive auditing and surveillance activities, and will continue to face the risk of significant intervention by regulatory authorities and potential future financial institution partners in the future. In the case of non-compliance or alleged non-compliance, we could be subject to investigations and proceedings that may result in substantial penalties or civil lawsuits, including by customers, for damages, which can be a significant loss to us or our financial institution partner(s). Any of these outcomes would adversely affect our reputation and brand and our business, operating results and financial condition. Some of these outcomes could adversely affect our ability to conduct our business.

We expect to engage in other CRO-related activities, including participating in staking activities and operating a validator node, all of which are subject to regulation. We have not previously engaged in these business lines and we may be unable to implement our business plan, including, without limitation, due to operational challenges, significant competition and regulation.

We expect to engage in other CRO-related activities, which may be subject to regulation. We have not previously engaged in these CRO related activities and we may be unable to implement our business plan, including, without limitation, due to operational challenges, significant competition and regulation. We may also incur indebtedness or enter into other financial instruments in the future that may be collateralized by our CRO holdings or pursue other strategies to create income streams or otherwise generate funds using our CRO holdings. These offerings are expected to be highly regulated, any failure to obtain or maintain necessary money transmission, banking services and/or virtual currency business activity registrations and licenses, or comply with any applicable laws, rules and regulations could adversely affect our ability to offer these services. See “CRO’s status as a product that may be offered and sold as a “security” in any relevant jurisdiction, as well as the status of CRO-related products and activities in general, is subject to uncertainty, and if the combined company is unable to properly characterize such products or activities, the combined company may be subject to regulatory scrutiny, inquiries, investigations, fines and other penalties, which may adversely affect the combined company’s business, operating results and financial condition.” Regulators and payment processors have historically taken actions relating to access to banking services. Heightened scrutiny by regulators could be detrimental to our long-term strategy and failure to comply with regulators during and after our engagement in such activities could damage our brand, reputation, business, operating results and financial condition.

Further, we have not previously engaged in such CRO-related products or activities, and we may be unable to implement a business strategy to successfully deliver these services. We cannot guarantee our success to deliver these services. However, if we fail to keep pace with rapid industry changes to provide new and innovative products and services, and are unable to offer such financial services to generate revenue, this could adversely impact our business, operating results and financial condition. The further development and acceptance of cryptocurrency networks and other cryptocurrencies financial services, which represent a new and rapidly changing

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industry, are subject to a variety of factors that are difficult to predict and evaluate. Conversely, the slowing or stopping of the development or acceptance of digital asset systems may also adversely affect our ability to implement this business strategy.

Even if we are able to expand our operations to include additional CRO-related products, services or activities, we cannot guarantee that we will convince future customers to use these products or services, or that any future activities would be fruitful. If our future customers decrease their level of engagement with our products, services and platform, our business, operating results and financial condition may be significantly harmed.

The combined company may be unable to recognize the economic benefit of a “fork” or an “airdrop,” which could adversely impact an investment in CRO.

The primary digital asset to be held by the combined company will be CRO.

From time to time, the combined company may come into possession of, acquire, or otherwise establish dominion and control over, digital assets or other assets or rights, or be entitled to acquire any of the foregoing, incidental to the combined company’s ownership of CRO and that arise without any action of the combined company (“Incidental Rights,” and such digital assets, other assets and rights “IR Virtual Currency”). Incidental Rights can arise in a number of ways, including a fork in the Cronos network or an airdrop to holders of CRO (each described below). The combined company may elect not to take advantage of such Incidental Rights, or may be unable to do so, or may irrevocably abandon the Incidental Rights or IR Virtual Currency, even if this may be economically detrimental to the combined company.

Network Forks.

CRO, along with many other digital assets, are open-source projects. As a result, any individual can propose modifications or improvements through one or more software upgrades that could alter the protocol layer of the Cronos network. In most cases, when a modification is proposed, a substantial majority of users and validators consent to the modification, especially if the new version would be incompatible with the then-current version. However, when a substantial majority of users and validators do not consent to the proposed modified version, the result is a “hard fork” with two incompatible networks and two incompatible digital assets. In other words, two incompatible networks would then exist: (1) one network running the pre-modified software and (2) another network running the modified software. The effect of such a fork would be the existence of two versions of the network running in parallel, yet lacking interchangeability. This is in contrast to a “soft fork,” or a proposed modification to the software governing the network that results in a post-update network that is compatible with the network as it existed prior to the update, because it restricts the network operations that can be performed after the update.

Forks can occur for other reasons as well. For example, after a significant security breach, stakeholders on the network could elect to “fork” the network to its state before the hack, effectively reversing the hack. A fork could also be introduced unintentionally through a software bug or network activity.

Significant forks are typically announced several months in advance. The circumstances of each fork are unique, and their relative significance varies. It is possible that a particular fork may result in a significant disruption to CRO and, potentially, may result in broader market disruption should pricing become difficult following the fork. It is not possible to predict with accuracy the impact that any anticipated fork could have or for how long any resulting disruption may exist.

Forks may have a detrimental effect on the value of CRO, including by negatively affecting cryptocurrency allocations or by failing to capture of the full value of the newly-forked CRO if it is excluded from the CROUSD_RR index. Forks can also introduce new security risks. For example, forks may result in “replay attacks,” or attacks in which transactions from one network were rebroadcast to nefarious effect on the other network. For example, when the Ethereum and Ethereum Classic networks split in July 2016 due to a permanent hard fork (resulting in two different versions of the Ethereum blockchain), replay attacks, in which transactions from one network were rebroadcast to nefarious effect on the other network, plagued Ethereum exchanges through at least October 2016. An Ethereum exchange announced in July 2016 that it had lost 40,000 Ethereum Classic, worth about $100,000 at that time, as a result of replay attacks.

