AVAX ONE TECHNOLOGY LTD.

Described below are certain risks to our business and the industry in which we operate. You should carefully consider the risks described below, together with the financial and other information contained in this Annual Report and in our other public disclosures. If any of the following risks actually occurs, our business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected. As a result, our future results could differ materially from historical results and from guidance we may provide regarding our expectations of our future financial performance, and the trading price of our common shares could decline.

Risk Factors Summary

The following is a summary of the principal factors that make an investment in our securities speculative or risky, all of which are more fully described below in this section. This summary should be read in conjunction with the full description of “Risk Factors” in this section and should not be relied upon as an exhaustive summary of the material risks facing our business. In addition to the following summary and the information in this section, you should consider the other information contained in this Annual Report before investing in our securities.

Risks Related to Our Business

We are an early-stage company with a limited operating history and a history of losses, and we may never become profitable.

Our company was incorporated and commenced operations in 2017. Our limited operating history makes it difficult to evaluate our business and predict our future results of operations. To date, our operations on a consolidated basis have not been profitable, and no assurances can be made that we will achieve profitability in the near future, if ever. From our inception through December 31, 2025, we sustained $93,977,325 in cumulative net losses, and we had net loss from continuing operations for the fiscal year ended December 31, 2025, of $31,994,535. We have generated losses as we implement our business plan, including the creation, maintenance and expansion of our digital asset treasury (“DAT”) strategy and, to a lesser extent, our Bitcoin Mining activities. The extent to which we will continue to recognize losses in our continuing operations is highly dependent on the extent to which we hold AVAX tokens as a main strategy and the price thereof. See the risk factors under the heading “Risks Related to the Company’s DAT Strategy and Cryptocurrency Holdings” below.

We expect to need additional financing to expand our operations, and we may not be able to obtain financing on acceptable terms, or at all, which could have a material adverse effect on our business, financial condition, results of operations, cash flow and prospects.

We have limited capital, and we do not currently generate sufficient cash from our business to fund our operations to fund our expansion. We will require additional capital to pursue our growth strategy through maintaining and expanding our existing digital asset treasury, engaging in acquisitions of complementary businesses or assets, and financing general and administrative activities. We may not be able to obtain debt or equity financing opportunities on favorable terms, if at all, which could impair our growth and adversely affect our existing operations. If we raise equity financing, our shareholders may experience significant dilution of their ownership interests, and the per share value of our common shares could decline.

Under current SEC regulations, because our public float is less than $75 million, and for so long as our public float remains less than $75 million, the amount we can raise through primary public offerings of securities in any 12-month period using shelf registration statements is limited to an aggregate of one-third of our public float (referred to as the “baby shelf” rule). As of March 24, 2026, the aggregate market value of our outstanding common shares held by non-affiliates, or public float, was approximately $52.0 million, based on 89,798,842 outstanding common shares, of which 80,075,911 common shares were held by non-affiliates, at a price of $0.65 per share, which was the last reported sale price of our common shares on the Nasdaq Capital Market on March 24, 2026. If our public float decreases, the amount of securities we may sell under our shelf registration statement may also decrease.

We have previously raised capital to finance our strategic growth of our business through public offerings of our common shares, including through our at-the-market offering program, and we expect to need to raise additional capital through similar public offerings to finance our current and future expansion initiatives. Utilizing those sources may be more challenging in the current financial market conditions, in particular where trading volume is diminished. We may not be able to obtain additional debt or equity financing on favorable terms, if at all, which could impair our growth and adversely impact our existing operations.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, shareholder ownership interest in the Company may be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect rights as a shareholder. Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as redeeming our common shares, making investments, incurring additional debt, making capital expenditures or declaring dividends.

