DeFi Development Corp.: Form 10-Q for the period ended Mar 31, 2025

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.

Overview

DeFi Development Corp. (formerly Janover Inc.) is an AI-powered online platform that connects the commercial real estate industry by providing data and software subscriptions as well as value-add services to multifamily and commercial property professionals as we connect the increasingly complex ecosystem that stakeholders have to manage. We provide a technology platform that connects commercial mortgage and small business borrowers looking for debt to refinance, build, or buy commercial property including apartment buildings to commercial property lenders. These property lenders include traditional banks, credit unions, real estate investment trusts (“REITs”), debt funds, and other financial institutions looking to deploy capital into commercial mortgages.

Subsequent to March 31, 2025, the Company adopted a new treasury policy and strategy under which the principal holding in its treasury reserve on the balance sheet will be allocated to digital assets, starting with Solana (“SOL”) by applying a proven public-market treasury model to an asset that’s earlier in its lifecycle, structurally reflexive, and underexposed as compared to Bitcoin. The Board of Directors approved the Company’s treasury policy on April 4, 2025, authorizing the long-term accumulation of SOL. The Company also aims to operate one or more SOL validators, enabling it to stake its treasury assets, participate in securing the network, and earn rewards that can be reinvested. This treasury strategy reflects a belief that SOL represents a high-conviction, long-term cryptoasset with superior technical performance, robust developer traction, and growing institutional adoption. The Company’s approach involves acquiring SOL directly—both through market purchases and strategic partnerships—and staking its holdings via Company-operated validators to generate native staking yield. This treasury initiative enhances the Company’s capital allocation strategy and does not affect its core commercial real estate platform, which remains fully operational. The AI-powered marketplace, software offerings, and subscription services supporting the multifamily and commercial property ecosystem continue to be a central part of the Company’s business.

We currently serve hundreds of thousands of web users annually, including multifamily and commercial property owners and developers applying for billions of dollars of debt financing per year, professional service providers, and thousands of multifamily and commercial property lenders including more than 10% of the banks in America, credit unions, REITs, debt funds, Fannie Mae® and Freddie Mac® multifamily lenders, FHA multifamily lenders, commercial mortgage-backed securities (“CMBS”) lenders, Small Business Administration (“SBA”) lenders, and more.

We have developed an AI-enabled, B2B fintech platform that connects commercial borrowers and lenders, with a human touch. Commercial property owners, operators, and developers can quickly create an account on our platform, chat with our AI, set up their own profile and submit and manage loan requests on their dashboard in a digital experience. Our algorithms automatically match borrowers to their best loan option(s) or to our internal capital markets advisors (inbound sales team) that guide the borrower through the process and connect them with the right loan product and lender. Originators that work at commercial real estate mortgage lenders can log in and use their lender portal to view, sort, and engage with their new matches in real-time and communicate with the borrowers, tracking their loans right through our portal; they can setup the types of deals they are looking for as well. Our capital markets advisors have their own interface that gives them access to targeted loan opportunities, market intelligence, and data empowering them to better assist borrowers in managing their choices, leading to the best possible outcomes for both lenders and borrowers while building trust, all of which enhances our brand.

We currently have two different customer segments: lenders and borrowers. Borrowers include (but are not limited to) owners, operators, and developers of commercial real estate including multifamily properties and most recently, a growing segment of small business owners (which we believe represents a significant growth opportunity). Lenders include banks, credit unions, REITs, Fannie Mae® and Freddie Mac® multifamily lenders, FHA® multifamily lenders, debt funds, CMBS lenders and SBA lenders.

Our business model includes earning a transaction fee, or platform fee, each time a loan closes with a lender through our platform. We are either paid a share of the revenue from the transaction by the lender and/or receive some fixed sum in an amount we negotiate from the borrower. We are generally paid by the lender or the borrower and are paid by both sometimes. Our average fee earned per transaction is approximately 1% of the loan amount generally earned at the time of closing. We do not make loans or share risk with the lenders, with whom we conduct business with.

The Company derives its revenue primarily from platform fees and subscription revenue. Platform fees include referral and advisory fees generated from multifamily and commercial real estate and small business debt transactions. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and the promised services have been transferred to the customer. The Company’s services are generally transferred to the customer at a point in time, which is when the underlying lending transaction has closed and successfully funded. The Company may act as an agent for both lenders and borrowers.

Subsequent to March 31, 2025, the Company will generate incremental revenue through two primary channels tied to its treasury strategy: (1) staking SOL rewards and (2) validator-based monetization. The Company stakes SOL through its validator infrastructure, earning native yield.

Our data and software offerings are generally offered on a subscription basis as software as a service (“SaaS”). DeFi Development corp. (formerly Janover Inc.) provides data, transparency, and tools, generally as annual software subscriptions, to help stakeholders navigate the most complex components of the multifamily and commercial property lifecycles – debt (Janover Pro, Janover Capital Markets), insurance (Janover Insurance), equity (Janover Connect, Janover Engage), and technology (Janover AI).

• Janover Pro, which was launched in 2024, is our flagship offering and the leading online SaaS marketplace for multifamily and commercial real estate loans providing an online matchmaking service where borrowers or brokers can shop their loans, and lenders can provide financing and find more new opportunities. Our customer pays for subscriptions which are generally on annual contracts, and we generate revenue from SaaS subscription fees, which are recognized over time, throughout the term of the customer contract.
• Janover Connect, formerly known as Groundbreaker and was acquired in 2023, is a SaaS platform to help real estate owners, operators, and developers raise capital and manage their investors. The platform streamlines the capital raising process by providing a professional investor portal where potential investors can analyze opportunities, sign documents, make investments, and track their investment portfolios. This real estate syndication software and investor portal primarily derives its revenue from SaaS subscription fees, which are recognized over time, throughout the term of the customer contract.
• Janover Insurance was launched in 2024. This Insurtech subsidiary derives revenue from subscriptions pertaining to annual insurance premium commissions received, which are recognized at the start of the annual term, when the insurance coverage is bound.
• Janover Engage, which is our equity marketplace, was launched in 2024. Janover Engage is a SaaS platform designed to connect real estate owners, operators, and sponsors raising capital using Reg D 506(c) with potential accredited investors. Janover Engage provides general partners (“GPs”) tools to market their offering and a platform on which to showcase it, making it easier for them to raise capital, build their pipeline, and focus on their next deal. Revenue is derived from the SaaS subscription fees, which are recognized over time, throughout the term of the customer contract.
• Janover AI, which was also launched in 2024, represents the next frontier in leveraging technology to optimize the real estate lifecycle. We have developed a generative AI SaaS platform that is trained on and programmed to understand the nuances of multifamily and commercial property capital markets, from debt, to equity, to operations. The revenue derived from these SaaS subscriptions will be recognized over the term of the SaaS agreement.