A hard fork may adversely affect the price of CRO at the time of announcement or adoption. For example, the announcement of a hard fork could lead to increased demand for the pre-fork digital asset, in anticipation that ownership of the pre-fork digital asset would entitle holders to a new digital asset following the fork. The increased demand for the pre-fork digital asset may cause the price of the digital

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asset to rise. After the hard fork, it is possible the aggregate price of the two versions of the digital asset running in parallel would be less than the price of the digital asset immediately prior to the fork. While the combined company will determine which network is generally accepted as the Cronos network and should therefore be considered the appropriate network for the combined company’s purposes, there is no guarantee that the combined company will choose the network and the associated digital asset that is ultimately the most valuable fork. Either of these events could therefore adversely impact the value of the shares of the combined company’s common stock.

If CRO were to fork into two digital assets, the combined company may hold, in addition to its existing CRO balance, a right to claim an equivalent amount of the new “forked” asset following the hard fork. However, the CROUSD_RR index does not track forks involving CRO. The holder of CRO has no discretion in a hard fork; it merely has the right to claim the new CRO on a pro rata basis while it continues to hold the same number of CRO.

Crypto.com Custody, which will be the custodian of the combined company’s CRO, retains the right, in its sole discretion, to determine whether or not to support (or cease supporting) a forked network. The outcome of such decisions by Crypto.com Custody may impact the price of the combined company’s common stock.

Airdrops.

Owners of CRO may also become subject to an “airdrop.” In an airdrop, the promotors of a different digital asset, typically one that is newly launched, will send that digital asset to the wallet of holders of an existing digital asset for no charge. Airdrops are not always announced and while in some cases the wallet owner needs to take a step to “claim” the new digital asset, in other cases, the wallet owner possesses the new digital asset without taking any actions. For example, in March 2017, the promoters of Stellar Lumens announced that anyone that owned Bitcoin as of June 26, 2017, could claim, until August 27, 2017, a certain amount of Stellar Lumens. Airdrops are not included in the CROUSD_RR index under its current methodology. the combined company may or may not participate in airdrops.

If the combined company notifies Crypto.com Custody in writing of an upcoming airdrop, it may, among other actions, elect to: (i) custody the airdropped digital asset for an additional fee or (ii) not pursue obtaining the airdropped digital assets. The outcome of such decisions by Crypto.com Custody may impact the price of the combined company’s common stock.

In the ordinary course of business managing its CRO holdings as a CRO treasury company, the combined company may purchase CRO through spot markets which may be exposed to fraud and market manipulation, including through front running and wash trading, which may adversely affect the value of the shares of the combined company’s common stock.

The blockchain infrastructure could be used by certain market participants to exploit arbitrage opportunities through schemes such as front-running, spoofing, pump-and-dump and fraud across different systems, platforms or geographic locations. As a result of reduced oversight, these schemes may be more prevalent in digital asset markets than in the general market for financial products.

The SEC has identified possible sources of fraud and manipulation in the digital asset markets generally, including, among others (1) “wash trading”; (2) persons with a dominant position in a digital asset manipulating the digital asset’s pricing; (3) hacking of the digital asset’s network and trading platforms; (4) malicious control of the digital asset network; (5) trading based on material, non-public information (for example, plans of market participants to significantly increase or decrease their holdings in the digital assets, new sources of demand for the digital asset, etc.) or based on the dissemination of false and misleading information; (6) manipulative activity involving purported “stablecoins”; and (7) fraud and manipulation at digital asset trading platforms. The effect of potential market manipulation, front-running, wash-trading, and other fraudulent or manipulative trading practices may inflate the volumes actually present in the digital asset markets and/or cause distortions in price, which could adversely affect the combined company or cause losses to its shareholders.

In the ordinary course of business managing its CRO holdings as a CRO treasury company, the combined company may purchase CRO through spot markets. Over the past several years, some digital asset trading platforms and spot markets have been closed or faced issues due to fraud and manipulative activity, business failure or security breaches. In many of these instances, the customers of such digital asset trading platforms and spot markets were not compensated or made whole for the partial or complete losses of their account balances in such digital asset trading platforms.

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For instance, in 2022, there were reports claiming that more than half of Bitcoin trading volume on digital asset exchanges was fake. Such reports alleged that certain overseas exchanges have displayed suspicious trading activity suggestive of a variety of manipulative or fraudulent practices. Other academics and market observers have put forth evidence to support claims that manipulative trading activity has occurred on certain Bitcoin exchanges. For example, in a 2017 paper titled “Price Manipulation in the Bitcoin Ecosystem” sponsored by the Interdisciplinary Cyber Research Center at Tel Aviv University, a group of researchers used publicly available trading data, as well as leaked transaction data from a 2014 Mt. Gox security breach, to identify and analyze the impact of “suspicious trading activity” on Mt. Gox between February and November 2013, which, according to the authors, caused the price of Bitcoin to increase from around $150 to more than $1,000 over a two-month period. In August 2017, it was reported that a trader or group of traders nicknamed “Spoofy” was placing large orders on Bitfinex without actually executing them, presumably in order to influence other investors into buying or selling by creating a false appearance that greater demand existed in the market. In December 2017, an anonymous blogger (publishing under the pseudonym Bitfinex’d) cited publicly available trading data to support his or her claim that a trading bot nicknamed “Picasso” was pursuing a paint-the-tape-style manipulation strategy by buying and selling Bitcoin and Bitcoin cash between affiliated accounts in order to create the appearance of substantial trading activity and thereby influence the price of such assets.