If we do not have, or are not able to obtain, sufficient funds, we may have to delay strategic acquisitions and other opportunities, investments, or projects, and, even if we are ultimately able to subsequently secure financing, such opportunities, investments or projects may not still be available to us on favorable terms or at all. If we are unable to raise adequate funds, we may have to liquidate some or all of our assets, or delay, reduce the scope of, or eliminate some or all of our creative work. Any of these actions could delay or otherwise inhibit our growth, weaken our ability to effectively compete in our industry, and otherwise have a material adverse effect on our business, financial condition, results of operations, cash flow and prospects.

We have engaged in, and in the future may engage in, strategic transactions, investments and other arrangements that could disrupt our business, cause dilution to our shareholders, reduce our financial resources and harm our operating results.

We have previously engaged in strategic transactions, including acquisitions of Bitcoin Mining assets and AVAX tokens, and, in the future, we may pursue opportunities to engage in additional strategic transactions, including transactions with companies in financial distress. Our ability to grow through future transactions will depend on the availability of, and our ability to identify, suitable acquisition and investment opportunities at an acceptable cost, our ability to compete effectively to attract those opportunities and the availability of cash or financing to complete such acquisitions. Future acquisitions may require us to (i) issue common shares that would dilute our current shareholders’ percentage ownership, (ii) assume or otherwise be subject to liabilities of an acquired company, (iii) record goodwill and non-amortizable intangible assets that will be subject to impairment testing on a regular basis and potential periodic impairment charges, (iv) incur amortization expenses related to certain intangible assets, and (v) incur acquisition and integration costs, immediate write-offs, and restructuring and other related expenses.

Although we and our advisors conduct due diligence on the operations of the businesses we acquire, there can be no guarantee that we will be aware of all liabilities associated with an acquired company. These liabilities, and any additional risks and uncertainties related to an acquired company not known to us or that we may deem immaterial or unlikely to occur at the time of the acquisition, could negatively impact our future business, financial condition, and results of operations.

There is no guarantee that we will realize the intended benefits of any particular acquisition in a timely manner, to the extent anticipated or at all. We may experience difficulties integrating the operations, technologies and personnel of an acquired company, including difficulties associated with managing the resulting larger and more complex company, aligning administrative and corporate structures, standards, controls, procedures and policies, integrating business cultures, hiring and retaining key employees, conforming compensation and benefits structures, coordinating geographically dispersed operations, and delivering on our strategy going forward. Such integration may divert management’s attention from operating our business and may necessitate reallocating resources, both financially and otherwise.

The industries in which we participate are highly competitive, and we may be unable to successfully and profitably compete against companies with greater resources and capitalization.

Following our recent adoption of our DAT strategy, we face new and increased competition. Our ability to successfully implement our DAT strategy will depend upon our ability to generate sufficient cash flows or raise additional capital to allow us to continue to purchase digital assets as and when we determine it to be in line with our business plans. Our competitors have significant advantages over us, including a greater amount of available capital or the ability to raise additional capital on terms or in quantities not available or not acceptable to us, which may allow them to respond more quickly to new or changing market opportunities. If we are unable to access and deploy capital when market opportunities arise, we may be unable to profitably maintain our digital asset strategy and successfully compete, which may have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

If we are unable to attract and retain key personnel, we may not be able to compete effectively.

Our success has depended and continues to depend upon our ability to attract and retain key management, including our Chief Executive Officer and technical experts. Neither our CEO nor our CFO have long-term employment contracts. If we are unable to retain existing key employees and attract and retain sufficient additional employees to support resources, including due to the competition from others in our industry and any shortages in qualified personnel, our business, results of operations, sales, cash flow or financial condition could be materially adversely affected. The loss of any of our senior management or key employees could materially adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all. We do not maintain key person life insurance policies on any of our employees.

Risks Related to the Company’s DAT Strategy and Cryptocurrency Holdings

Our financial results and the market price of our common shares may be affected by the prices of AVAX and other digital assets we may hold.