In fiscal 2025, we will continue to focus on transitioning from transactional platform fee debt revenue to the more predictable and profitable recurring SaaS subscription revenue. As of March 31, 2025, our annual recurring revenue (“ARR”) reached approximately $1.4 million, compared to approximately $287,000 as of March 31, 2024, an increase of 379%. ARR increased sequentially by approximately 69%, which was approximately $812,000 for the year ended December 31, 2024. ARR represents an annualization of our recurring revenue, which assumes a full year of revenue. As of March 31, 2025 and 2024, there was approximately $966,000 and $341,000 in deferred revenue, respectively, the majority of which is pertaining to SaaS subscription fees received in advance. The revenue will be recognized over the remaining term of the SaaS agreements over the next three years.

Strategy

In 2025, we will continue to better connect the commercial real estate industry by building tools that reduce frictions in transactions and that provide broader access to better data than entrenched incumbents. We will also further our treasury strategy focused on the accumulation of SOL and generating additional incremental revenue through staking SOL rewards and validator-based monetization. Our priorities are as follows:

1. Scale ARR - We plan to build our sales and outbound marketing capabilities to increasingly focus on selling profitable subscription services on annual and multi-year contracts. Making revenue more predictable and aligning our incentives with those of our customers.

2. Expand net revenue retention (“NRR”) - The most important thing to do is to listen to the customer and to solve their problems. By focusing on NRR as a core metric, it forces us to concentrate on our customers’ needs and offer additional products. We can measure attrition and expansion revenue with NRR which will gauge the level of our success.

3. Expand average contract values (“ACV”) - We have the opportunity to expand ACVs and average deal size by focusing on where we are able to drive the most value and create even more value. By focusing on creating more value per touch, we naturally will expand ARR and NRR.

4. Increase our SOL holdings, while focusing on maximizing our SOL per outstanding share of common stock (“SPS”) and SPS growth to provide investors with a clear view of the underlying value of this treasury allocation. This strategy is designed to complement, not replace, the Company’s core commercial real estate focus. This hybrid approach provides both a stable operating business and the upside potential of an actively managed, crypto-native treasury.

5. Continue to be active in the M&A space, with the focus of validator related acquisitions, and enhancing our core business and treasury allocation with strategic partnerships. The Company may explore future opportunities such as delegated staking products, tokenized financial instruments, or institutional staking partnerships.

All of this will be accomplished by continuing to:

1. Hire high-performing and aligned personnel to help us execute our strategy.

2. Invest in improving our platform and technology, while continuing to allocate resources to the Company’s treasury strategy.

3. Cultivate a culture of creativity, hard work, innovation, curiosity, and community.

Economic and Market Risks and Uncertainties in Our Business Model

We may be negatively impacted by periods of economic downturns, recessions, and disruptions in the capital markets, credit and liquidity issues in the capital markets, including international, national, regional and local markets, tax and regulatory changes and corresponding declines in the demand for commercial real estate investment and related services. Historically, commercial real estate markets and, in particular, the U.S. commercial real estate market, have tended to be cyclical and related to the flow of capital to the sector, the condition of the economy as a whole and the perceptions and confidence of market participants to the economic outlook. Cycles in the real estate markets may lead to similar cycles in our earnings and significant volatility in our stock price. Further real estate markets may “lag” behind the broader economy such that even when underlying economic fundamentals improve in a given market, additional time may be required for these improvements to translate into strength in the real estate markets. The “lag” may be exacerbated when banks delay their resolution of commercial real estate assets whose values are less than their associated loans.

Negative economic conditions, changes in interest rates, credit and the availability of capital, both debt and/or equity, disruptions in capital markets, the uncertainty of the tax and regulatory environment or declines in the demand for commercial real estate investment and related services in international and domestic markets or in significant markets in which we do business, have had and could have in the future a material adverse effect on our business, results of operations and/or financial condition. In particular, the commercial real estate market is directly impacted by (i) the lack of debt and/or equity financing for commercial real estate transactions, (ii) increased interest rates and changes in monetary policies by the U.S. Federal Reserve, (iii) changes in the perception that commercial real estate is an accepted asset class for portfolio diversification, (iv) changes in tax policy affecting the attractiveness of real estate as an investment choice, (v) changes in regulatory policy impacting real estate development opportunities and capital markets, (vi) slowdowns in economic activity that could cause residential and commercial tenant demand to decline, and (vii) declines in the regional or local demand for commercial real estate, or significant disruptions in other segments of the real estate markets could adversely affect our results of operations. Any of the foregoing would adversely affect the operation and income of commercial real estate properties.

These and other types of events could lead to a decline in transaction activity as well as a decrease in property values which, in turn, would likely lead to a reduction in financing fees relating to such transactions. These effects would likely cause us to realize lower revenues. Such declines in transaction activity and value would likely also significantly reduce our financing activities and revenues.

Fiscal uncertainty, significant changes and volatility in the financial markets and business environment, and similar significant changes in the global, political, security and competitive landscape, make it increasingly difficult for us to predict our revenue and earnings into the future. As a result, any revenue or earnings projections or economic outlook which we may give may be materially affected by such events. Fiscal 2024 was one of the most challenging years for the commercial real estate industry.