The potential consequences of a spot market’s failure or failure to prevent market manipulation could adversely affect the value of the shares of the combined company’s common stock. Any market abuse, and a loss of investor confidence in CRO, may adversely impact pricing trends in CRO markets broadly, as well as an investment in shares of the combined company’s common stock.

The price of CRO on available spot markets may be exposed to wash trading.

Spot markets on which CRO trades, through which the combined company may purchase CRO, may be susceptible to wash trading. Wash trading occurs when offsetting trades are entered into for other than bona fide reasons, such as the desire to inflate reported trading volumes. Wash trading may be motivated by non-economic reasons, such as a desire for increased visibility on popular websites that monitor markets for digital assets so as to improve their attractiveness to investors who look for maximum liquidity, or it may be motivated by the ability to attract listing fees from token issuers who seek the most liquid and high-volume exchanges on which to list their coins. Results of wash trading may include unexpected obstacles to trade and erroneous investment decisions based on false information.

Even in the United States, there have been allegations of wash trading even on regulated venues. Any actual or perceived false trading in the digital asset exchange market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of CRO and/or negatively affect the market perception of CRO.

To the extent that wash trading either occurs or appears to occur in spot markets on which CRO trades, investors may develop negative perceptions about CRO and the digital assets industry more broadly, which could adversely impact the price CRO and, therefore, the price of shares of the combined company’s common stock. Wash trading also may place more legitimate digital asset exchanges at a relative competitive disadvantage.

The price of CRO on available spot markets may be exposed to front-running.

Spot markets on which CRO trades, through which the combined company may purchase CRO, may be susceptible to “front-running,” which refers to the process when someone uses technology or market advantage to get prior knowledge of upcoming transactions. Front-running is a frequent activity on centralized as well as decentralized exchanges. By using bots functioning on a millisecond-scale timeframe, bad actors are able to take advantage of the forthcoming price movement and make economic gains at the cost of those who had introduced these transactions. The objective of a front runner is to buy a chunk of tokens at a low price and later sell them at a higher price while simultaneously exiting the position. Front-running happens via manipulations of gas prices or timestamps, also known as slow matching. To extent that front-running occurs, it may result in investor frustrations and concerns as to the price integrity of digital asset exchanges and digital assets more generally.

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If the digital asset award or transaction fees for recording transactions on the Cronos network are not sufficiently high to incentivize validators may demand high transaction fees, which could negatively impact the value of CRO and the value of the combined company’s common stock.

During the course of the block validation processes, validators exercise the discretion to select which transactions to include within a block and in what order to include these transactions. Beyond the standard block reward and transaction fees, validators have the ability to extract what is known as Maximal Extractable Value (“MEV”) by strategically choosing, reordering, or excluding certain transactions during block production in return for increased transaction fees or other forms of revenue for such validators. In blockchain networks that facilitate DeFi protocols in particular, such as the Cronos network, users may attempt to gain an advantage over other users by offering additional fees to validators for effecting the order or inclusions of transactions within a block. Certain software solutions, such as MEV Boost by Flashbots, have been developed which facilitate validators and other parties in the ecosystem in capturing MEV. The presence of MEV may incentivize associated practices such as sandwich attacks or front running that can have negative repercussions on DeFi users. A “sandwich attack” is executed by placing two transactions around a large, detected transaction to capitalize on the expected price impact. For instance, a market participant might identify a sizable transaction within the mempool that will significantly alter an asset’s price on a decentralized exchange. The participant could then, for example, orchestrate a transaction bundle: one transaction to acquire the asset prior to the detected transaction, followed by the large transaction itself, and a final transaction to sell the asset after the market price has increased due to the large transaction’s execution. Such transaction bundles can be submitted to validators through mechanisms like MEV-Boost, with validators receiving a share of the profits as an incentive to include the specific transaction bundle in the block. In the context of MEV, “front running” is said to occur when a user spots a transaction in the publicly visible so-called memory pool (“mempool”) of pending but unexecuted transactions awaiting validation, and then pays a high transaction fee to a validator to have their transaction executed on a priority basis in a manner designed to profit from the pending but unexecuted transaction that is still in the mempool. MEV may also compromise the predictability of transaction execution, which may deter usage of the network as a whole. Although based on widely available information given that transactions in the mempool are publicly visible, any potential perception of MEV as unfair manipulation may also discourage users and other stakeholders from engaging with DeFi protocols or the Cronos network in general. In addition, it’s possible regulators or legislators could enact rules that restrict practices associated with MEV, which could diminish the popularity of the Cronos network among users and validators. Any of these or other outcomes related to MEV may adversely affect the value of CRO and the value of the the combined company’s common stock.

CRO is susceptible to various types of malicious attacks, including a “33%” attack or a “>66%” attack, and such an attack, even temporarily, could adversely impact the price of CRO and the value of shares of the combined company’s common stock.

