Credit and liquidity · Credit risk and customer defaults
We are subject to counterparty risks, including risks and uncertainties relating to our Custodians. We rely on our Custodians, NYDIG and Coinbase, to safeguard our bitcoin using cold storage. If a Custodian were to be in breach of its agreement, our digital assets could be compromised.
Capital structure and performance · Debt management and refinancing
We have financed our strategic growth through issuances of common stock and debt and expect to continue raising additional capital in the future, and our inability to do so on favorable terms could adversely affect our operations and the market price of our securities. If we incur additional indebtedness, lenders may have priority over holders of our common stock with respect to repayment and liquidation preferences.
Credit and liquidity · Access to capital and financing
We may be unable to access sufficient additional capital needed to grow our business. We expect to require substantial additional capital to support the expansion of our operations, pursue our growth strategies, and respond to competitive pressures or unanticipated working-capital needs. If we are unable to raise the additional capital needed to fund our strategic growth initiatives, we may be less competitive in our industry.
Market and investment · Market volatility and economic cycles
Our success depends on external factors affecting the bitcoin industry. The bitcoin industry has historically been subject to various asset-related risks that have negatively affected bitcoin's market price. Any material decline in the price of bitcoin could adversely affect our business, financial condition, and results of operations.
Capital structure and performance · Financial performance volatility
We have a history of operating losses, and we may report additional operating losses in the future. We have recorded historical operating losses and negative cash flows from operations, particularly during periods in which the value of the bitcoin we mined did not exceed the associated operating, energy, personnel, and capital costs of our Bitcoin Mining activities.