As part of our capital allocation strategy for assets that are not required to provide immediate working capital for our ongoing operations, we have invested and will continue to accumulate SOL. As of the date of this filing, we had purchased approximately $103 million SOL, including staking rewards. The price of SOL has historically been subject to dramatic price fluctuations and is highly volatile. Moreover, digital assets, such as SOL, are relatively novel and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the liquidity or value of SOL.

Any decrease in the fair value of SOL could require us to incur an unrealized loss on the SOL investment, and such charge could be material to our financial results for the applicable reporting period, which may create significant volatility in our reported earnings. Any decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on the market price of our common stock. In addition, if investors view the value of our common stock as dependent upon or linked to the value or change in the value of our SOL holdings, the price of SOL may significantly influence the market price of our common stock.

Historically, crypto markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currency 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 SOL at favorable prices or at all. Further, SOL we hold with our custodians and transact with our trade execution partners 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 or other capital raising transactions collateralized by our unencumbered SOL or otherwise generate funds using our SOL holdings, including in particular during times of market instability or when the price of SOL has declined significantly. If we are unable to sell our SOL, enter into additional capital raising transactions using SOL as collateral, or otherwise generate funds using our SOL holdings, or if we are forced to sell our SOL at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

Seasonality

Traditionally, the commercial real estate market is seasonal in nature, with the first and fourth fiscal quarters being more active than the second and third fiscal quarters. However, during fiscal 2024 and during the first quarter of fiscal 2025 the commercial real estate market was less seasonal due to the significant macroeconomic pressures in the commercial real estate market.

Recent Developments

ATM Offering

On August 1, 2024, the Company entered into an At-the-Market Offering Agreement (the “ATM Sales Agreement”) with R.F. Lafferty & Co., Inc., as sales agent, to sell, from time to time, shares of its common stock having an aggregate offering price of up to $0.99, through an “at the market” offering pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-281185), as supplemented by a prospectus supplement. As of December 31, 2024, there has been no activity to report with the Form S-3 Registration Statement and ATM Sales Agreement. As of the March 31, 2025, the Company issued approximately 13,000 shares of its common stock, raising approximately $70,000, in conjunction with its Form S-3 Registration Statement and ATM Sales Agreement. On April 15, 2025, we filed a prospectus supplement to increase our current ATM Sales Agreement from $1.5 million to $14.9 million. On May 5, 2025, we filed another prospectus supplement to increase our current ATM Sales Agreement from $14.9 million to $41.3 million, as we were no longer subject to the baby shelf S-3 limitation. Subsequent to March 31, 2025, the Company issued approximately 185,000 shares of its common stock, raising approximately $12.4 million, in conjunction with its Form S-3 Registration Statement and ATM Sales Agreement. We intend to continue to utilize the Form S-3 Registration Statement and ATM Sales Agreement for the raising of future capital in fiscal 2025.

Nasdaq Compliance Notice

On January 15, 2025, the Company received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) that the Company has regained compliance with the minimum closing bid price requirement under Nasdaq Listing Rule 5550(a)(2). As previously disclosed, on July 16, 2024, the Company was notified by Nasdaq that it was not in compliance with Nasdaq Listing Rule 5550(a)(2) because its common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days. To regain compliance, the Company was required to maintain a minimum closing bid price of $1.00 per share for at least 10 consecutive trading days. This requirement was met on January 13, 2025.

Change of Control

On April 4, 2025, Blake Janover, then Chief Executive Officer and Chairman of DeFi Development Corp (formerly Janover Inc.), entered into a Stock Purchase Agreement (“Purchase Agreement”) with DeFi Dev LLC, a Delaware limited liability company (“DeFi Dev LLC”), and 3277447 Nova Scotia Ltd, a corporation formed under the laws of Nova Scotia, Canada (“NS Corp”) to sell (i) 728,632 shares of Common Stock, with each share of common stock entitled to one vote per share and representing approximately 51.0% of the Company’s 1,579,946 issued and outstanding shares of common stock and (ii) 10,000 shares of Series A Preferred Stock of the Company, with each share of Series A Preferred Stock entitled to 10,000 votes per share on all matters entitled to be voted upon by the common stock unless otherwise prohibited by law. DeFi Dev LLC and NS Corp were previously unaffiliated parties to the Company. DeFi Dev LLC purchased 412,041 shares of common stock and 5,500 shares of Series A Preferred Stock for $2,253,235 utilizing funds contributed by its managing member and other members. A portion of the funds for the purchase of shares by DeFi Dev LLC came from a loan from Joseph Onorati. NS Corp purchased 316,591 shares of common stock and 4,500 shares of Series A Preferred Stock for $1,746,765 utilizing funds contributed by its controlling stockholder. The aggregate purchase price was $4,000,000. The transactions under the Purchase Agreement constituted a change in control of the Company.

Change in Management

Effective as of April 4, 2025, Samuel Haskell, Marcelo Lemos and Ned Siegel resigned from the Board of Directors of the Company (“the Board”) and, to the extent applicable, all committees thereof. The Directors’ resignations were not related to any disagreement with the Company. On April 4, 2025, the Board elected Joseph Onorati, Marco Santori and Zachary Tai as Directors of the Company, to fill the vacancies on the Board. Mr. Santori was appointed to serve on the Audit Committee and Nominating and Corporate Governance Committee of the Board and Mr. Tai was appointed to serve on the Audit Committee and Compensation Committee and Nominating and Corporate Governance Committee of the Board.

After such replacements, the new Board is composed of Mr. Janover, Mr. Caragol (independent), Mr. Onorati (chairman), Mr. Santori (independent) and Mr. Tai (independent). The Audit Committee is composed of Mr. Santori, Mr. Caragol and Mr. Tai. The Compensation Committee is composed of Mr. Caragol and Mr. Tai. The Nominating and Corporate Governance Committee is composed of Mr. Santori and Mr. Tai and Mr. Caragol.