Digital asset networks, including the Cronos network, are subject to control by entities that capture a majority of the network’s computational power. If a single validator, or coordinated group of validators, were to control more than one-third of the total staked CRO, they could disrupt the consensus process by halting block finalization, known as a “33%” attack, they could engage in harmful acts that could threaten the integrity of the network. If a validator or colluding group were to control more than two-thirds of the total staked CRO, known as a “>66%” attack, they could reach consensus unilaterally and manipulate the Cronos network. Such an attack could undermine trust in the Cronos network’s security and finality guarantees. The Cronos proof-of-authority consensus mechanism requires a 2/3 supermajority of validators by staked CRO to finalize transactions and produce new blocks. If an attacker were to obtain 2/3 of the total staked CRO, such attacker could reverse completed transactions, approve or reject transactions solely for their own benefit, or modify the ordering of transactions. This might allow these malicious actors to “double-spend” its own tokens (i.e., spend the same tokens in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintained control. To the extent that such malicious actors did not yield its control of the processing power on the Cronos network or the network community did not reject the fraudulent blocks as malicious, reversing any changes made to the Cronos network may not be possible.

Further, a malicious actor could create a flood of transactions in order to slow down confirmations of transactions on the Cronos network or other digital asset networks. For example, in August 2020, the Ethereum Classic Network was the target of two double-spend attacks by an unknown actor or actors that gained more than 50% of the processing power of the Ethereum Classic Network. The attack resulted in reorganizations of the Ethereum Classic Blockchain that allowed the attacker or attackers to reverse previously recorded transactions in excess of $5 million and $1 million.

For example, in May 2019, the Bitcoin Cash network experienced a 51% attack when two large mining pools reversed a series of transactions in order to stop an unknown miner from taking advantage of a flaw in a recent Bitcoin Cash protocol upgrade. Although this particular attack was arguably benevolent, the fact that such coordinated activity was able to occur may negatively impact perceptions of the Bitcoin Cash network. Although the two attacks described above took place on proof-of-work-based networks, it is

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possible that a similar attack may occur on the Cronos network, which could negatively impact the value of CRO and the value of the shares of the combined company’s common stock.

Although there are no known reports of malicious activity on, or control of, the Cronos network, if groups of coordinating or connected CRO holders that together have more than 66% of outstanding CRO were to stake that CRO and run validators, they could exert authority over the validation of CRO transactions. This risk is heightened if over 66% of the validating power on the network falls within the jurisdiction of a single governmental authority. If network participants, including the core developers and the administrators of validating pools, do not act to ensure greater decentralization of CRO, the feasibility of a malicious actor obtaining control of the validating power on the Cronos network will increase, which may adversely affect the value CRO and the value of the shares of the combined company’s common stock.

A malicious actor may also obtain control over the Cronos network through its influence over core developers by gaining direct control over a core developer or an otherwise influential programmer. To the extent that users and validators accept amendments to the source code proposed by the controlled core developer, other core developers do not counter such amendments, and such amendments enable the malicious exploitation of the Cronos network, the risk that a malicious actor may be able to obtain control of the Cronos network in this manner exists. Moreover, it is possible that a group of that together control more than 66% of outstanding CRO are in fact part of the initial or core developer group, or are otherwise influential members of the Cronos community. To the extent that the initial or existing core developer groups also control more than the relevant thresholds of outstanding CRO, as some believe, the risk of and arising from this particular group of users obtaining control of the validating power on the Cronos network will be even greater and, should this materialize, it may adversely affect the value of the shares of the combined company’s common stock.

If any of these exploitations or attacks occur, it could result in a loss of public confidence in CRO and a decline in the value of CRO and, as a result, adversely impact the combined company’s common stock.

Although the combined company will have relevant due diligence procedures at the closing of the Business Combination regarding AML and know-your-customer (“KYC”), these procedures may fail to prevent illegal transactions, which could subject the combined company to criminal and civil liabilities and impact the value of shares of the combined company’s common stock.

Although transaction details of peer-to-peer transactions are recorded on the Cronos network, a buyer or seller of digital assets on a peer-to-peer basis directly on the Cronos network may never know to whom the public key belongs or the true identity of the party with whom it is transacting. Public key addresses are randomized sequences of alphanumeric characters that, standing alone, do not provide sufficient information to identify users. In addition, certain technologies may obscure the origin or chain of custody of digital assets. The opaque nature of the market poses asset verification challenges for market participants, regulators and auditors and gives rise to an increased risk of manipulation and fraud, including the potential for Ponzi schemes, bucket shops and pump and dump schemes. Digital assets have in the past been used to facilitate illicit activities. If a digital asset was used to facilitate illicit activities, businesses that facilitate transactions in such digital assets could be at increased risk of potential criminal or civil lawsuits, or of having banking or other services cut off, and such digital asset could be removed from digital asset exchanges. Any of the aforementioned occurrences could adversely affect the price of the relevant digital asset, the attractiveness of the respective blockchain network and an investment in the combined company’s common stock. If the combined company were to transact with a sanctioned entity, we would be at risk of potential criminal or civil lawsuits or liability.

The combined company aims to take measures with the objective of reducing illicit financing risks in connection with our activities. However, illicit financing risks are present in the digital asset markets, including markets for CRO. There can be no assurance that the measures employed by the combined company will prove successful in reducing illicit financing risks, and the combined company will be subject to the complex illicit financing risks and vulnerabilities present in the digital asset markets. If such risks eventuate, the combined company could face civil or criminal liability, fines, penalties, or other punishments, be subject to investigation, have our assets frozen, lose access to banking services or services provided by other service providers, or suffer disruptions to their operations, any of which could negatively affect the combined company’s ability to operate or cause losses in value of the shares of the combined company’s common stock.