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 plan to continue to invest in AVAX in addition to the immaterial amount of Bitcoin which we hold. The price of AVAX has historically been subject to dramatic price fluctuations and is highly volatile. In 2025, the price of AVAX ranged from $11.43 to $44.00. Moreover, digital assets, such as AVAX, 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 AVAX. In addition, because our DAT strategy is initially concentrated in AVAX, adverse developments specific to AVAX, including protocol-level failures, governance decisions, validator network instability, or ecosystem contraction, could disproportionately impact our financial condition.

Any decrease in the fair value of AVAX below our carrying value for such assets could require us to incur a loss due to the decrease in fair market value, 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 shares. In addition, the application of accounting principles generally accepted in the United States of America (“U.S. GAAP”), with respect to AVAX, may change in the future and could have a material adverse effect on our financial results and the market price of our common shares. In addition, if investors continue to view the value of our common shares as dependent upon or linked to the value or change in the value of our AVAX holdings, the future price of AVAX may significantly influence the market price of our common shares.

Under the Investment Company Act of 1940 (the “1940 Act”), a company generally will be deemed to be an “investment company” if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding, or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the 1940 Act, and cash items) on an unconsolidated basis. While we believe that AVAX and Bitcoin are unlikely to be considered an investment contract, and thus a security under the investment contract definition, we cannot provide any assurances that digital assets that we may mine or otherwise acquire or hold for our own account, including Bitcoin, will never be classified as securities under U.S. law. If we were to be deemed an investment company under the 1940 Act in the future, restrictions imposed by the 1940 Act—including limitations on our ability to issue different classes of shares and equity compensation to directors, officers, and employees and restrictions on management, operations, and transactions with affiliated persons—likely would make it impractical for us to continue our business as contemplated and may have a material adverse effect on our business, results of operations, financial condition, and prospects.

Regulatory developments related to crypto assets and crypto asset markets may adversely affect our business, financial condition, and results of operations.

As cryptocurrency and other digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of cryptocurrency. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, which could materially impact the price of cryptocurrency or the ability of individuals or institutions such as us to own or transfer cryptocurrency. For example, the U.S. executive branch and the SEC, among others in the United States and abroad, have been active in recent years, and the European Union’s Markets in Crypto Asset Regulation and the U.K.’s Financial Services and Markets Act 2023 became law. It is not possible to predict whether, or when, any of these developments will lead to the U.S. Congress granting additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional authorities, how additional legislation or regulatory oversight 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 cryptocurrency specifically. The consequences of increased or different regulation of digital assets and digital asset activities could adversely affect the market price of cryptocurrency and in turn adversely affect the market price of our common shares.

Our management team relies upon the advice of an asset manager through an asset management agreement to assist in building a narrowly focused investment strategy and the execution of the Company’s strategy and may not yield the desired return.

We have engaged an asset manager, Hivemind, to manage our cryptocurrency holdings and have adopted a treasury policy in which we plan to maintain a majority of our holdings in one to five decentralized finance digital assets, including AVAX. Hivemind’s Chairman, Matt Zhang, is also our Chairman, and Hivemind was the second largest investor in the Offering. Our management, our board of directors and such asset manager will have broad discretion in the application of the net proceeds from any offering by the Company and could utilize any such proceeds in ways that do not improve our results of operations or enhance the value of our common shares. The failure to apply any such funds effectively could result in financial losses that could cause the price of our common shares to decline.

Cryptocurrency price volatility may materially depress asset valuations, necessitating substantial cash reserves or liquidity buffers to maintain operational resilience. These risks are compounded by the lack of comprehensive regulation governing cryptocurrency trading platforms, which face material exposure to fraud, market manipulation, security breaches, and operational failures that could materially and adversely affect the value of our cryptocurrency holdings.