On April 4, 2025, the Board made the following officer appointments:

• Mr. Onorati was appointed by the Board as the Chief Executive Officer of the Company. Mr. Onorati, age 41, most recently served as chief strategy officer at Kraken Digital Asset Exchange, working at Kraken from 2016 to 2024. Previously, he was at CaVirtEx, the first Bitcoin exchange in Canada, from 2013 to 2015 where he was appointed as interim CEO, until he sold the company to Coinsetter, which was later acquired by Kraken. Mr. Onorati succeeds Mr. Janover as CEO of the Company. Mr. Janover will remain as an employee of the Company serving as chief commercial officer and will lead the Company’s existing AI-powered online commercial real estate platform.
• Parker White was appointed by the Board as the Chief Operating Officer and Chief Investment Officer of the Company. Mr. White, age 31, previously served as an Engineering Director at Kraken Digital Asset Exchange from December 2018 to March 2025. He also runs a SOL validator with $75 million in delegated stake. Earlier in his career, Mr. White served as the Director of Research and Trading for TCG Advisors, a $2 billion institutional asset manager, from May 2014 to December 2018.
• Blake Janover, former CEO of the Company, was appointed by the Board as the Chief Commercial Officer of the Company.

On April 17, 2025, the Board appointed Fei “John” Han as Chief Financial Officer of the Company. Mr. Han brings over 15 years of experience across traditional finance and crypto, with a track record of leadership at some of the crypto industry’s most recognized institutions. Most recently, he served as CFO at blockchain-company Provable, and prior to that, held multiple senior roles at Binance including Vice President of Finance and Head of Finance for Europe, the Middle East, Africa, LATAM, and Canada. Earlier in his career, he led Strategic Finance at Kraken, where he worked closely with Parker White and Joseph Onorati and played a key role in scaling the business during a period of rapid growth. Han began his career in equity research at Goldman Sachs and later served as an investor at Nezu Asia Capital and Driehaus Capital.

Adoption of New Treasury Policy

The Company has adopted a treasury policy under which the principal holding in its treasury reserve on the balance sheet will be allocated to digital assets, starting with SOL by applying a proven public-market treasury model to an asset that’s earlier in its lifecycle, structurally reflexive, and underexposed as compared to Bitcoin. The Board approved the Company’s new treasury policy on April 4, 2025, authorizing long-term accumulation of SOL. The Company also aims to operate one or more SOL validators, enabling it to stake its treasury assets, participate in securing the network, and earn rewards that can be reinvested.

Convertible Notes and Warrants

On April 4, 2025, the Company entered into securities purchase agreements (“Securities Purchase Agreements”) with the investors identified on the signature pages thereto (“Investors”), pursuant to which the Company issued to the Investors approximately $42.0 million in aggregate principal amount of convertible notes (“Notes”), which are convertible into the Company’s common stock, par value $0.00001 per share (“Common Stock”), together with warrants issued for each $1,000 in principal amount of convertible notes purchased to purchase (1) approximately 8.333 shares of Common Stock at an exercise price of $120 per share (“Warrant 1”) and (2) approximately 6.666 shares of Common Stock at an exercise price of $150 per share (“Warrant 2” and, together with Warrant 1, the “Warrants”).

The Notes accrue interest at a rate of 2.5% per year, paid in cash quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, and mature on April 6, 2030. The Notes are convertible at any time prior to the Maturity Date, conditioned on the requirement that the Company’s market capitalization equaled or exceeded $100 million on the day prior to the conversion date (“Market Capitalization Condition”). The conversion price has been set at $68.19, the last reported sale price of the Common Stock on The Nasdaq Stock Market on the date that the Company’s market capitalization first exceeded $100 million. The conversion price will not be adjusted, except for customary anti-dilution and dividend protection. Conversion of the Notes, together with any accrued and unpaid interest, if any, at the time of conversion will be settled in shares of Common Stock.

The holders of the Notes have the right to require the Company to repurchase the Notes at a price equal to 100% of par plus accrued and unpaid interest, if any, on April 6, 2028. In addition, the Company may redeem the notes on or after April 6, 2028, if the last reported sale price of the common stock has been at least 130% of the conversion price for at least 20 trading days during a period of 30 consecutive trading days at a price equal to 100% of par plus accrued and unpaid interest, if any.

The Notes provide that the holder may not convert any portion of such holder’s Notes to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding shares of Common Stock immediately after conversion, except that upon at least 61 days’ prior notice from the holder to the Company, the holder may increase the beneficial ownership limitation to up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the conversion. The Notes contain certain other customary covenants and customary events of default provisions.

The Warrants are exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance. The Exercise Prices are subject to adjustments upon the issuance of stock dividends, and subdivision or combinations of shares of Common Stock by the Company.

Warrants for certain investors provide that the holder may not exercise any portion of such holder’s Warrants to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding shares of Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to the Company, the holder may increase the beneficial ownership limitation to up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise.

Change of Independent Auditor

dbbmckennon, an independent registered public accounting firm, resigned as our independent registered public accounting firm on April 21, 2025, and we appointed Wolf & Company, P.C., as our independent registered public accounting firm, effective as of April 21, 2025, to audit and report on our consolidated financial statements for the year ended December 31, 2025. The change of auditors was due to the specific subject matter expertise required to audit the Company’s new business strategy and crypto treasury related assets. The audit reports on the Company’s consolidated financial statements for the fiscal years ended December 31, 2024 and 2023, did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. During the fiscal years ended December 31, 2024 and 2023, (i) there were no disagreements, as defined in Item 304(a)(1)(iv) of Regulation S-K, between the Company and its auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the Auditor, would have caused the Auditor to make reference to the subject matter of such disagreements in connection with its reports on the Company’s financial statements for such years and interim period, and (ii) there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.