At the closing of the Business Combination, the combined company will have adopted and implemented policies and procedures that are designed to ensure that the combined company does not violate applicable AML and sanctions laws and regulations and to comply with any applicable KYC laws and regulations. The combined company aims to only interact with known authorized third party service

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providers with respect to whom it has engaged in a due diligence process to ensure a thorough KYC process, such as Crypto.com Custody.

Crypto.com Custody has adopted and implemented an anti-money laundering and sanctions compliance program, which provides additional protections to ensure that the combined company does not transact with a sanctioned party. Notably, Crypto.com Custody performs Know-Your-Transaction (“KYT”) screening using blockchain analytic tools, screening systems, and in-house built systems to identify, detect, and mitigate the risk of transacting with a sanctioned or other unlawful actor. Pursuant to Crypto.com Custody’s KYT programs, any CRO that is delivered to the combined company’s custody account will undergo screening to ensure that the origins of that CRO are not illicit.

There is no guarantee that such procedures will always be effective. If third parties have inadequate policies, procedures and controls for complying with applicable anti-money laundering and applicable sanctions laws or the combined company’s diligence is ineffective, violations of such laws could result, which could result in regulatory liability for the combined company under such laws, including governmental fines, penalties, and other punishments, as well as potential liability to or cessation of services by Crypto.com Custody. Any of the foregoing could impact the value of the combined company’s common stock or negatively affect the combined company’s ability to operate.

Any name change and any associated rebranding initiative of CRO may not be favorably received by the digital asset community, which could negatively impact the value of CRO and the value of the combined company’s common stock.

From time to time, digital assets may undergo name changes and associated rebranding initiatives. For example, in 2022, CRO was rebranded from Crypto.com coin to Cronos to better align itself with the decentralized and growing Cronos network, Bitcoin Cash may sometimes be referred to as Bitcoin ABC in an effort to differentiate itself from any Bitcoin Cash hard forks, such as Bitcoin Satoshi’s Vision, and in the third quarter of 2018, the team behind ZEN rebranded and changed the name of ZenCash to “Horizen.” We cannot predict the impact of any name change and any associated rebranding initiative on CRO. After a name change and an associated rebranding initiative, a digital asset may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status previously enjoyed by such digital asset. The failure of any name change and any associated rebranding initiative by a digital asset may result in such digital asset not realizing some or all of the anticipated benefits contemplated by the name change and associated rebranding initiative, and could negatively impact the value of CRO and the value of the combined company’s common stock.

Risks Related to Being a Public Company

The market price of the combined company’s common stock may be volatile and decline materially as a result of volatility in CRO or the digital asset markets generally, or for other reasons.

The trading price of the combined company’s common stock following consummation of the Business Combination is likely to be volatile. The stock market has recently experienced and in the future may experience extreme volatility. This volatility has often been unrelated or disproportionate to the operating performance of particular companies. Shareholders may not be able to resell their shares of the combined company’s common stock at an attractive price due to a number of factors such as the following:

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Broad market and industry factors may materially reduce the market price of the combined company’s common stock, regardless of the combined company’s operating performance. In addition, price volatility may be greater if the public float and trading volume of the combined company’s common stock is low. As a result, shareholders may suffer a loss on their investments.

The combined company’s share price may be exposed to additional risks because our business will change through a “de-SPAC” transaction. There has been increased focus by government agencies on such transactions, and we expect that increased focus to continue. The combined company may be subject to increased scrutiny by the SEC and other government agencies on holders of the combined company securities as a result, which could adversely affect the price of the combined company’s common stock.

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A substantial part of the combined company’s assets following the consummation of the Business Combination will be its CRO holdings and cash and cash equivalents from the proceeds of the Business Combination. Although the combined company is expected to have certain other operations, the combined company will depend on such retained cash and cash equivalents to pay its debts and other obligations.

Upon consummation of the Business Combination, a substantial part of the combined company’s assets will be its CRO holdings and cash and cash equivalents from the proceeds of the Business Combination. While the combined company plans to generate revenue through its accumulation and active management of its CRO holdings, its establishment and operation of a Cronos validator node and undertaking staking activities, these business strategies are subject to risks as described in this section. The combined company’s ability to pay taxes and operating expenses, as well as its debt service obligations in the future, if any, will be largely dependent upon the financial results and cash flows resulting from its business strategies. There can be no assurance that the combined company will generate sufficient cash flow from its products, services, activities and other business strategies or that applicable law and contractual restrictions, including negative covenants under any debt instruments, if applicable, will permit the sale of CRO that secures then-outstanding notes in order to fund working capital needs. The combined company may default on contractual obligations or have to borrow additional funds. In the event that the combined company is required to borrow additional funds, it could adversely affect the combined company’s liquidity and subject it to additional restrictions imposed by lenders. If the combined company enters into additional financing or other agreements in the future, the combined company cannot make assurances that these agreements will be on favorable terms or that they will not restrict the distribution of dividends or other payments to shareholders.

The combined company’s ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. The combined company’s failure to raise capital when needed could harm its business, operating results and financial condition.

The combined company cannot be certain if it will generate sufficient cash through accumulation and active management of its CRO holdings, its establishment and operation of a Cronos validator node and undertaking staking activities to fund future operations or growth of its business. Additional financing may not be available on favorable terms, if at all. If adequate funds are not available on acceptable terms, the combined company may be unable to invest in future growth opportunities, which could harm the combined company’s business, operating results and financial condition. The combined company may from time to time issue debt in order to further its CRO acquisition strategy. If the combined company incurs additional debt, the debt holders could also have rights senior to holders of the combined company’s common stock to make claims on the combined company’s assets. The terms of any debt could restrict the combined company’s operations, including its ability to pay dividends on the combined company’s common stock. As a result, the combined company shareholders bear the risk of future issuances of debt securities reducing the value of the combined company’s common stock.