We may invest in even more cryptocurrencies in the future, which could materially and adversely affect our business, financial condition and results of operations, primarily due to the inherent price volatility of cryptocurrency and the impact of any future changes to accounting standards. Cryptocurrencies can be highly susceptible to sharp price swings, which can significantly impact our financial statements, especially under mark-to-market accounting. To mitigate these risks, companies holding significant amounts of cryptocurrencies must maintain substantial capital reserves to absorb potential declines in asset value without compromising their overall financial health. This heightened need for liquidity reflects the increased risk associated with holding cryptocurrencies and underscores the importance of robust risk management strategies when navigating the uncertainties of the digital asset market.

Digital asset trading platforms handling cryptocurrencies and particularly small-cap cryptocurrencies are relatively new and often operate without the oversight typical of regulated securities or commodities markets. Many platforms, particularly those based outside the United States, are subject to limited or inconsistent regulatory standards and often do not provide transparent information about their ownership, management, or compliance practices. This lack of oversight increases the risk of fraudulent activities such as artificial trading volume, wash trading, and market manipulation—issues that have been documented in unregulated cryptocurrency markets and could similarly affect cryptocurrency trading. Reports have indicated that a significant portion of trading volume on unregulated digital asset trading platforms may be artificially inflated or non-economic in nature.

Manipulative behavior on cryptocurrency exchanges can distort market prices and lead to unexpected losses for investors. As a result, reduced market confidence in these platforms could negatively impact the liquidity and value of cryptocurrencies. We may hold substantial amounts of cryptocurrencies and must be vigilant about these risks, as trading activity that is not reflective of genuine market interest can lead to volatility and potential losses.

The operational integrity of digital asset trading platforms is another critical risk factor. Many of these platforms may lack robust security measures, making them vulnerable to hacking, fraud, and other operational problems. As we may hold large quantities of cryptocurrencies, we must consider the risk of security breaches, which could materially and adversely affect our business, financial condition and results of operations.

If we or our third-party service providers experience a security breach or cyber-attack and unauthorized parties obtain access to our cryptocurrency, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our cryptocurrency and our financial condition and results of operations could be materially adversely affected.

Security breaches and cyber-attacks are of particular concern with respect to cryptocurrency. Blockchain-based cryptocurrencies and the entities that provide services to participants in the cryptocurrency ecosystem have been, and may in the future be, subject to security breaches, cyber-attacks, 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 digital asset exchange and reportedly stole over $400 million in digital assets from customers. A successful security breach or cyber-attack 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 cryptocurrency ecosystem or in the use of the cryptocurrency network to conduct financial transactions, which could negatively impact us.

We face significant risks relating to disruptions, forks, 51% attacks, hacks, network disruptions, or other adverse events or other compromises to the cryptocurrency blockchains, which could materially and adversely impact our business, financial condition and results of operations.

General Risk Factors

Our share price and trading volume have fluctuated in the past, have recently been volatile and may be volatile in the future, including for reasons that may be unrelated to our operating performance or prospects, and, as a result, investors in our common shares could incur substantial losses.

Our share price has fluctuated in the past, has recently been volatile and may be volatile in the future. The stock market in general and the market for cryptocurrency and digital asset companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result, investors may experience losses on their investment in our common shares. The trading price of our common shares has already been correlated, and, in the future, as we continue to expand our Bitcoin Mining business and our digital asset treasury, may be increasingly correlated, to the trading prices of the cryptocurrencies we hold, which are themselves volatile.

Additionally, certain companies have experienced significant and extreme volatility in their stock prices due to a sudden increase in demand for stock resulting in aggregate short positions in the stock exceeding the number of shares available for purchase, forcing investors with short exposure to pay a premium to repurchase shares for delivery to share lenders. This is known as a “short squeeze.” These short squeezes have led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company. Many investors who have purchased shares in those companies at an inflated rate face the risk of losing a significant portion of their original investment as the price per share declines steadily as interest in those stocks abates. While we have no reason to believe our shares would be the target of a short squeeze, there can be no assurance that they will not be in the future, and you may lose a significant portion or all of your investment if you purchase our shares at a rate that is potentially disconnected from our underlying value.