Stock Options & RSUs Awards

In April 2025, the Company granted approximately 157,000 stock options and approximately 32,000 RSUs under the Company’s 2023 Equity Incentive Plan to the Directors, Executive Officers and certain key employees of the Company as a retention and incentive mechanism to attract and retain top talent in a competitive market. On April 9, 2025, the Board approved to increase to the Company’s 2023 Plan from the initial number of shares of common stock that may be subject to awards (as defined in the 2023 Plan) and granted under the 2023 Plan to be equal to 500,000 Shares (on a post-reverse split basis), subject to stockholder’s approval.

Corporate Name Change

Effective April 17, 2025, the Company changed its name from “Janover Inc.” to “DeFi Development Corp.” (“Name Change”). In connection with the Name Change, we have applied to change the ticker symbol for the Company’s common stock to “DFDV” on the Nasdaq Capital Market, which was changed on May 5, 2025.

SOL Capital Allocation

As part of our capital allocation strategy for assets that are not required to provide working capital for our ongoing operations, we have invested and will continue to invest in SOL. As of the date of this filing, we had purchased approximately $103 million SOL, including staking rewards. The price of SOL has historically been subject to dramatic price fluctuations and is highly volatile. Moreover, digital assets, such as SOL, are relatively novel and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the liquidity or value of SOL.

Securities Purchase Agreement for Private Investment in a Public Entity

On May 1, 2025, the Company entered into a securities purchase agreement (“Securities Purchase Agreement”) with the investors identified on the signature pages thereto (“Investors”) and a related registration rights agreement in connection with the issuance and sale in a private placement of the following securities to the Investors for gross proceeds of approximately $24.0 million: (i) 315,838 shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share (“Common Stock”) and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 207,679 shares of Common Stock upon the exercise of the Pre-Funded Warrants at an exercise price of $0.01 per share. The purchase price for one share of Common Stock was $46.00 and the purchase price for one Pre-Funded Warrant was $45.99 per share.

Validator Business Acquisition

On May 1, 2025, the Company has entered into a definitive agreement to acquire Solsync Solutions Partnership, a SOL validator business owned by Parker White, our Chief Investment and Operating Officer, with an average delegated stake of approximately 500,000 SOL (valued at approximately $75.5 million). The purchase price of $3.5 million will be paid through a combination of $3.0 million in restricted JNVR stock (86,412 common shares) and $500,000 in cash. Upon completion, the validator operation will be rebranded as DeFi Development Corp., its staking rewards will be integrated into the Company’s revenue streams, and all SOL owned by DeFi Development Corp. will be self-staked through the newly acquired validator business. This transaction with Mr. White was an approved related party transaction by our Board of Directors.

Seven-For-One Forward Stock Split

On May 6, 2025, the Company Board of Directors have approved a seven-for-one forward stock split of the Company’s issued and outstanding common shares. The stock split will result in each shareholder of record as of the close of business on May 19, 2025, receiving six additional shares for every one share held, for a total of seven shares of common stock. The implementation of the stock split is subject to the filing of an amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which the Company expects to file on or about May 19, 2025. Subject to final approval by the Nasdaq Capital Market, trading is expected to begin on a post-stock split adjusted basis at the market open on or about May 20, 2025. As a result of the stock split, proportionate adjustments will be made to the number of shares of common stock issuable under the Company’s equity incentive plans and the number of shares underlying outstanding equity awards, as well as to the exercise price of outstanding stock options.

Results of Operations

Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

The following table provides certain selected financial information for the periods presented:

Revenues

Revenue for the three months ended March 31, 2025, was approximately $287,000, as compared to approximately $411,000 for the three months ended March 31, 2024, a decrease of approximately $124,000, or 30%. The decrease in revenue for the period was due primarily to a decrease in platform revenue, related to our legacy debt business. Offsetting this decrease was an increase in subscription revenue, related to our SaaS software business. In 2024, the Company started to market, its lender marketplace (“Janover Pro”), its equity marketplace (“Janover Engage”), and its artificial intelligence technology (“Janover AI”) as a software as a service. Subscription Revenue also includes revenue from Janover Connect, formerly known as Groundbreaker, our real estate syndication software and investor portal and from our Insurtech subsidiary. The revenue derived from these SaaS subscriptions will be recognized over the term of the SaaS agreement. Subscription revenue was approximately $191,000 for the three months ended March 31, 2025, compared to approximately $73,000 for the same period in the prior year. For the three months ended March 31, 2025, approximately 67% of our total revenue was recurring revenue, compared to 18% for the same period in the prior year. In fiscal 2025, we will continue to focus on transitioning from transactional platform fee debt revenue to the more predictable and profitable recurring SaaS subscription revenue. As of March 31, 2025, our ARR reached approximately $1.4 million, compared to approximately $287,000 as of March 31, 2024, an increase of 379%. ARR increased sequentially by approximately 69%, which was approximately $812,000 for the year ended December 31, 2024. ARR represents an annualization of our recurring revenue, which assumes a full year of revenue.

Operating Expenses

Cost of Revenues

Cost of revenue for the three months ended March 31, 2025, was approximately $7,000, as compared to $8,600 for the three months ended March 31, 2024. The entire cost of revenue balance consists of software and hosting costs related to our subscription revenue. Cost of revenue represents approximately 2% of total revenue for the three months ended March 31, 2025 and 2024.

Our operating expenses by category for the three months ended March 31, 2025 and 2024 is as follows:

29

Sales and marketing expenses

Our sales and marketing costs are primarily comprised of personnel and advertising costs. Sales and marketing expenses for the three months ended March 31, 2025 was approximately $465,000, compared to approximately $416,000 for the three months ended March 31, 2024, an increase of approximately $49,000, or 12%. The majority of the increase for the quarter can be attributed to increased online advertising costs to promote of SaaS subscription software products. As we continue to improve the efficiency of our sales and marketing efforts, leveraging our search engine optimization and our artificial intelligence engine, we expect to continue to optimize and increase our advertising and marketing expenses to help drive subscription revenue, while lowering our customer acquisition costs, to drive a more productive sales and marketing spend.