The issuance of additional shares or convertible securities by the combined company could make it difficult for another company to acquire the combined company, may dilute the ownership of the combined company shareholders and could adversely affect the price of the combined company’s common stock.

The combined company may obtain additional financing and may issue additional shares and/or offer debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity and/or shares of preferred stock. Issuing additional shares of the combined company’s common stock, other equity securities, and/or securities convertible into equity may dilute the economic and voting rights of the combined company’s existing shareholders, reduce the market price of outstanding shares of the combined company’s common stock, or both. Securities convertible into equity could be subject to adjustments in the conversion ratio, pursuant to which certain events may increase the number of equity securities issuable upon conversion. Shares of preferred stock could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could further limit the combined company’s ability to pay dividends to the holders of the combined company’s common stock. The potential issuance of additional securities may delay or prevent a change in control of the combined company or the Company, discourage bids for our securities at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of the holders of our securities, including the combined company’s common stock. The combined company’s decision to issue securities in any future offering will depend on market conditions and other factors beyond its control, which may adversely affect the amount, timing or nature of its future offerings. As a result, holders of the combined company’s common stock bear the risk that the combined company’s future offerings and exercise of any options under any stock option plans that the combined company may implement may reduce the market price of the combined company’s common stock and dilute their percentage ownership.

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Future resales of the combined company’s common stock after the consummation of the Business Combination may cause the market price of the combined company’s securities to drop significantly, even if the combined company’s business is doing well.

After the consummation of the Business Combination and subject to certain exceptions, the combined company’s common stock held or acquired by the Sponsor, the Sellers and certain other parties will be locked-up and subject to transfer restrictions, as described below, subject to certain exceptions, as described in the section “Certain Agreements Related to the Business Combination — Lock-Up Agreement” and “Certain Agreements Related to the Business Combination — Support Agreement.”

The combined company will incur significant costs post-Business Combination as a result of being a public company, including additional legal, accounting, insurance and other expenses, as well as costs associated with public company reporting requirements.

The combined company will incur significant legal, accounting, insurance and other expenses, including costs associated with public company reporting requirements following the consummation of the Business Combination. The combined company will incur significant costs associated with complying with the requirements of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and related rules implemented by the SEC and Nasdaq, or any other national securities exchange on which it may list its securities. The combined company expects these laws and regulations to increase its legal and financial compliance costs following the consummation of the Business Combination and to render some activities more time-consuming and costly, although the combined company is currently unable to estimate these costs with any degree of certainty. The combined company is expected to need to hire additional employees following the consummation of the Business Combination or engage outside consultants to comply with these requirements, which will increase its post-Business Combination costs and expenses. These laws and regulations could make it more difficult or costly for the combined company to obtain certain types of insurance, including directors’ and officers’ liability insurance, and the combined company may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for the combined company to attract and retain qualified persons to serve on the combined company Board or board committees or as executive officers. Furthermore, if the combined company is unable to satisfy its obligations as a public company, it could be subject to delisting of its the combined company’s common stock, fines, sanctions and other regulatory action and potentially civil litigation.

The combined company’s management team is expected to have limited experience managing and operating a U.S. public company.

Certain members of the combined company’s management team are expected to have limited experience managing and operating a U.S. publicly traded company, interacting with U.S. public company investors, and complying with the increasingly complex laws pertaining to U.S. public companies. Being a U.S. public company subjects the combined company to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from the combined company’s senior management and could divert their attention away from the day-to-day management of its business. the combined company may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of U.S. public companies. The development and implementation of the standards and controls necessary for the combined company to achieve the level of accounting standards required of a public company may require costs greater than expected. To support its operations as a U.S. public company, the combined company plans to recruit additional qualified employees or external consultants with relevant experience, which will increase its operating costs in future periods. Should any of these factors materialize, the combined company’s business, financial condition and results of operations could be adversely affected.

If the combined company is unable to maintain an effective system of internal controls and compliances, its business and reputation could be adversely affected.

The combined company plans to manage regulatory compliance by monitoring and evaluating its internal controls to ensure that it is in compliance with all relevant statutory and regulatory requirements, there can be no assurance that deficiencies in its internal controls and compliances will not arise, or that it will be able to implement, and continue to maintain, adequate measures to rectify or mitigate any such deficiencies in its internal controls, in a timely manner or at all. The combined company cannot assure that there will be no instances of inadvertent non-compliance with statutory requirements, which may subject it to regulatory action, including monetary penalties, which may adversely affect its business and reputation. See also “The combined company’s compliance and risk management methods might not be effective and may result in outcomes that could adversely affect the combined company’s reputation, operating results and financial condition.”

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The combined company’s failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act that will be applicable to it following consummation of the Business Combination could have a material adverse effect on its business, financial condition, results of operations, cash flow and prospects.

Section 404 of the Sarbanes-Oxley Act will require the combined company to evaluate the effectiveness of its internal control over financial reporting as of the end of each fiscal year, including a management report assessing the effectiveness of its internal control over financial reporting beginning with its first Annual Report on Form 10-K for the year in which the Business Combination is consummated. Additionally, once the combined company ceases to be an emerging growth company, its independent registered accounting firm will also be required to attest to the effectiveness of its internal control over financial reporting in each Annual Report on Form 10-K to be filed with the SEC. The combined company may in the future identify material weaknesses or significant deficiencies that it may be unable to remedy before the requisite deadline for those reports. The combined company’s ability to comply with the annual internal control reporting requirements will depend on the effectiveness of its financial reporting and data systems and controls across its company. The combined company expects these systems and controls to involve significant expenditures and to become increasingly complex as its business grows. To effectively manage this complexity, the combined company will need to continue to improve its operational, financial and management controls and its reporting systems and procedures. Any weaknesses or deficiencies or any failure to implement required new or improved controls, or difficulties encountered in the implementation or operation of these controls, could harm its operating results and cause it to fail to meet its financial reporting obligations or result in material misstatements in its financial statements, which could adversely affect our business and reduce the market price of the combined company’s common stock.

The combined company will be an “emerging growth company.” The reduced public company reporting requirements applicable to emerging growth companies may make the combined company’s common stock less attractive to investors.

The combined company will qualify as an “emerging growth company,” as defined in the JOBS Act. While the combined company remains an emerging growth company, it will be permitted to and plans to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These provisions include: (i) an exemption from compliance with the auditor attestation requirement in the assessment of the combined company’s internal control over financial reporting pursuant to Section 404 of Sarbanes-Oxley, (ii) not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, (iii) reduced disclosure obligations regarding executive compensation arrangements in the combined company’s periodic reports, registration statements and proxy statements, and (iv) exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, the information the combined company provides will be different than the information that is available with respect to other public companies that are not emerging growth companies.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as the combined company is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable.

The combined company cannot predict whether investors will find the combined company’s common stock less attractive if it relies on these exemptions. If some investors find the combined company’s common stock less attractive as a result, there may be a less active trading market for the combined company’s common stock. The market price of the combined company’s common stock may be more volatile.

The combined company expects to remain an emerging growth company until the earlier of (i) the last day of the fiscal year (1) following the fifth anniversary of the closing of the Business Combination, (2) in which the combined company has total annual gross revenue of at least $1.235 billion, or (3) in which the combined company is deemed to be a large accelerated filer, which means the market value of the combined company Stock that is held by non-affiliates equaled or exceeded $700 million as of the end of that year’s second fiscal quarter, and (ii) the date on which the combined company has issued more than $1 billion in non-convertible debt securities during the prior three-year period.

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If securities or industry analysts do not publish research or reports about the combined company’s business or publish negative reports, the market price of the combined company’s common stock could decline.

The trading market for the combined company’s common stock will be influenced by the research and reports that industry or securities analysts publish about the combined company, the combined company’s business. The combined company may be unable or slow to attract research coverage and if one or more analysts cease coverage of the combined company, the price and trading volume of the combined company’s securities would likely be negatively impacted. If any of the analysts that may cover the combined company change their recommendation regarding the combined company’s securities adversely, or provide more favorable relative recommendations about the combined company’s competitors, the price of the combined company’s securities would likely decline. If any analyst that may cover the combined company ceases covering the combined company or fails to regularly publish reports on the combined company, it could lose visibility in the financial markets, which could cause the price or trading volume of the combined company’s securities to decline. If one or more of the analysts who cover the combined company downgrades the combined company’s common stock or if the combined company’s reporting results do not meet their expectations, the market price of the combined company’s common stock could decline. Moreover, the market price of the combined company’s common stock may decline after the Business Combination if the combined company does not achieve the perceived benefits of the Business Combination as rapidly or to the extent anticipated by financial analysts, or the effect of the Business Combination on the combined company’s financial results is not consistent with the expectations of financial analysts. Accordingly, holders of the combined company Stock following the consummation of the Business Combination may experience a loss as a result of a decline in the market price of the combined company’s common stock. In addition, a decline in the market price of the combined company’s common stock following the consummation of the Business Combination could adversely affect the combined company’s ability to issue additional securities and to obtain additional financing in the future.

The combined company may be subject to material litigation, including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities. These matters are often expensive and time consuming, and, if resolved adversely, could harm the combined company’s business, financial condition and operating results.

We may from time to time become subject to claims, arbitrations, individual and class action lawsuits with respect to a variety of matters, including employment, consumer protection, advertising and securities. In addition, we may from time to time become subject to, government and regulatory investigations, inquiries, actions or requests, other proceedings and enforcement actions alleging violations of laws, rules and regulations, both foreign and domestic. The scope, determination and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes and proceedings to which we are subject cannot be predicted with certainty, and may result in:

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Regardless of the outcome, any such matters can have an adverse impact, which may be material, on our business, operating results or financial condition because of legal costs, diversion of management resources, reputational damage and other factors.

Risks Related to Ownership of the Combined Company Common Stock Following the Business Combination

The Sellers whose interests may conflict with yours, can exercise significant influence over the combined company. The concentrated ownership of the combined company’s common stock may prevent you and other shareholders from influencing significant decisions and may prevent or discourage unsolicited acquisition proposals or offers for the combined company Stock, and that may adversely affect the trading price of the combined company’s common stock.

Upon the closing of the Business Combination, the Sellers will beneficially own a significant portion of the combined company’s common stock. Further, each share of the combined company’s common stock will have the right to one hundred (100) votes per share and all shares of the combined company’s common stock will be owned by Crypto.com Sub. For so long as Crypto.com Sub holds a significant portion of the voting interests of the combined company through its ownership of the combined company’s common stock, it will have the ability to significantly influence decision-making with respect to the combined company’s business direction and policies.

The shares of the combined company’s common stock will convert to shares of the combined company’s common stock on a one-to-one basis, upon written notice or any transfer of shares of the combined company’s common stock by Crypto.com Sub to any third party (other than its Affiliates). Transfers of shares of the combined company’s common stock held by the Sellers and the Sponsor will be subject to the provisions of the Lock-Up Agreements, pursuant to which the Sellers and the Sponsor will agree not to, subject to certain exceptions, transfer their shares of the combined company’s common stock until the earlier of (i) the 12-month period ending on the first anniversary of the closing of the Business Combination and (ii) the date on which the combined company consummates a liquidation, merger, capital stock exchange, reorganization or other similar transaction after the closing of the Business Combination which results in all of the combined company’s shareholders having the right to exchange their shares of the combined company’s common stock for cash, securities or other property.

The Sellers are also entitled to board designation rights and Crypto.com Sub has the exclusive right to designate and appoint the Chief Executive Officer of the combined company. Matters over which the Sellers may individually, directly or indirectly, exercise significant influence following the closing of the Business Combination include: (i) the election of the directors on the combined company Board and, in the case of Crypto.com Sub, the appointment of the combined company’s Chief Executive Officer; (ii) business combinations and other merger transactions requiring shareholder approval, including proposed transactions that would result in the combined company’s shareholders receiving a premium price for their shares; (iii) amendments to the combined company’s organizational documents, and (iv) increases or decreases in the size of the combined company Board. Such concentrated control may prevent or discourage unsolicited acquisition proposals or offers for the combined company’s common stock that you may feel are in your best interest as one of the combined company’s shareholders. As a result, such concentrated control may adversely affect the market price of the combined company’s common stock.

Crypto.com Sub, through its voting control of the combined company, is in a position to control actions that require shareholder approval and may make decisions that are adverse to other shareholders.

At closing of the Business Combination, Crypto.com Sub will own all of the outstanding the combined company’s common stock. As a result, Crypto.com Sub will have the ability to exercise control over certain decisions requiring shareholder approval, including the election of directors, amendments to the combined company’s organizational documents and approval of significant corporate transactions, such as a merger or other sale of the combined company or our assets. In addition, the combined company Board will consist of three persons designated by Crypto.com Sub and one person designated by TMTG, although three of them will be required to

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qualify as independent directors under Nasdaq Rules. Accordingly, Crypto.com Sub will have significant influence over the combined company and the combined company’s decisions, including the appointment of management and any other action requiring a vote of the combined company Board. In addition, this concentration of ownership may have the effect of delaying, preventing or deterring a change in control of us and may negatively affect the market price of the combined company’s common stock.

At closing of the Business Combination, holders of the combined company’s common stock have the right to one (1) vote per share. The shares of the combined company’s common stock will convert to shares of the combined company’s common stock on a one-to-one basis, upon written notice or any transfer of shares of the combined company’s common stock by Crypto.com Sub to any third party (other than its Affiliates). Transfers of the combined company’s common stock will be subject to the provisions of the Lock-Up Agreements that the combined company will enter into at closing of the Business Combination, pursuant to which the Sponsor, the Sellers and certain other parties thereto will agree not to, subject to certain exceptions, transfer their shares of the combined company’s common stock until the earlier of (i) the one-year anniversary of the closing of the Business Combination and (ii) the date on which the combined company consummates a liquidation, merger, capital stock exchange, reorganization or other similar transaction after the closing of the Business Combination which results in all of the combined company’s shareholders having the right to exchange their shares of the combined company’s common stock for cash, securities or other property.

Securities of companies formed through business combinations involving SPACs such as the combined company may experience a material decline in price relative to the share price of the SPACs prior to such transaction.

The Company issued Class A ordinary Shares for $10.00 per share upon the closing of the our initial public offering. As with other SPACs, each Public Share issued in our initial public offering carries a right to have such share redeemed for a pro rata portion of the proceeds held in the Trust Account prior to the closing of the Business Combination. Following the closing of the Business Combination, the shares of the combined company’s common stock outstanding will no longer have any such redemption right and may be dependent upon the fundamental value of the combined company, as well as other relevant factors such as market conditions and trading multiples, and the securities of other companies formed through mergers with SPACs in recent years, and may be significantly less than $10.00 per share.

Volatility in the combined company’s share price could subject the combined company to securities class action litigation.

The market price of the shares of the combined company’s common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation. The combined company may be the target of this type of litigation and investigations. Securities litigation against the combined company could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm the combined company’s business.

Since the completion of our initial public offering, there has been a precipitous drop in the market values of companies formed through business combinations involving SPACs. Accordingly, securities of companies such as the combined company may be more volatile than other securities and may involve special risks.

Since the completion of the our initial public offering, there has been a precipitous drop in the market values of companies formed through business combinations involving SPACs like ours. These include inflationary pressures, increases in interest rates and other adverse economic and market forces have contributed to these drops in market value for SPACs. As a result, the Public Shares are subject to potential downward pressures, which may result in high levels of exercises of redemptions rights, reducing the cash available from the Trust Account. If there are substantial redemptions by shareholders of the Company in connection with the Business Combination, there will be a lower public float of the combined company’s common stock following the closing of the Business Combination, which may cause volatility in the price of our securities and adversely impact our ability to secure financing following the closing of the Business Combination.

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