If we fail to meet all applicable Nasdaq Capital Market requirements and Nasdaq determines to delist our common shares, the delisting could adversely affect the market liquidity of our common shares, impair the value of your investment and adversely affect our ability to raise needed funds.

Our common shares are listed on the Nasdaq Capital Market. In order to maintain that listing, we must satisfy minimum financial and other requirements. On March 13, 2026, we received a notice from the Nasdaq Stock Market LLC (“Nasdaq”) stating that, for the last 30 consecutive business days, the closing bid price for our common shares had been below the minimum $1.00 per share requirement for continued listing on the Nasdaq Capital Market as set forth in Nasdaq Listing Rule 5550(a)(2). On March 20, 2026, we requested a hearing before the Nasdaq Hearings Panel, which request automatically stays any suspension or delisting action pending the results of the hearing and the expiration of any additional compliance period granted by the panel following the hearing. If we are unable to regain compliance with the minimum bid price requirement or if we fail to meet all applicable Nasdaq Capital Market requirements in the future and Nasdaq determines to delist our common shares, the delisting could adversely affect the liquidity and market price of our common shares and adversely affect our ability to obtain financing for the continuation of our operations. Any such delisting could also impair the value of your investment.

Our management team is, and, in the future, will be, required to devote substantial time to regulatory compliance, which may divert our attention from the day-to-day management of our business.

As a public operating company in the U.S., we incur significant administrative, legal, accounting and other burdens and expenses beyond those of a private company, including pursuant to U.S. securities laws and Nasdaq continued listing requirements, which are in addition to our reporting obligations under applicable Canadian national and provincial securities laws. Our management team is required to devote substantial attention to complying with those requirements, which may divert attention away from the day-to-day management of our business. Regulatory compliance is increasingly complex, and management may not have experience in all areas of public company compliance. The management team will seek assistance from external resources when appropriate for public company regulatory compliance and tax regulatory compliance for applicable jurisdictions. Any such engagement with external resources could create additional monitoring obligations and have the potential to increase risk in our system of internal control. Any failure to maintain an effective system of internal controls (including internal control over financial reporting) could limit our ability to report our financial results accurately and on a timely basis, or to detect and prevent fraud and could expose us to regulatory enforcement action and shareholder claims.

Furthermore, we are required to comply with Section 404(b) of the Sarbanes-Oxley Act of 2002. As a non-accelerated filer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, but we are required to document and test our internal control procedures and prepare annual management assessments of the effectiveness of our internal control over financial reporting. Therefore, our internal controls over financial reporting will not receive the level of review provided by the process relating to the auditor attestation included in annual reports of issuers that are subject to the auditor attestation requirements, which may adversely impact market perception of our business and our common shares. Our assessments must include disclosure of identified material weaknesses in our internal control over financial reporting. The existence of one or more material weaknesses could affect the accuracy and timing of our financial reporting. Testing and maintaining internal control over financial reporting involves significant costs and could divert management’s attention from other matters that are important to our business. Additionally, we may not be successful in remediating any deficiencies that may be identified. If we are unable to remediate any such deficiencies or otherwise fail to establish and maintain adequate accounting systems and internal control over financial reporting, or we are unable to continue to recruit, train and retain necessary accounting and finance personnel, we may not be able to accurately and timely prepare our financial statements and otherwise satisfy our public reporting obligations. Any inaccuracies in our financial statements or other public disclosures (in particular, if resulting in the need to restate previously filed financial statements), or delays in our making required SEC filings, whether as a result of the lack of effectiveness of our internal control over financial reporting or disclosure controls and procedures or otherwise, could have a material adverse effect on the confidence in our financial reporting, our credibility in the marketplace and the trading price of our common shares.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be shareholders’sole source of gain.

We have not paid, and do not plan to pay in the immediate future, any cash dividends with respect to our common shares. We plan to reinvest all of our earnings, to the extent we have earnings, in order to cover operating costs and to otherwise become and remain competitive. We cannot assure shareholders that we will, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common shares as a dividend. Therefore, shareholders should not expect to receive cash dividends on our common shares. Any future determination to pay cash dividends will be at the discretion of our board of directors and will depend on applicable law and then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business opportunities and other factors our board of directors may deem relevant. As a result, capital appreciation, if any, of our common shares will be shareholders’ sole potential source of gain for the foreseeable future.

For so long as we qualify as an“emerging growth company,”we will be subject to scaled disclosure and compliance requirements, which will provide our shareholders with less information about us.

For so long as we remain an “emerging growth company” as defined in the JOBS Act, we expect to take advantage of the exemptions from various SEC reporting requirements available to “emerging growth companies,” including, but not limited to:

Because of those disclosure and compliance accommodations, our shareholders would be left without information or rights available to shareholders of more mature companies. We cannot predict whether investors will find our common shares less attractive if we rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

We are also a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act and have elected to follow certain scaled disclosure requirements available to smaller reporting companies.

If we are classified as a passive foreign investment company for U.S. federal income tax purposes, U.S. holders of our common shares (or securities exercisable for or convertible into our common shares) may suffer adverse tax consequences.

We would be classified as a passive foreign investment company (“PFIC”) for any taxable year if, after the application of certain look-through rules with respect to the income and assets of our corporate subsidiaries in which we own at least 25% (by value) of the shares, either: (i) 75% or more of our gross income for such year is “passive income” (as defined in the relevant provisions of the Internal Revenue Code of 1986, as amended (the “Code”)), or (ii) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income. If we are a PFIC for any taxable year during a U.S. holder’s holding period for our common shares, we generally will continue to be treated as a PFIC with respect to such holder’s investment in the common shares for all succeeding years during which such holder holds the common shares.

If we are classified as a PFIC, and a U.S. shareholder does not make a timely election to treat us as a “qualified electing fund,” or “QEF,” or a “mark-to-market” election with respect to our common shares, the U.S. shareholder would be taxable on gain recognized on a disposition of our common shares and upon receipt of certain “excess distributions” (generally, distributions that exceed 125% of the average amount of distributions in respect of the common shares received during the preceding three taxable years or, if shorter, during the U.S. shareholder’s holding period prior to the distribution year) as if such income had been recognized ratably over the U.S. shareholder’s holding period. Tax would be computed on such income at the highest ordinary income tax rate in effect for each taxable year to which income is allocated, and an interest charge on the tax as so computed would also apply. Additionally, dividends received with respect to the common shares will not qualify as “qualified dividends” eligible for taxation at reduced federal income tax rates.

The tests for determining PFIC status are applied annually. Whether we were a PFIC for the year ended December 31, 2025, or will be a PFIC for the current or future taxable years will depend on the composition of our income and assets and the value of our assets from time to time. If we are or do become a PFIC, U.S. shareholders who hold common shares during any period when we are a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC, subject to exceptions for U.S. holders who made timely QEF or mark-to-market elections or certain other elections.

If we are or do become a PFIC for our current taxable year or any future taxable year, in addition to U.S. holders of our common shares, a U.S. holder of our securities exercisable for or convertible into our common shares during any year in which we are a PFIC would be adversely affected under the foregoing rules even if we cease to be a PFIC. Such U.S. holders should consult their own tax advisers concerning the potential application of the PFIC rules to their investment.

We may become subject to litigation, which may have a material adverse effect on our reputation, business, results from operations, and financial condition.

We may be named as a defendant in a lawsuit or regulatory action. We may also incur uninsured losses for liabilities which arise in the ordinary course of business, or which are unforeseen, including, but not limited to, employment liability and business loss claims. Any such losses could have a material adverse effect on our business, results of operations, sales, cash flow or financial condition.