Research and development expenses

Our research and development costs are primarily comprised of personnel costs with a minimal amount of software license fees to support the development of our platform. Research and development expenses for the three months ended March 31, 2025, was approximately $169,000, compared to approximately $173,000 for the three months ended March 31, 2024, a decrease of approximately $4,000, or 3%. The decrease for the period can be attributed to a decrease in compensation and benefits related to a reduction in personnel. We will continue to focus on developing our platform and our AI for the benefit of driving customer value on our marketplace, which we believe will drive long term value to customers and our shareholders.

General and administrative expenses

Our general and administrative costs include personnel costs, accounting, legal, rent, and other overhead expenses. General and administrative expenses for the three months ended March 31, 2025, was approximately $544,000, compared to approximately $759,000 for the three months ended March 31, 2024, a decrease of approximately $215,000, or 28%. During the three months ended March 31, 2025, there was a $77,000 decrease in compensation and benefits due to a reduction in personnel and a $62,000 decrease in stock-based compensation expense, which was primarily related to the issuance of common stock for IPO services, the cancellation of employee stock options and the issuance of common stock in connection with the IPO in fiscal 2023. There was also an $46,000 decrease in professional fees and insurance during the three months ended March 31, 2025, related to a reduction in investor relations fee and insurance premium during the period.

Depreciation and amortization expenses

Depreciation and amortization expenses were approximately $50,000 for the three months ended March 31, 2025, compared to approximately $73,000 for the three months ended March 31, 2024. Amortization expense, which makes up the majority of the balance, relates to Groundbreaker’s developed technology, which is being amortized over a three-year period. Depreciation expense relates to the company’s fixed assets, which comprises of computer equipment and furniture. The $23,000 reduction to depreciation and amortization was attributed a greater amortization expense in the prior year which included an additional month of amortization related to the Groundbreaker, rebranded as Janover Connect, acquisition in November 2023.

Change in fair value of contingent consideration

In relation to the Groundbreaker, rebranded as Janover Connect, acquisition in November 2023, the Company recognized a contingent consideration liability in the amount of $179,000. This amount represented the fair value of the earnout provisions and probabilities related to the earnout provisions in the original asset purchase agreement. As of March 31, 2025, it was determined that two of the three earnout provisions were not achievable and the fair value of the liability was reduced by approximately $64,000, compared to $0 for the three months ended March 31, 2024. As of March 31, 2025, the contingent consideration liability was $115,000, and this amount will be further evaluated in future periods.

Other income

Other income for the three months ended March 31, 2025 was approximately $105,000 compared to other income of approximately $54,000 for the three months ended March 31, 2024, an increase to other income of approximately $51,000. The majority of the other income increase was due to a change in the fair value of marketable securities, as of March 31, 2025, resulting in an increase of approximately $85,000, offset by a decrease in interest income earned during the period.

Liquidity and Capital Resources

Our principal liquidity requirements are for working capital to fund our sales, marketing, research and development and administrative expenditures. To date, we have funded our liquidity requirements primarily through cash on hand, cash flows from operations, as well as equity and equity-related financing. As of March 31, 2025 and December 31, 2024, we had approximately $1.8 million and approximately $2.5 million of cash and cash equivalents, respectively. As of March 31, 2025, we had an accumulated deficit of approximately $10.1 million which included incurred net losses of approximately $778,000 and $964,000 during the three months ended March 31, 2025 and 2024, respectively. We had cash used in operations of approximately $786,000 for the three months ended March 31, 2025, compared to cash used in operations of approximately $1.1 million for the same period for the prior year.

Our business plan is focused on growth, as we transition away from transactional platform fee revenue and move more toward the more predictable subscription recurring revenue, to achieve significant market penetration over the shortest possible time horizon. As such, we intend to continue to invest in research and development, sales and marketing, and general and administrative expenses to drive that growth.

Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities:

Cash from operating activities

For the three months ended March 31, 2025, cash used in operating activities was approximately $786,000 compared to approximately $1.1 million for the three months ended March 31, 2024. The decrease in cash used in operating activities was the result of funding changes in our working capital balances, primarily accounts receivable, accounts payable and accrued expenses, deferred revenue, as well as our increased loss from operations in fiscal 2024.

Cash from investing activities

For the three months ended March 31, 2025, cash from investing activities were $0 compared to approximately $6,000 for the three months ended March 31, 2024. The decrease in cash used in investing activities was related to a reduction in the purchase of property and equipment in the three months ended March 31, 2025.

Cash from financing activities

For the three months ended March 31, 2025, cash provided by financing activities was approximately $70,000 compared to approximately $1,000 for the three months ended March 31, 2024. During the three months ended March 31, 2025, the Company issued approximately 13,000 shares of its common stock, raising approximately $70,000, in conjunction with its Form S-3 Registration Statement and ATM Sales Agreement. On April 15, 2025, we filed a prospectus supplement to increase our current ATM Sales Agreement from $1.5 million to $14.9 million. On May 5, 2025, we filed another prospectus supplement to increase our current ATM Sales Agreement from $14.9 million to $41.3 million, as we were no longer subject to the baby shelf S-3 limitation. Subsequent to March 31, 2025, the Company issued approximately 185,000 shares of its common stock, raising approximately $12.4 million, in conjunction with its Form S-3 Registration Statement and ATM Sales Agreement. We intend to continue to utilize the Form S-3 Registration Statement and ATM Sales Agreement for the raising of future capital in fiscal 2025. There is no guarantee that we will be successful raising the maximum proceeds from this capital raise. We expect to continue to generate operating losses for the foreseeable future as we focus on revenue growth, however we expect these operating losses to decline as we continue to grow our subscription software revenue.

Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting standards in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the valuation of assets acquired, and liabilities assumed pursuant to business combinations, including contingent consideration, and stock-based compensation. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Revenue Recognition

The Company accounts for revenue under ASC 606, Revenue from Contracts with Customers. The Company determines revenue recognition through the following steps:

• Identification of a contract with a customer;
• Identification of the performance obligations in the contract;
• Determination of the transaction price;
• Allocation of the transaction price to the performance obligations in the contract; and
• Recognition of revenue when or as the performance obligations are satisfied.

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between the customer payment and the transfer of goods or services is expected to be one year or less.

The Company derives its revenue primarily from platform fees and subscription revenue. Platform fees include referral and advisory fees generated from multifamily and commercial real estate and small business debt transactions. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and the promised services have been transferred to the customer. The Company’s services are generally transferred to the customer at a point in time, which is when the underlying lending transaction has closed and successfully funded. The Company may act as an agent for both lenders and borrowers.

Subscription revenue is derived from the following:

• Janover Pro, which was launched in 2024, is our online SaaS marketplace for multifamily and commercial real estate loans providing an online matchmaking service where borrowers or brokers can shop their loans, and lenders can provide financing and find more opportunities. Our customer pays for subscriptions which are generally on annual contracts, and we generate revenue from software as a service (“SaaS”) subscription fees, which are recognized over time, throughout the term of the customer contract.
• Janover Connect, formerly known as Groundbreaker and was acquired in 2023, is a SaaS platform to help real estate owners, operators, and developers raise capital and manage their investors. The platform streamlines the capital raising process by providing a professional investor portal where potential investors can analyze opportunities, sign documents, make investments, and track their investment portfolios. This real estate syndication software and investor portal, which primarily derives its revenue from SaaS subscription fees, which are recognized over time, throughout the term of the customer contract.
• Janover Insurance was launched in 2024. This Insurtech subsidiary derives revenue from subscriptions pertaining to annual insurance premium commissions received, which are recognized at the start of the annual term, when the insurance coverage is bound.
• Janover Engage, which is our equity marketplace, was launched in 2024. Janover Engage is a SaaS platform designed to connect real estate owners, operators, and sponsors raising capital using Reg D 506(c) with potential accredited investors. Janover Engage provides general partners (“GPs”) tools to market their offering and a platform on which to showcase it, making it easier for them to raise capital, build their pipeline, and focus on their next deal. Revenue is derived from the SaaS subscription fees, which are recognized over time, throughout the term of the customer contract.
• Janover AI, which was also launched in 2024, represents the next frontier in leveraging technology to optimize the real estate lifecycle. We have developed a generative AI platform that is trained on and programmed to understand the nuances of multifamily and commercial property capital markets, from debt, to equity, to operations. The revenue derived from these SaaS subscriptions will be recognized over the term of the SaaS agreement.

Acquisitions, Goodwill and Other Intangible Assets

The Company allocates the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess value of the cost of an acquired business over the estimated fair value of the assets acquired and liabilities assumed is recognized as goodwill. The Company uses a variety of information sources to determine the value of acquired assets and liabilities, including identifiable intangibles.

Goodwill and indefinite-lived intangibles are not amortized but are instead evaluated annually for impairment as part of the Company’s annual financial review, or when indicators of a potential impairment are present. The annual test for impairment performed for goodwill can be qualitative or quantitative, taking into consideration certain factors surrounding the fair value of the goodwill including, level by which fair value exceeded carrying value in the prior valuation, as well as macroeconomic factors, industry conditions and actual results at the test date. As of December 31, 2024 the Company determined that there was an impairment to the indefinite-lived Groundbreaker brand of approximately $83,000 during the fourth quarter of fiscal 2024. It was determined by the Company that the Groundbreaker brand name was less valuable and was deemed impaired. Due to this impairment the Company changed the Groundbreaker brand name to Janover Connect and is no longer marketing the Groundbreaker brand name. There was no impairment determined necessary as of March 31, 2025.

Stock-Based Compensation

We record stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employee’s required service period, which is generally the vesting period.

Off-Balance Sheet Arrangements

During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under SEC rules.

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate risks and inflation risks. Periodically, we maintain deposits in accredited financial institutions in excess of federally insured limits. We deposit our cash in financial institutions that we believe have high credit quality and have not experienced any losses on such accounts and do not believe we are exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Interest Rate Risk

Our cash consists of cash in readily available checking accounts. We may also invest in short-term money market fund investments. Such interest-earning instruments carry a degree of interest rate risk, however, historical fluctuations in interest income have not been significant.

Inflation Risk

Inflation generally affects us by increasing our cost of labor and research and development contract costs. We do not believe inflation has had a material effect on our results of operations during the periods presented.

Crypto Currency Treasury Risk

As part of our capital allocation strategy for assets that are not required to provide immediate working capital for our ongoing operations, we have invested and will continue to accumulate SOL. As of the date of this filing, we had purchased approximately $ 103 million of SOL, including staking rewards. The price of SOL has historically been subject to dramatic price fluctuations and is highly volatile. Moreover, digital assets, such as SOL, are relatively novel and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the liquidity or value of SOL.

Any decrease in the fair value of SOL could require us to incur an unrealized loss on the SOL investment, and such charge could be material to our financial results for the applicable reporting period, which may create significant volatility in our reported earnings. Any decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on the market price of our common stock. In addition, the application of generally accepted accounting principles in the United States with respect to SOL remains uncertain in some respects, and any future changes in the manner in which we account for our SOL assets could have a material adverse effect on our financial results and the market price of our common stock. In addition, if investors view the value of our common stock as dependent upon or linked to the value or change in the value of our SOL holdings, the price of SOL may significantly influence the market price of our common stock.

Historically, crypto markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currency 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 SOL at favorable prices or at all. Further, SOL we hold with our custodians and transact with our trade execution partners 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 or other capital raising transactions collateralized by our unencumbered SOL or otherwise generate funds using our SOL holdings, including in particular during times of market instability or when the price of SOL has declined significantly. If we are unable to sell our SOL, enter into additional capital raising transactions using SOL as collateral, or otherwise generate funds using our SOL holdings, or if we are forced to sell our SOL at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

Evaluation of Disclosure Controls and Procedures

With the participation of the Company’s principal executive officer and principal financial and accounting officer, management evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of December 31, 2024 and March 31, 2025. Based on their evaluation, the Company’s principal executive officer and principal financial and accounting officer concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2024 and March 31, 2025 to provide reasonable assurance that information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission’s (“SEC”) rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure, solely as a result of the material weaknesses in our internal control over financial reporting below.

Material Weaknesses in Internal Control Over Financial Reporting

In connection with the preparation of the Company’s consolidated financial statements as of December 31, 2024 and its unaudited condensed consolidated financial statements as of March 31, 2025, management identified material weaknesses in its internal control over financial reporting. The material weaknesses have not been remediated as of the date of this filing. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented, or detected and corrected, on a timely basis. The material weaknesses identified related to (i) the fact that the Company did not have a formalized system of internal control over financial reporting in place to ensure that risks are properly assessed, controls are properly designed and implemented and internal controls are properly monitored and functioning, (ii) the Company did not maintain a sufficient complement of formally documented general IT controls over access, segregation of duties, security, and change management, and (iii) the Company’s does not have sufficient accounting personal to ensure adequate segregation of duties. Management has concluded that these material weaknesses arose because the Company did not have the necessary business processes, personnel and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.

Effective internal controls are necessary to provide reliable financial reports and prevent fraud, and material weaknesses could limit the ability to prevent or detect a misstatement of accounts or disclosures that could result in a material misstatement of annual or interim financial statements. To address the material weaknesses, the Company will need to add personnel as well as implement additional financial reporting processes and related internal controls, as well as proper documentation of general IT controls over access, segregation of duties, security, and change management. Management intends to continue to take steps to remediate the material weaknesses described above through hiring additional qualified accounting and financial reporting personnel, further enhancing their accounting processes and risk assessment, and by designing, implementing and monitoring the respective controls. Management will not be able to fully remediate these material weaknesses until these steps have been completed and the controls have been operating effectively for a sufficient period of time. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects or that the actions that management may take in the future will be sufficient to remediate the control deficiencies that led to the material weaknesses in internal control over financial reporting or that they will prevent or detect potential future material weaknesses. The Company’s current controls and any new controls that management develops may become inadequate because of changes in conditions in the business and weaknesses in disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm the operating results or cause the Company to fail to meet the reporting obligations and may result in a restatement of the Company’s financial statements for prior periods.

Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of the internal control over financial reporting required to be included in the Company’s periodic reports that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in the Company’s reported financial and other information, which would likely have a negative effect on the trading price of its common stock. In addition, we would not be able to continue to be listed on Nasdaq, which could have an adverse effect on the liquidity of your investment. Our management will monitor the effectiveness of our remediation plans in fiscal 2025 and will make changes management determines to be appropriate.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control procedures over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our fiscal quarter ended March 31, 2025, that has materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

In connection with the Change of Control announcement on April 4, 2025, the Company is supplementing the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”), with the following risk factors. These risk factors should be read in conjunction with the risk factors included in the Form 10-K.

Our financial results and the market price of our common stock may be affected by the prices of Solana (“SOL”).

As part of our capital allocation strategy for assets that are not required to provide working capital for our ongoing operations, we may invest in SOL. The price of SOL has historically been subject to dramatic price fluctuations and is highly volatile. Moreover, digital assets, such as SOL, are relatively novel and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the liquidity or value of SOL.

Any decrease in the fair value of SOL could require us to incur an unrealized loss on the SOL investment, and such charge could be material to our financial results for the applicable reporting period, which may create significant volatility in our reported earnings. Any decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on the market price of our common stock. In addition, the application of generally accepted accounting principles in the United States with respect to SOL remains uncertain in some respects, and any future changes in the manner in which we account for our SOL assets could have a material adverse effect on our financial results and the market price of our common stock.

In addition, if investors view the value of our common stock as dependent upon or linked to the value or change in the value of our SOL holdings, the price of SOL may significantly influence the market price of our common stock.

If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our SOL assets, we may lose some or all of our SOL assets and our financial condition and results of operations could be materially adversely affected.

Security breaches and cyberattacks are of particular concern with respect to our investment in SOL. While we use highly reviewed and audited custody solutions, a successful security breach or cyberattack could result in a partial or total loss of our SOL assets in a manner that may not be covered by insurance or indemnity provisions of our custody agreements with those custodians. Such a loss could have a material adverse effect on our financial condition and results of operations.

We face other risks related to our SOL treasury reserve business model.

Our SOL treasury reserve business model exposes us to various risks, including the following:

• SOL and other digital assets are subject to significant legal, commercial, regulatory, and technical uncertainty, and our SOL strategy subjects us to enhanced regulatory oversight.
• Regulatory changes could impact our ability to operate validators or receive rewards.
• Regulatory scrutiny of the Company’s activities may increase, potentially limiting our operations.
• Potential litigation risks exist related to smart contract vulnerabilities, validator operations, or our business activities.
• We could be subject to lawsuits alleging violations of securities laws if SOL is deemed a security.
• If our SOL holdings and staking activities are deemed to meet the definition of an “investment company” under the Investment Company Act of 1940, we could face compliance obligations or enforcement actions.
• The Securities and Exchange Commission has previously referred to SOL as a potential security in enforcement actions against major exchanges, though those cases have since been dismissed.
• Our operations may be subject to enhanced scrutiny and compliance requirements if SOL is classified as a security in the future.
• Uncertainty around SOL’s regulatory status may impact our ability to list on certain exchanges.
• Changes in political administration may not guarantee a favorable regulatory environment for SOL.
• Future Securities and Exchange Commission actions or court decisions could retroactively classify SOL as a security, potentially leading to penalties or forced unwinding of transactions.
• Increased regulatory focus on Layer-1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements.