EXOD Exodus Movement Inc (QX)

15418 Weir Street #333 Omaha, NE 68137⁽¹⁾

(833) 992-2566

Securities to be registered pursuant to Section 12(b) of the Act: None.

Securities to be registered pursuant to Section 12(g) of the Act: Class A Common Stock, par value $0.000001 per share.

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

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

Exodus Movement, Inc. is filing this Amendment No. 4 to its Registration Statement on Form 10 (“this Report”) to register our Class A common stock, par value $0.000001 per share (the “Class A Common Stock”), pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We filed the initial registration statement on Form 10 on February 28, 2024, Amendment No. 1 to the registration statement on Form 10 on May 1, 2024, Amendment No. 2 to the registration statement on Form 10 on July 10, 2024 and Amendment No. 3 to the registration statement on Form 10 on August 27, 2024. This registration statement automatically became effective on April 28, 2024, 60 days following the initial filing thereof. As a result, we are currently subject to the requirements of Section 13(a) of the Exchange Act and are required to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. We are also subject to the proxy rules in Section 14 of the Exchange Act, and our directors, executive officers and principal stockholders are subject to the reporting requirements of Sections 13 and 16 of the Exchange Act.

We are an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”). We are also a “smaller reporting company” as defined in Exchange Act Rule 12b-2. As such, we may elect to comply with certain reduced public company reporting requirements in future reports that we file with the Securities and Exchange Commission (the “SEC”).

Unless the context requires otherwise, in this Report, the terms “we,” “us,” “our,” the “Company,” “Exodus” and the “Registrant” refer to Exodus Movement, Inc. and its wholly-owned subsidiaries, Proper Trust AG, 3ZERO, LLC, OSMIUM, LLC and Osmium Europe B.V. Our company operates completely virtually. Our primary telephone number is +1 (833) 992-2566. Our principal internet website address is www.exodus.com. The information on our website is not incorporated by reference into, or a part of, this Report.

This Report contains “forward-looking statements,” as that term is defined by the federal securities laws. All forward-looking statements are based upon our current expectations and various assumptions and apply only as of the date of this Report. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs and projections will be achieved. Forward-looking statements are generally identified by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “forecast,” as well as variations of such words or similar expressions. Forward-looking statements include statements concerning:

There are a number of risks, uncertainties, and other important factors that could cause our actual results to differ materially from those suggested by our forward-looking statements, including those set forth in “Item 1. Business” and “Item 1A. Risk Factors” of this Report. All forward-looking statements are expressly qualified in their entirety by such cautionary statements. We undertake no obligation to update or revise any forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

We launched Exodus in 2015 to create a wallet that enables users to securely control and manage digital assets in an easy and straightforward way, without compromising users’ privacy or the security of their digital assets. Exodus’ mission is to help its wallet users (“users”) exit the traditional finance system through an un-hosted self-custodial platform (the “Exodus Platform”) that provides access to the world of decentralized finance and the power of blockchain. On desktop and mobile devices alike, Exodus delivers a simple, elegant, and intuitive experience where users can send, receive and store over 100,000 digital assets. Depending on availability and jurisdiction, users can also access the services offered and performed by various independent, third-party application programming interface (“API”) providers (“API Providers”), which include digital asset exchanging, fiat onboarding and staking for over 21,000 digital assets. In addition, the Exodus Platform integrates other third-party applications (“apps”), such as news apps.

We aim to enable our users to leverage the power of digital assets in an easy and straightforward way, without compromising their privacy or the security of their digital assets. Management believes we accomplish this by:

Exodus was founded in 2015 by Jon Paul Richardson, our CEO and a member of our board of directors, and Daniel Castagnoli, the President of our wholly-owned subsidiary, 3ZERO LLC, and a member of our board of directors. Messrs. Richardson and Castagnoli together control approximately 85% of the voting power of our outstanding capital stock, and holders of our Class B common stock collectively control 98% of the voting power of our outstanding capital stock. As a result, we would be considered a “controlled company” within the meaning of the corporate governance standards of the NYSE American LLC, the national exchange on which we have applied to list our Class A common stock (the “NYSE American”), and may be exempt from certain stock exchange corporate governance requirements if we were to list on the NYSE American in the future, as described further in “Item 1A. Risk Factors – Risks Related to Ownership of Our Common Stock - We are currently a “controlled company” and, as a result, qualify for and could rely on exemptions from certain corporate governance requirements.” We are registering our Class A Common Stock pursuant to Section 12(g) of the Exchange Act, on this Report.

We operate in the Financial Technology (“FinTech”) subsector of the greater blockchain and digital asset industry. The following are descriptions of key technologies used in our industry:

Blockchain Technology—Blockchain technology utilizes an open, distributed ledger managed by a peer-to-peer network to record transactions between parties linked to the blockchain. The Bitcoin blockchain, and other blockchains such as those of Ethereum and Litecoin, can be thought of as public record books of digital asset transactions. These record books are “decentralized” in that they are copied and stored across a network of computers around the world.

For example, the Ethereum Blockchain is a distributed public blockchain network focused on running the programming code of decentralized applications. These decentralized applications use self-executing contracts, also known as smart contracts, to seamlessly facilitate activities on the Ethereum Blockchain. The smart contracts on the Ethereum Blockchain are powered by Ether, the Ethereum Blockchain’s native digital asset, which is also traded as a cryptocurrency.

Accessing multiple blockchains and decentralized applications typically requires downloading complicated software specific to each blockchain and requires configuration decisions executed by technically skilled specialists. Methods of storing and leveraging digital assets are fragmented across multiple platforms compared to a traditional single hub. As a result, blockchain technology has a reputation of being difficult to access and use, and many of the current options for managing digital assets do not provide integrated or seamless solutions. Exodus and the API Providers Exodus contracts with allow users to access multiple blockchains through the API Providers’ platform.

Digital Assets—Digital assets include assets that are digitally represented on the blockchain such as tokens, non-fungible tokens (“NFTs”) and cryptocurrencies.

Cryptocurrency—A cryptocurrency is a type of digital asset that exists on a particular blockchain and can be moved from one party to another party on that blockchain. On the Exodus Platform, cryptocurrency is held directly by its owners and is immediately transferable, subject to applicable jurisdictional law.

There are five primary categories of cryptocurrency:

Each cryptocurrency is stored on a particular blockchain. The blockchain used by each cryptocurrency keeps a record of the blockchain address and the amount of cryptocurrency held at a particular address. A private key is required to access the cryptocurrency held at any single address.

Private and Public Keys—Digital asset “keys” enable users to manage digital assets on the blockchain. All transactions occurring on the blockchain are available for anyone to see. There are two types of keys: public keys and private keys. Transactions are identified publicly by the participants’ public keys, and participants use their private keys to verify their identity as the rightful owner of the assets associated with their public keys.

Key Management Solutions: Custodial vs. Self-Custodial—The person or entity that holds the private key for a public wallet address controls the assets stored in that wallet. Private key management solutions generally fall into two broad categories: custodial and self-custodial key management.

Within a custodial key management structure, a company or platform generates the private keys for their users’ wallets and administers any and all digital assets sent to the addresses tied to those private keys. Custodial key management solutions become custodians of their users’ digital assets and in that respect are extremely similar to centralized banks.

Self-custodial key management is a solution in which a person or entity generates and secures their own private keys, using software or other means, and administers all digital assets that are sent to the address tied to those private keys. Self-custodial key management solutions are not custodians of digital assets in their users’ wallet, but are merely repositories for the digital assets, similar to the way a physical safe or leather wallet provides a means for people to secure their own wealth. Users are solely responsible for securing the digital assets and the associated cryptographic key information and protecting them from loss, theft or other misuse. See “Item 1A. Risk Factors – Risks to Our Business – Our platform or our API Providers’ platforms may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams, which could adversely affect our business.”

While the majority of people use custodial key management solutions, we believe that custodial key management solutions serve merely as a temporary bridge between traditional institutionalized financial systems and the financial freedom offered by complete self-custodial control over one’s digital assets.

Blockchain-based Financial Technology—Although the traditional banking system does offer protection against theft through devices such as Federal Deposit Insurance Corporation (“FDIC”) insurance in the United States, banks are typically subject to regulation that provides governmental entities with the ability to freeze or take control of a customer’s bank assets.

Self-custodial holding of digital assets offers consumers a payment option that does not rely on the traditional banking system. We believe that as more people begin to hold digital assets, they will look for new ways to interact with their digital assets. We believe that digital assets have significant advantages over traditional fiat currency, particularly when used on self-custodial platforms. Unlike fiat currency held in traditional banks, digital assets on self-custodial platforms are designed to be available without limited operating hours, restrictions on when markets open and close, or bank holidays. Digital assets can also be transferred in real time, as the underlying technology is designed to avoid lengthy settlement periods, and often with no or low fees. However, transfer fees and settlement times can vary depending on various factors, such as network congestion. If transactions are successfully completed, digital assets will always end up at the wallet address to which they are sent with a proof of receipt forever etched in the blockchain, which functions as a public ledger. Most importantly, holders of digital assets that are self-custodial maintain full control of their digital assets. Users of self-custodial systems do not need to rely on any bank or custodian entity to provide access to their own assets.

Wallets—Wallets are a software-based technology that allows users to manage their private keys that grant access to the blockchain addresses where their digital assets are stored. They do not actually store digital assets the way one might store a twenty-dollar bill in a physical leather wallet. Rather, the digital assets remain stored at a particular blockchain address on the relevant blockchain, as described above in “—Private and Public Keys.”

There are two recognized categories of wallets: hot wallets and cold wallets. Hot wallets are connected to the internet in some way and typically reside on a website, desktop or inside a mobile phone, with the holder’s private keys stored

digitally. Typing one’s private key into a hot wallet will “unlock” the digital assets stored at the address identified by the private key so the user can then access the digital assets. Cold wallets are physical devices, not connected to the internet, that store the holder’s private keys. Generally, digital assets stored in hot wallets are more easily accessible; however, access to the internet means that the user must maintain effective internet security practices to protect their wallet. On the other hand, the downside to using cold wallets is that they are not as easily accessible and are typically used only for long-term storage of digital assets.

Often wallets have cumbersome interfaces, better suited to people who are very familiar with coding and computer processing than to consumers who want a straightforward, easy-to-use interface. For example, the private key that our users must enter to utilize the digital assets in their wallets on the Exodus Platform is an alphanumeric code with hundreds of digits, which, if lost, renders the assets in the wallets lost. In addition, many other wallets do not cover a sufficiently wide variety of digital assets, thereby requiring customers to maintain different wallets for different digital assets. For wallets that offer services such as the exchanging of one digital asset for another, these services may be difficult to use. Most significantly, wallets are often maintained by centralized exchanges, where the company that controls the technology of the wallet holds onto the private keys, which gives the wallet creator control over the digital assets that can be accessed with those private keys.

In recent years, the SEC and U.S. state securities regulators have stated that certain digital assets or digital asset products may be classified as securities under U.S. federal and state securities laws. Given the fact-intensive nature of the “security” analysis under the applicable legal standard, there is a lack of certainty with respect to whether a particular digital asset, product, or service will be deemed to be a security by the SEC or by U.S. federal or state courts. A number of enforcement actions and civil lawsuits have been brought against developers, sponsors and issuers of digital assets and digital asset products, as well as against trading platforms that support digital assets, in which the SEC has taken the position that certain digital assets are securities, including certain digital assets supported by the Exodus Platform. These digital assets include, but are not limited to, Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA) and Axie Infinity (AXS). Several foreign governments have also issued similar warnings cautioning that certain digital assets, including certain digital assets supported by the Exodus Platform, may be deemed to be securities under the laws of their respective jurisdictions. For more information regarding the regulatory environment of our industry, see “Item 1. Business – Regulatory Environment.” See also “Item 1A. Risk Factors – Risks Related to Regulation – Certain digital assets traded using third-party services integrated within our platform or other programs could be viewed as “securities” for purposes of federal or state regulations and could subject us to regulatory scrutiny, inquiries, investigations, fines and other penalties.”

Exodus has developed proprietary software, the Exodus Platform. Since the creation of the Exodus Platform, it has been downloaded over 12.4 million times as of December 31, 2023 and was downloaded approximately 2.8 million times during 2023. We offer all versions of the Exodus Platform to users as a free download. The Exodus Platform currently supports fungible cryptocurrency assets ledgered on public blockchains as well as non-fungible tokens ledgered on public blockchains. On desktop and mobile devices alike, Exodus delivers a simple, elegant, and intuitive experience where users can send, receive and store over 100,000 digital assets. Users can also access the services offered and performed by our API Providers that allow users to engage in services such as digital asset exchanging, fiat onboarding and staking products for over 21,000 digital assets. When signing up for an account on the Exodus Platform, among other requirements, users must certify that they are at least 18 years of age (if a natural person), agree to our Terms of Service, and have read our privacy policy.

The products we offer directly through the Exodus Platform include storing, sending, and receiving digital assets through the wallet functionality. Our users are able to send digital assets by inputting a public blockchain address and an amount to transfer, and are able to receive digital assets by providing the sending party with the users’ own public blockchain address. The Company’s involvement in these transfers is generally limited to providing a visual interface to access the blockchain. We do not take possession of the user’s assets and have no access to the user’s public or private keys. Instead, we apply a streamlined interface to the services provided by third-party API Providers. Exodus and our wholly-owned Swiss subsidiary, Proper Trust AG, enter into API agreements with these third-party providers that serve both U.S. and non-U.S. users. We have two international subsidiaries, Proper Trust AG and Osmium Europe B.V. Once operational, we expect Osmium Europe B.V. to handle European fiat onboarding agreements.

We also provide consulting services, such as wallet design, and other services, such as lightning network wallet services. See “Note 2—Summary of Significant Accounting Policies—Revenue Recognition” to our consolidated financial statements included in this Report. During the first half of 2022, we ceased providing gaming services on the Exodus Platform and we currently have no future plans to provide gaming services on the Exodus Platform.

The Exodus Platform supports network forks on a per-fork basis and only where it makes sense for our business and our users to do so. When determining whether the Exodus Platform will support a network fork, we evaluate various metrics, including feedback from our users and our API Providers, social engagement, and the projected overall market demand for the fork. Exodus informs users as soon as practical after it becomes aware of future supported forks through knowledge base articles and/or messaging within the Exodus Platform itself. In the event Exodus does not support a fork, a user can access the unsupported fork by using a competitor’s wallet platform that does support the fork by importing their private key or mnemonic seed phrase into that competitor’s wallet. Exodus does not currently inform users of airdrops and currently has no plans to do so in the foreseeable future.

The Exodus Platform provides users with information on digital asset prices and other relevant market data, such as news articles and historical pricing where available. This information is independent from the actual digital asset price presented by third-party API Providers in connection with a potential transaction. Exodus does not charge users to access this pricing information, which comes from two industry-leading pricing services. CoinMarketCap, the primary provider; and Coingecko, the secondary provider. Exodus uses a third pricing service, CryptoCompare, as an additional verification source but does not display pricing information from CryptoCompare. The Exodus Platform defaults to displaying digital asset prices using the primary provider’s pricing information. The Exodus Platform will only use the secondary provider’s price in place of the primary provider’s price if there is a material variance between the primary and secondary providers’ prices, and certain other conditions are met. To check for material variances, the Company uses an algorithm to compare the primary and secondary providers prices for each digital asset every 60 seconds. If there is no material variance between the primary and secondary providers’ prices, the Exodus Platform will display the primary provider’s price. If there is a material variance between the primary and secondary providers’ prices, the Exodus Platform will display the secondary provider’s price, but only after the algorithm confirms no material variance exists between the secondary provider’s price and the price provided by the additional verification source, CryptoCompare. If there is a material variance in price across all three of the primary and secondary providers and the additional verification source, the Exodus Platform will continue to show the primary provider’s most recently available price before the variance occurred and until such variance no longer exists, with the algorithm checking every 60 seconds.

This comparison process is designed to avoid inaccurate data from a single source. We believe that offering pricing services on the Exodus Platform simplifies the user experience as compared to other wallets that do not provide a pricing service. However, because the pricing information on the Exodus Platform is made available to any user, users may use the Exodus Platform solely for this pricing information and may not otherwise engage in transactions with our third-party API Providers.

We serve third-party API Providers by integrating their services such as digital asset exchanging, fiat onboarding and staking products into the Exodus Platform through an API agreement. Our business is dependent on the successful integration of these third-party API Providers as the majority of our revenue is earned by charging API Providers fees for services offered to our users. For services offered by API Providers to persons located in the United States, we charge fees based on a volume-based, tiered monthly subscription structure payable to us in arrears once a month. For services offered by API Providers to persons located outside the United States, we generally utilize a transaction-based structure to charge API Providers a percentage of the underlying value of the digital asset transaction. We expect to continue our subscription-based model for services offered by API Providers to persons located in the United States.

While we do not engage in trading of digital assets on our platform or otherwise engage in the business of effecting transactions in securities for the account of others on our platform, we receive compensation from the API Providers that have connected to our Exchange Aggregator. It is possible that a receipt of compensation based on the percentage of digital assets exchanged could be deemed to be the receipt of transaction-based fees for facilitating transactions in unregistered securities, and that we could be found to be facilitating or engaged ourselves and in violation of the federal and state securities laws, which could have a negative effect on our business, financial condition and results

of operations. Historically, approximately 25% of our active users have been located in the U.S. at any given time. See “Item 1A. Risk Factors – Risks Related to Regulation – Regardless of the revenue structure for our Exchange Aggregator, we could be deemed a broker-dealer because certain digital assets on the Exodus Platform may currently be deemed to be securities, and we would likely experience difficulty in complying with the broker-dealer financial responsibility rules.”

Exodus or its subsidiaries maintains agreements with each individual API Provider. Both the transaction-based and subscription-based API agreements that generate substantially all of our total revenue have indefinite terms and may be terminated by us or the counterparty exchange at any time, and without damages, upon seven days’ prior written notice. API agreements generating a small percentage of our total revenue have similar termination provisions but contain longer termination notice periods, e.g., thirty days. Either party may also immediately terminate the agreement in the event of a breach of law or uncured breach of contract, including by, negligence, recklessness, or willful or fraudulent misconduct by, or the bankruptcy of the other party, or if the API integration becomes prohibited by applicable law, regulation, rule or directive. In the event of such termination, our agreements with transaction-based providers mandate that the API Provider pay all outstanding fees for completed services. The form of API agreements (both the form U.S. agreement and the form international agreement) are attached as exhibits to this Report. An updated list of Exodus’ API Providers is available within the terms of service located on Exodus’ website. Our API Providers as of August 26, 2024 are set forth in the table below, including the jurisdiction of each and the services provided to users of our platform by each, including whether the API provides such services to U.S. persons. We also maintain a list of our API Providers in our Terms of Use, which we update on a periodic basis. Our Terms of Use is available through the “Terms of Use” link located at the bottom of our website at www.exodus.com. The information on our website is deemed not to be incorporated in this Report.

The principal services offered and performed by our API Providers are described below.

Exchange Aggregation—The Exodus Platform is accessible through our desktop, browser extension, and mobile platforms where users may access the services that are offered and performed by our API Providers that allow users to engage in digital asset exchanges for over 21,000 digital assets without having to access centralized exchanges or trade across multiple order books, depending on API Provider, availability and jurisdiction.

Exodus’ API Providers provide the connection with the exchanges, and the Exchange Aggregator essentially eliminates the interim step of converting the digital asset to Bitcoin (or other intermediate digital asset). By removing this interim step, the Exchange Aggregator is designed to increase the likelihood that users will receive the best pricing, liquidity and order fulfillment time as compared to users that manually search across multiple third-party API Providers, which are typically non-U.S. third-party exchanges and Decentralized Finance (DeFi) platforms that use blockchain technology and cryptocurrency to manage financial transactions through peer-to-peer relationships instead of centralized institutions. For example, without the Exchange Aggregator, if a user seeks to swap Bitcoin for Ethereum on a centralized exchange, a user may be required to first swap Bitcoin for USDC and then swap USDC for Ethereum. During this two-step process, it may be more likely that pricing, liquidity and order fulfillment time may fluctuate across multiple third-party API Providers. The Exchange Aggregator essentially eliminates this interim step and enables users to swap/exchange one supported digital asset (e.g., Bitcoin) for another (e.g., Ethereum).

The API Provider selected for each swap request is determined by an algorithm developed by Exodus, but Exodus has neither control nor discretion over any specific user transaction and users are free to consummate digital asset transactions away from the Exodus platform. The algorithm identifies which API Providers support the asset pair (not every API Provider offers services for all 21,000 digital assets) and which API Provider provides the best pricing. The user that requests the Exchange Aggregator to provide proposed trade pricing information receives a message specifying how much of the swapped asset they will receive in exchange for the user’s original digital asset, and the fees to be charged by the API Provider. Users may utilize the digital asset pricing information independently offered on the Exodus Platform to compare an API Provider’s proposed trade pricing information the user receives through the Exchange Aggregator. Once a user “clicks” on the Exchange Aggregator to connect with an API Provider exchange that is algorithmically selected to complete the desired swap, Exodus has no further involvement or role in the ultimate transactions that occur between users and API Providers. Moreover, Exodus does not know, or independently conduct diligence with respect to, the third parties with which our API Providers contract, including the exchanges and market makers with which our API Provider’s contract to support the services they provide to their users (including any users from the Exodus Platform), and Exodus does not know the jurisdictions in which those third parties operate. As a result, we cannot assure users as to the processes and procedures our API Providers use to engage such third parties, which exposes Exodus Platform’s users to risk that such third parties may fail to operate as reasonably expected. See “Item 1A. Risk Factors – Risks Related to Our Business – We do not conduct diligence with respect to the exchanges, market makers and other third parties our API Providers may contract with to conduct the services they provide to our users.”

Once the user agrees to the pricing, the API Provider will process a user’s order (usually in under an hour), the user will transfer its digital assets to the API Provider in accordance with the API Provider’s terms of service and internal operations and the API Provider will deliver the exact amount of the new digital asset to the user’s Exodus Wallet minus the API Provider’s fees. The API Providers’ fees are determined solely by each API Provider and are inclusive of the costs associated with transferring crypto assets from the user’s wallet to the API Provider. The Exchange Aggregator searches for the best pricing (inclusive of the API Provider’s fee), liquidity and order fulfillment time and passes through the pricing information to the user. The Exchange Aggregator does not support fiat currencies, and the Exchange Aggregator will not enable the exchange of fiat currency for digital assets or the exchange of digital assets for fiat currencies. The Exchange Aggregator does not support NFT exchanges. For a digital asset to be supported by the Exchange Aggregator, pricing must be available. An updated list of Exodus’ API Providers is available within the terms of service located on Exodus’ website.

Since the creation of the Exodus Platform, our users have used our API Providers’ services to swap approximately $12.3 billion of digital assets as of December 31, 2023. During 2023, our users used our API Providers’ services to swap approximately $2.7 billion of digital assets. See “Note 3—Revenue Recognition” to our consolidated financial statements included in this Report for more information on the Company’s operating revenues disaggregated by geography, based on the addresses of the Company’s API Providers.

Fiat on and off-ramps—Fiat on-ramps, powered by API Providers such as Ramp network, facilitate an exchange for users to buy digital assets with fiat currency through bank transfer, credit or debit card and Apple Pay. Where available, users can access these services to use 30 different fiat currencies, including major currencies such as the U.S. Dollar, EURO, and British Pound Sterling, to buy digital assets. Through our API Providers, users can sell digital assets for fiat currency and transfer such currency to their bank account utilizing the off-ramp, which is currently powered by API Providers such as MoonPay and Sardine. Users can exchange U.S. Dollar, EURO, and British Pound Sterling for crypto via MoonPay where available.

The Company is not responsible for the fulfillment of any transactions between the user and an API Provider, the availability of specific digital assets or fiat currencies, or the pricing related to any transaction between the user and an API Provider. The Exodus interface uses information supplied directly by our API Providers to display users with the fiat currencies they may use to purchase supported digital assets and the digital assets that users may exchange for supported fiat currencies. Users can use the Exodus Platform to preview a desired fiat on and off-ramp transaction by entering the specific amount of fiat currency they wish to use to purchase the desired digital assets, or the amount of a digital asset they wish to exchange for their desired fiat currency. Our API Providers make decisions as to which digital assets and fiat currencies they support and, as a result, our users’ ability to transact in a particular fiat currency or digital assets, as the case may be, depends on whether one or more API Providers supports a particular digital asset or fiat currency. Further, digital assets and fiat currencies offered by API Providers are subject to change, and previously supported digital assets or fiat currencies may become unavailable to users.

When a user desires to proceed with the purchase of digital assets with, or the exchange of digital assets for fiat currency, the Exodus interface connects the user with our third-party API Providers to carry out the transaction. The user leaves the Exodus platform and is sent to the API Provider’s platform. To effectuate a transaction, a user must have an established account with the applicable API Provider, including completing the specific API Provider’s KYC process, see “Item 1. Business – KYC and KYB Programs – KYB Program For API Providers and Vendors.”

If the user is selling digital assets for fiat currency:

If the user is buying digital assets with fiat currency:

information, including the fees charged for its services, are determined by the API Provider and may be subject to change based on the contractual terms between the user and API Provider. As a general matter, the total price provided to and paid by the user will generally include an overview of the following individual amounts: (a) the digital asset to fiat currency exchange rate; (b) the amount of digital assets to be received upon purchase with the corresponding fiat currency; and (c) any applicable fees associated with the transaction, including any fees associated with the cost of transferring digital assets.

Staking—Staking allows users to “stake” supported digital assets held in their Exodus wallets by participating in blockchain validation through a third-party API Provider, Everstake. Everstake is a self-custodial staking platform, which means it is designed to allow users to maintain possession over their assets while staking and the terms of the staking products are only the terms immutable to the specific blockchain. Users can instruct Everstake to unstake most supported digital assets at any time. However, users can only access or withdraw staked digital assets once the unstaking period is complete. The unstaking period refers to the time period between the initial unstaking instruction and the point in time when digital assets become available to transfer or sell following an instruction to unstake. This varies depending on the specific blockchain. Customers may not be eligible to earn staking rewards during the unstaking period. For example, in accordance with the parameters of the Cosmos (ATOM) blockchain, users staking Cosmos (ATOM) are required to wait 21 days from the unstaking instruction date before they can access or withdraw their Cosmos (ATOM) coins. Staking for the following assets is available through Everstake: Ethereum, Solana, Tezos, Cardano, Aptos, Polygon, Cosmos, Kava, Injective, Axelar, and Osmosis. Exodus receives a monthly subscription fee from Everstake. In accordance with the parameters of both the Ontology and VeChain blockchains, staking occurs on-chain without any involvement from Exodus or Everstake, and as a result, we do not receive any fees when users stake their digital assets on the Ontology and VeChain blockchain. Users who hold Algorand must stake through the Algorand governance portal, and we do not receive any fees for any digital assets staked through the Algorand governance portal.

Auto restaking is a feature that allows users to pre-authorize staking of rewards earned on assets without manually claiming and restaking their rewards. Auto restaking on the Everstake platform is available for the following digital assets: Cosmos (ATOM), Kava (KAVA), Injective (INJ) and Osmosis (OSMO). Using ATOM as an example, if a user enables auto restaking, its earned ATOM rewards will automatically be staked when its wallet has at least 0.25 ATOM in unclaimed rewards without manually claiming and restaking its rewards. If a user has more than 0.25 ATOM in unclaimed rewards in its wallet, they will automatically be staked. Because this restaking is a pre-authorization of blockchain transactions in accordance with the staking protocols of the blockchain, the user will incur standard blockchain network fees, but there are no fees charged by Everstake or Exodus in connection with this pre-authorization. While auto restaking is active, users cannot manually claim rewards, but if users prefer to manage their ATOM rewards manually, they can disable auto restaking at any time. Auto restaking will expire after 1 year, at which point users will be prompted to enable it again.

According to the design of the underlying network staking protocols, the holder determines the amount of digital assets to stake, retains full control and ownership of the digital assets, and can request to unstake them as described above. Exodus does not have any contact with, control over, or ability to take control of any digital assets that a user stakes. In general, the risks to users who utilize the staking products offered on the Everstake platform are limited to the risks involved with cryptocurrency, and can depend on the specific blockchain. For example, the 21-calendar-day waiting requirement to unstake Cosmos can open users to risks in terms of penalties, or “slashing,” if the relevant activities are not performed correctly (e.g., if the staker, delegator, or baker acts maliciously on the network, “double signs” any transactions or experience extended downtimes) and market volatility (e.g., a user may lose money if the value of Cosmos drops while its Cosmos is staked or during the period following an unstaking instruction but prior to completion of the unstaking), which is an inherent risk to staking, including staking on the Cosmos blockchain.

When developing additional wallet capabilities, the Company conducts product-market, financial, and legal analysis of the proposed feature, including an assessment of the proposed feature’s compliance with the laws, rules, and regulations in the jurisdictions in which the Company operates. The Company then moves to assessing the technical feasibility of implementing the proposed feature into the Exodus Platform. The material cost of developing additional wallet capabilities is primarily labor expenses, and such expenses are funded by the Company’s operations. At this time, the Company has no plans to expand the breadth of asset classes supported within the Exodus Platform or otherwise develop additional wallet capabilities.

Elevate Technology—We are committed to investing in product development that enhances functionality of the Exodus Platform. Our regular software updates enable us to respond to user evaluations of our products on a rapid timetable. We believe that, over time, traditional financial assets, services and experiences will migrate to using blockchain technology and we are building for that eventuality. We also believe that people and entities will want the flexibility to keep their wealth as digital assets, particularly Bitcoin, Ethereum and Stablecoins, instead of only in fiat currencies. Exodus’ API Providers provide the connection with the exchanges, and because the Exchange Aggregator essentially eliminates the interim step of having to first convert the digital asset proposed for a transaction to Bitcoin (or other intermediate digital asset), the Exodus Platform is asset agnostic, meaning it can operate irrespective of the type of digital asset as opposed to asset or blockchain specific platforms that limit users to a particular asset or blockchain. In this sense, the Exchange Aggregator is asset agnostic, in an information technology context, because it connects with an API Provider exchange that is algorithmically selected to complete the desired swap function without requiring an intermediate digital asset. The Exchange Aggregator allows users to swap one digital asset for another without having to send digital assets to and from centralized exchanges or trade across multiple order books. For example, if a customer wants to swap ETH for Tether using one of Exodus’ API Providers, this trade can be easily executed – see “Item 1. Business – Our Products and Services – Exchange Aggregation.” This Exchange Aggregator process differs compared to a centralized exchange where a user may have to trade ETH for Bitcoin and then Bitcoin for Tether. The Company currently supports fungible cryptocurrency assets ledgered on public blockchains as well as non-fungible tokens ledgered on public blockchains.

Grow the Core—We are focused on growing the number of services provided on our platform by targeting the integration of diverse API Providers into the Exodus Platform. In addition, we also are working to grow the depth of API Providers who contribute similar services within the Exodus Platform. This is expected to provide several benefits including, but not limited to:

Diversify our products and services—The integration of third-party apps allows us to diversify our user base, expand our product offerings and maintain more than one source of revenue. Where permitted, each new app provides us with an opportunity to monetize our platform through commissions and fees paid by API Providers, including commissions for services performed by API Providers with persons located outside the United States, subscription fees for services performed by API Providers with persons located in the United States or other means. When determining whether to integrate an app into our platform, one of our top priorities is a consistent, high-quality user experience by maintaining the Exodus interface and the ease of use that our users expect from Exodus products. We believe that apps will be essential in bringing digital assets into mainstream use; exposing our user base to digital asset apps directly within their wallet will increase engagement and encourage users to continue using our products.

Historically, we have made minimal use of traditional marketing and advertising platforms, but instead have chosen to create high-quality content on our YouTube channel. This content highlights digital assets accessible on the Exodus Platform and is designed to give users access to dynamic content that anticipates their questions, feeds their curiosities, and gives them an honest assessment of these digital assets. Our effort to deliver the best user experience and support for digital assets has led to the majority of our user acquisitions coming from word-of-mouth.

We pioneered and continue to lead the market for self-custodial solutions for managing digital assets. We believe that we provide the most comprehensive self-custodial solution, offering mobile and desktop products, the option to connect to a hardware wallet, a significant range of supported digital assets, as well as functions such as our Exchange Aggregator and other apps. Since our founding, our competition has primarily been custodial solutions that offer a tangential self-custodial product, such as the exchanges supported by well-known companies like Coinbase. These exchanges tend to have greater name recognition and, as people are familiar with custodial products used in the traditional banking system, people may believe that the products they offer are more secure and are easier to use than stand-alone, self-custodial products.

We believe that due to security and technical risks associated with centralized or custodial services, digital asset holders will continue to move towards stand-alone self-custodial solutions. We also believe that the recent collapse of certain large custodial digital asset companies and the resultant suspension of withdrawals validates the benefits of self-custodial solutions.

Within the market for self-custodial wallet solutions, there are other companies that actively compete with us, offering various combinations of the features available on our platform. While leading exchanges, which have significant resources and brand power, have created self-custodial wallets, their focus continues to be on centralized digital asset products. However, our market is relatively new, and our competitors have adapted and may continue to adapt their platforms to incorporate many of our features and designs, as well as additional features or solutions.

Our current and potential competitors include a number of different types of companies, including:

We believe that the principle competitive factors in our market are:

We believe Exodus compares favorably with our competitors on the basis of these factors. Based on recent market data, we expect demand for self-custodial solutions to continue to rise and believe that we are well-positioned to take advantage of this market opportunity.

Our success depends in part upon our ability to protect and use our core technology and intellectual property rights. We rely on a combination of copyrights, trademarks, trade secrets, know-how, contractual provisions and confidentiality procedures to protect our intellectual property rights. We have registered “Exodus” as a trademark in the United States and other jurisdictions and we have filed other trademark applications to protect our logo in the United States and several international jurisdictions. We are also the registered holder of a variety of domestic and international domain names that include “Exodus”—including, most importantly, “exodus.com.”

In addition to the protection provided by our intellectual property rights, we enter into proprietary information and invention assignment agreements or similar agreements with our team members, consultants and contractors. We may also seek to patent our technology in the future.

We hold digital asset and stablecoin holdings for our own account. As of December 31, 2022, all of Exodus’ digital assets and stablecoin holdings held for its own account were held in self-custody. As of December 31, 2023, a significant portion of Exodus’ treasury consisted of digital assets and stablecoin holdings held for its own account. The following is a breakdown of our holdings as of December 31, 2023 (in units):

For those digital assets held on an exchange, we held such assets on both the Coinbase and Circle exchanges at year end 2023 and routinely held assets on the Kraken exchange. As a result, if these assets are lost or stolen, we may suffer a loss with respect to our digital asset holdings, and we may not be able to recover any of our carried value in these digital asset holdings. See “Item 1A. Risk Factors – Risks Related to Our Business – Our holdings of digital assets expose us to exchange, security, valuation and liquidity risks, which could negatively affect us.” Our future earnings and cash flows will be impacted if we choose to monetize our digital assets and the variability of our earnings on these transactions will be dependent on the future fair value of such digital assets.

There are two recognized categories of wallets: hot wallets and cold wallets. Hot wallets are connected to the internet in some way and typically reside on a website, desktop or inside a mobile phone, with the holder’s private keys stored digitally. Cold wallets are physical devices, not connected to the internet, that store the holder’s private keys. Generally, digital assets stored in hot wallets are more easily accessible; however, access to the internet means that the user must maintain effective internet security practices to protect their wallet. On the other hand, the downside to using cold wallets is that they are not as easily accessible and are typically used only for long-term storage of digital assets. As of March 31, 2024, we held approximately 15% of wallets and their associated keys in cold wallets. We do not have a policy regarding the percentage of private keys we hold in cold wallets, but we evaluate the location of our digital asset holdings on a case-by-case basis based on expected time to liquidity, the type of digital asset and custodial and non-custodial options available and the security options surrounding each.

For those assets held self-custodially, Exodus maintains a number of security measures to manage and protect private keys, including, but not limited to, the use of cold wallets, multi-signature protocols, access limited to select senior executives and finance personnel, and various physical safeguards such as geographic dispersion throughout North America of private keys. Exodus does not maintain insurance that covers its digital assets, whether held on Exchange or held self-custodially, in the case of loss or fraud. See “Item 1A. Risk Factors – Risks Related to Our Business – If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any digital assets, it could cause regulatory scrutiny, reputational harm and other losses.”

Exodus receives its revenues primarily in Bitcoin and USDC but accepts a wide range of digital assets and USD. Network fees and other expenses, such as gas fees, related to the transfer of the digital assets from the API to the self-custody wallets are typically paid by the sender. Exodus values digital assets at the time of receipt. Exodus generally targets a 50/50 split between the value of its digital assets and fiat-based holdings. We assess our holdings on at least a quarterly basis. Due to fluctuations in digital asset prices, our heavy use of Bitcoin in our receivables as well as for payment of certain operating expenses such as salaries, and corporate income tax considerations, we do not rebalance our holdings on a regular basis. As of December 31, 2023, we had a 40/60% split between liquid assets and digital asset holdings, respectively. As of March 31, 2024, we had a 32/68% split between liquid assets and digital asset holdings, respectively. We assess our holdings, including our splits between liquid assets and digital assets, on at least a quarterly basis and from time to time rebalance based on market conditions and our business, financial condition, results of operations and cash flows.

The table below shows the fair value of our holdings as of March 31, 2024 and December 31, 2023 (in thousands):

Digital assets received as payment, other than Bitcoin, Ethereum, Algorand, and Solana, are sold at or within a few days of receipt. Digital assets sold for fiat are primarily sold using standard business accounts we maintain on the Coinbase and Kraken exchanges, with the exception of USDC, which is sold using a standard business account with Circle. We consider the terms of our contracts with Kraken, Coinbase, and Circle to be in accordance with customary industry practice and accepted forms of such contracts, including with respect to the segregation of our assets from other customers’ assets.

As of December 31, 2023, we had approximately 195 full-time equivalents (“FTEs” or “team members”). FTEs includes U.S.-based employees, U.S. expatriate employees and non-U.S. independent contractors who perform

services for the company. Of our FTEs, approximately 130 are located outside the United States in approximately 50 countries located on six different continents. As of December 31, 2023, other than the United States, Exodus had no more than 10% of its team members in any one jurisdiction. All FTEs, including non-U.S. independent contractors, are paid exclusively in Bitcoin.

References to “employees” refer to U.S.-based employees and U.S. expatriate employees and excludes non-U.S. independent contractors. The basis for compensation for employees and for non-U.S. independent contractors is U.S. dollars and is settled in Bitcoin at the time of payment. In connection with the compensation of our employees, we make two payments: (1) we reimburse TriNet, a professional employer organization with which we have entered into a co-employment relationship, in U.S. dollars for employee expenses associated with payroll and benefits administration and pay TriNet an administrative fee in U.S. dollars for its services; and (2) for our employees, we deposit Bitcoin into the employee’s cryptocurrency wallet address (as described below).

We utilize the services of TriNet pursuant to which TriNet enters into a co-employment relationship with us. Our agreement with TriNet establishes that TriNet will be the employer of record for certain employment-related purposes, such as payroll, benefits administration, and compliance. Given this, TriNet has responsibility related to human resources administration, payroll processing, including tax reporting and remittance, benefits management, and regulatory compliance. TriNet offers access to employee benefits such as health insurance, retirement plans, and other perks and manages enrollment, administration, and compliance related to these benefits. TriNet also processes unemployment, workers’ compensation and employment practices liability insurance claims. This co-employment structure allows us to focus on our core business activities without having to manage these human resources functions internally. While TriNet becomes the employer of record for administrative purposes, we retain control over day-to-day employee management, including hiring, firing, and job responsibilities. Our agreement with TriNet is not a joint employment relationship and, as a result, we believe there is no material risk of losing our employees to TriNet in the event our agreement with TriNet is terminated.

Administrative fees to TriNet are paid on a monthly basis per employee, with a minimum total monthly service fee of $750. We pay these fees to TriNet in U.S. dollars. Each Exodus employee has acknowledged TriNet’s terms and conditions and has provided TriNet with proper Form I-9 documentation to verify their identity and employment authorization. The TriNet agreement does not include human resources administration or any other services for non-U.S. independent contractors. As detailed in the agreement, special fees may be incurred for optional expedited services. Our agreement with TriNet renews automatically every year for consecutive 12-month periods, unless terminated pursuant to written notice of the parties and other customary termination provisions.

We consider the terms of our contract with TriNet to be reasonable and customary and believe this arrangement provides substantial benefit to us in the form of lower costs for employee benefits and a reduced administrative burden on us. Exodus retains the responsibility for hiring, terminating, and managing our employees and operations. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have not experienced any work stoppages and we consider our relations with our team members to be good.

We contract with Gilded Inc. (“Gilded”) to help administer our bulk cryptocurrency payments system, including bulk payments such as payroll. Gilded helps us avoid manually processing hundreds of individual cryptocurrency payments and lowers network fees. Gilded has a mass pay feature that allows its customers to pay up to 500 recipients at a time in a single transaction utilizing the “one to many” concept to execute transactions, similar to airdrops in the crypto-sphere. Our cryptocurrency payment system works similarly to traditional payment systems but involves the use of Bitcoin as the payment medium. Employees provide Exodus with their cryptocurrency wallet addresses for payroll deposit. For each pay period, we use Gilded’s platform to upload both (i) employee net wages in U.S. dollars and (ii) amounts owed to non-U.S. independent contractors in U.S. dollars. Gilded uses this information to calculate the exact amount of Bitcoin to be paid to each employee and to each non-U.S. independent contractor based on the CryptoCompare Bitcoin/U.S. Dollar spot rate at the time we upload information to the Gilded platform. CryptoCompare is a global cryptocurrency market data provider that provides real-time market and pricing data on digital assets. The spot rate refers to the price for a transaction that is happening at the time we upload information to the Gilded platform, and Gilded uses the CryptoCompare Bitcoin/U.S. Dollar spot rate at the time we upload information to the Gilded platform. Once we receive these calculations from Gilded, Exodus then pays each

employee and non-U.S. independent contractor the Bitcoin amount from its non-custodial, multi-signature wallet into the employee’s or non-U.S. independent contractor’s wallet. Gilded has no involvement in the actual flow of Bitcoin from Exodus to the employee or the non-U.S. independent contractor. This entire process, including depositing the Bitcoin in the employee’s or non-U.S. independent contractor’s wallet, typically occurs in under an hour. We pay the network fees related to these outgoing payments in Bitcoin.

In recent years, there have been well-known digital asset market participants who have declared bankruptcy including Celsius Network, Voyager Digital Ltd., Three Arrows Capital and FTX. In response to these events, the digital asset markets, more specifically Bitcoin, have experienced extreme price volatility, resulting in a loss of confidence in participants of the digital asset ecosystem. These events have also negatively impacted the liquidity of the digital asset markets as certain entities affiliated with FTX formerly engaged in significant trading activity. The FTX app was available on the Exodus Platform until it was removed in November 2022. In addition, as of December 31, 2023, Clifton Bay Investments LLC, formerly known as Alameda Research Ventures LLC, which filed for bankruptcy in November 2022, owned 42.2% of our Class A common stock. Continued price volatility, negative publicity, the lack of standardized regulation and the closure or temporary shutdown of digital asset exchanges due to business failure, hackers or malware, government investigations or fraud may further reduce confidence in digital asset exchange networks and result in a negative impact on our business. It is not possible to predict at this time all of the risks these events may pose to Exodus, our service providers, our API Providers or on the digital asset industry as a whole.

We have not experienced an inability to recover material assets due to these bankruptcies, nor do we currently use digital assets as collateral for any loan, margin, rehypothecation, or other similar activities to which we are a party. However, even if there is no direct material impact on our business due to bankruptcies, we have been and may continue to be indirectly affected by these events.

To our knowledge, none of our current API Providers have filed for bankruptcy, been decreed insolvent or bankrupt, made any assignment for the benefit of creditors, been appointed a receiver, experienced excessive redemptions, suspended redemptions or withdrawals of digital assets, had digital assets of their users unaccounted for or experienced material corporate compliance failures. However, because Exodus offers a self-custodial wallet solution pursuant to which users possess their digital assets at all times, our users’ exposure to an API Provider experiencing insolvency or bankruptcy would be limited to the brief period of time during which wallet users are engaged in an active crypto-asset transaction. In the unlikely scenario that an API Provider would experience insolvency or bankruptcy during the brief period of time in which a user’s assets are exposed to the API Provider’s trading platform, if the transaction is not completed, it is possible that such digital assets may be considered the property of a bankruptcy estate and subject to bankruptcy proceedings. Such users could be treated as the API Provider’s general unsecured creditors. For example, in connection with digital asset swap transactions, to the extent that an API Provider experiences insolvency or bankruptcy a user may be exposed to an API Provider experiencing insolvency or bankruptcy when wallet users are engaged in an active crypto-asset transaction on an API Provider’s platform. If the transaction is completed, the users’ assets would be returned to the users’ self-hosted wallets on the Exodus Platform. As another example, if a staking API Provider like Everstake were to experience insolvency or bankruptcy, the impact on a user’s staked digital assets would depend on the type of digital asset and the staking protocol of the particular blockchain. A user can typically request to unstake digital assets at any time, and in the event of the API Provider’s insolvency or bankruptcy, a user would stop receiving rewards for that period, but its underlying digital assets would be preserved. In this scenario, a user would need to initiate the unstaking process according to the particular blockchain protocol’s requirements (e.g., a 28-day waiting period for ATOM). Following completion of the unstaking request, a user may elect to stake its digital assets with another API Provider and any rewards already earned and stored in a user’s wallet would remain unaffected.

Our operations expose us to a number of federal, state, local and international laws and regulations, including, but not limited to, tax, securities, consumer rights, privacy, data protection, cybersecurity and employment matters. These laws and regulations may have a material impact on our business, address multiple aspects of our operations and may be dependent on the jurisdiction of operation. While the Company offers the Exodus Platform in all jurisdictions not prohibited by U.S. or international law, the jurisdictions material to our business for the year ended December 31, 2023 based on (i) the total dollar value of user transactions with our API Providers for the year ended December 31, 2023 were the United States, Great Britain, Canada and Germany and (ii) revenue from our API Providers were the

Republic of the Marshall Islands, Hong Kong, the British Virgin Islands and the Seychelles, see “Note 3—Revenue Recognition” to our consolidated financial statements included in this Report.

The laws and regulations governing our core business as an un-hosted self-custody wallet provider are currently undeveloped, including the laws and regulations in the jurisdictions material to our business. However, as digital assets, blockchain technologies and digital asset exchanges continue to expand in popularity and market size, laws and regulations governing self-custody wallet providers like Exodus may also develop. The laws and regulations (and interpretations thereof) pertaining to digital assets, blockchain technologies and digital exchanges are rapidly evolving and increasing in scope. Changes in government regulation of our business has the potential to materially alter our business practices and our profitability. Depending on the jurisdiction, those changes may come about through the issuance of new laws and regulations or in the application of existing laws and regulations by a court, regulatory body or governmental official. For example, in jurisdictions outside of the United States, the international rules, regulations and laws that may have an impact on our business primarily relate to privacy, data protection and cybersecurity, such as the European General Data Protection Regulation of April 27, 2016 (Regulation (EU) 2016/679) (the “GDPR”) and the GDPR as incorporated into Unted Kingdom law pursuant the European Union (Withdrawal) Act 2018 (the “U.K. GDPR”). Sometimes those changes may have both a retroactive and prospective effect. This is particularly true when a change is made through the application of existing laws or regulations to new fact patterns. For instance, earlier this year, as part of our internal compliance process through which we monitor and assess changes in regulations to which we may be subject, we became aware that the United Kingdom Financial Conduct Authority (“FCA”) published new rules relating to how digital assets can be marketed to consumers. Specifically, companies seeking to promote digital assets in the U.K. to retail consumers are required to register with the FCA or have any marketing approved by an authorized company. However, the Company cannot register with the FCA because it operates a self-custodial wallet, and the rules are focused on asset custodians. Therefore, in anticipation of these rules taking effect on October 8, 2023, the Company took steps before the deadline to comply with the new FCA rules by modifying its marketing materials to avoid a determination by the FCA that it was promoting digital assets.

Even with the steps taken by the Company, and although at the time the Company believed it was in compliance with such rules, the FCA utilized the broad nature of the new rules to state that the Company is not in compliance with the rules and placed the Company on its Warning List in November 2023. In April 2024, following months of constructive dialogue with the FCA, the FCA removed the Company from its Warning List. Had the Company failed to reach an agreement with the FCA to be removed from the Warning List, it may have had a negative effect on the Company’s financial performance and operations, and in the future, we could have been subject to a variety of civil, criminal, and administrative fines, penalties, orders and actions as a result of our business activities.

Moreover, changes in regulation that may seem neutral on the surface may have either more or less impact on us than our competitors, depending on the circumstances. As another example, we are subject to export control, import and sanctions laws and regulations, and we have policies and processes in place in connection with such laws and regulations. For example, under U.S. export control and sanctions laws and regulations, including the U.S. Department of Commerce’s Export Administration Regulations (“EAR”) and various economic and trade sanctions administered by the USDT Office of Foreign Assets Control (“OFAC”), our business activities are subject to various restrictions related to the sale or supply of certain products and services to U.S. embargoed or sanctioned countries, governments, persons and entities and require authorization for the export of certain encryption items. The Company has processes in place regarding geo-blocking technology to block the Exodus Platform’s availability in jurisdictions subject to U.S. comprehensive sanctions, namely the Crimea region and so-called Donetsk People’s Republic and Luhansk People’s Republic in Ukraine, Cuba, Iran, North Korea, and Syria. The Company also uses geo-blocking technology to block the availability of API integrations for third-party crypto-to-crypto exchange services in the states of New York and Washington. In addition, the Company maintains a blacklist that prevents transactions between third-party APIs and sanctioned cryptocurrency wallet addresses. The Company has implemented an automated OFAC sanctions list search in its customer support system, which operates in instances where wallet holders have provided their names.

In order to ensure compliance with regimes that are applicable, or may become applicable to us, we monitor these areas closely and invest significant resources in our legal, compliance, product, and engineering teams to ensure our

business practices evolve to help us comply with the current laws, regulations, and legal standards to which we are subject, as well as to plan and prepare for changes in interpretations thereof, as well as additional laws, regulations, and legal standards that are introduced in the future. For example, our internal legal and compliance team has expanded substantially over the past two years.

In recent years, the SEC and U.S. state securities regulators have stated that certain digital assets or digital asset products may be classified as securities under U.S. federal and state securities laws. Due to the fact-intensive nature of the “security” analysis under the applicable legal standard, there is a lack of certainty as to whether a particular digital asset, product, or service will be deemed to be a security by the SEC or by U.S. federal or state courts. A number of enforcement actions and civil suits have been brought against developers, sponsors, and issuers of digital assets and digital asset products, as well as against trading platforms that support digital assets, in which the SEC has taken the position that certain digital assets are securities, including some that are supported by the Exodus Platform. These include, but are not limited to, Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA) and Axie Infinity (AXS). Several foreign governments have also issued similar warnings cautioning that certain digital assets, including certain digital assets supported by the Exodus Platform, may be deemed to be securities under the laws of their respective jurisdictions. While we do not engage in trading of digital assets for the account of others on our platform or otherwise engage in the business of effecting transactions in securities for the account of others, we receive compensation from the API Providers that have connected to our Exchange Aggregator. For services offered by API Providers to persons located in the United States, we charge fees to API Providers utilizing a volume-based, tiered monthly subscription structure payable to us in arrears once a month. For services offered by API Providers to persons located outside the United States, we generally utilize a transaction-based structure to charge API Providers a percentage of the underlying value of the digital asset transaction. We expect to continue our subscription-based model for services offered by API Providers to persons located in the United States. See “Item 1A. Risk Factors – Risks Related to Regulation – Regardless of the revenue structure for our Exchange Aggregator, we could be deemed a broker-dealer because certain digital assets on the Exodus Platform may currently be deemed to be securities, and we would likely experience difficulty in complying with the broker-dealer financial responsibility rules.”

We have policies and processes in place to determine whether the services that users can obtain from our API Providers related to the supported digital assets held in users’ Exodus wallets are securities under U.S. federal securities law. Our policies and procedures do not constitute a legal standard but rather enable the company to make a risk-based assessment regarding the likelihood that a particular service could be deemed a “security” under applicable laws. These policies generally outline the notification and approval requirements involving the Company’s General Counsel and/or Chief Compliance Officer in connection with: (1) any new API Provider engagement related to services offered by the API Provider to Exodus’ users; (2) the approval of any material change to the terms and framework of any services provided by the Company’s API Providers to Exodus’ users; and (3) discrepancies identified between established Company practice and the nature or manner in which any API Provider service is provided. The actions taken may include engaging external counsel to review and analyze whether such services could be deemed a “security.” In addition, in our API Provider contracts, we require that API Providers represent that they are in compliance with all U.S. laws, which would include U.S. federal securities laws. While we do not have policies or processes in place to determine whether the supported digital assets held in users’ Exodus wallets are securities under U.S. federal securities law, our policies and procedures for API Providers providing services to persons located in the United States are designed to provide for a legal and compliance infrastructure that treats such digital assets as securities under U.S. federal securities law, see “Item 1. Business – Our Products and Services – Services Offered and Performed By Our API Providers” and “Item 1A. Risk Factors – Risks Related to Regulation – Certain digital assets traded using third-party services integrated within our platform or other programs could be viewed as “securities” for purposes of federal or state regulations and could subject us to regulatory scrutiny, inquiries, investigations, fines and other penalties.”

The Bank Secrecy Act (BSA) and the implementing regulations issued by the Financial Crimes Enforcement Network (FinCEN) impose anti-money laundering obligations on financial institutions, including money transmitters. Neither the BSA nor the FinCEN implementing regulations offer any clarity as to whether companies that provide unhosted cryptocurrency wallets should be characterized as money transmitters. In its May 2019 guidance (the “FinCEN

Guidance”), however, FinCEN said generally, that an unhosted cryptocurrency wallet is software hosted on a person’s device that allows the person to store and conduct transactions in cryptocurrency and that unhosted wallets are not included within the definition of money transmitter.

Exodus is an unhosted wallet as described in the FinCEN Guidance and does not engage in transfers of funds on behalf of users. Accordingly, Exodus does not have an obligation to perform, nor to engage a third-party to perform, KYC or AML procedures on its users in connection with opening an unhosted wallet on the Exodus platform. See “Item 1A. Risk Factors – Risks Related to Our Business – Our platform or our API Providers’ platforms may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams, which could adversely affect our business.”

Our referral program allows users to recommend Exodus to others. We distribute referral program rewards in the form of USDC from our own account to a user’s Exodus wallet. Before we send USDC to users, Securitize LLC (“Securitize”) conducts a Know Your Customer (“KYC”) review on the user in accordance with its KYC policies and procedures. As part of this KYC review, users must complete identity verification and respond to other informational requests from Securitize. Once Securitize completes it KYC process, a user’s Securitize account is verified and users may then begin to receive any USDC referral rewards. Securitize continues to perform ongoing monitoring of account and transaction activity involving the user’s Securitize account even after a user’s account is verified in an effort to ensure that potentially suspicious activity is appropriately detected, and when appropriate, reported. Any referral rewards will automatically be sent to the user’s Exodus wallet once per month so long as the user maintains an active Securitize account. Securitize’s policies and procedures may result in a user’s Securitize account being suspended if, for example, the user’s Securitize account is flagged for suspicious activity. If a user does not have an active Securitize account, e.g., because its Securitize account is suspended, Exodus will not send referral rewards to that user.

From time to time, to help maintain our brand and reputation, we distribute gifts cards and USDC to users if an issue arises with the Exodus Platform. Prior to receiving any gift cards or USDC in connection with this brand reputation program, our legal and compliance team conducts an OFAC screening to check entities and persons against the denied party lists maintained by the United States Treasury Department’s Office of Foreign Assets Control (OFAC).

The Company conducts Know Your Business (“KYB”) diligence with respect to vendors we use and our API Providers. Before entering into any new transaction, agreement, or other business relationship with an API Provider or vendor, and on an ongoing basis during the Company’s relationship with such API provider or vendor, we use in-house and third-party service providers to perform a KYB analysis on the ultimate beneficial owner of the relevant entity. The procedures for this analysis include, but are not limited to, screening the actual prospective party to the agreement and also any individuals or entities beneficially owning more than 25% of the prospective party (and, if appropriate, such party’s crypto-asset network addresses), against various sanctions lists. In addition to initial and ongoing sanctions screenings, the Company performs ongoing adverse media screenings on our vendors and API Providers. These screenings locate negative news, including, but not limited to reports of financial crime, human trafficking, drug trafficking, terrorist financing, fraud, bribery, corruption, and any other adverse media that could subject us to regulatory or reputational risk. Our internal KYB policy also outlines various procedures for documenting, reporting and responding to potential violations of applicable sanctions rules, along with procedures for assessing business relationships with API Providers or vendors that have been the subject of sanctions violations.

Pursuant to the Company’s agreements with our API Providers, the API Providers represent to the Company that they have AML, KYC and other procedures reasonably designed to prevent their platform from being used to facilitate money laundering, terrorist financing, and other illicit activities, or to do business in countries or with persons and entities included on designated country or person lists promulgated by the U.S. Department of the Treasury’s Office of Foreign Assets Controls and equivalent authorities in other countries. The Company relies on the representations, warranties, covenants, and agreements of the API Providers contained in the API agreements (forms of which are attached to this Amended Registration Statement) and, other than the KYB diligence conducted on our API Providers and absent any perceived or known issue that may warrant an independent verification, the Company does not independently investigate or verify the assertions and representations made by the API Providers, including regarding the API Providers representations as to its AML, KYC and other procedures.

For the sale or acquisition of digital assets for our own account, such transactions would occur on the Coinbase, Kraken, or Circle exchanges where we hold digital assets for our own account. For Coinbase, Kraken, and Circle, we comply with the customer KYC, onboarding and periodic review processes for corporate customers.

We also receive digital assets as payment. Digital assets received as payment, other than Bitcoin, Ethereum, and Solana, are sold at or within a few days of receipt. Digital assets sold for fiat are primarily sold using standard business accounts we maintain on the Coinbase and Kraken exchanges with the exception of USDC which is sold using a standard business account with Circle. We consider the terms of our contracts with Kraken, Coinbase, and Circle to be in accordance with customary industry practice and accepted forms of such contracts, including with respect to the segregation of our assets from other customers assets and the policies and procedures such exchanges have in place regarding AML, KYC and other procedures.

Regarding the distribution of digital assets from our own account, we use Bitcoin and other digital assets for payment of certain operating expenses such as salaries or payments to third-party vendors. Prior to receiving Bitcoin for payment, third-party vendors have completed the KYB diligence process. From time to time, to help maintain our brand and reputation, we also may distribute digital assets to users if an issue arises with the Exodus Platform.

The complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the digital asset economy requires us to exercise our judgment as to whether certain laws, rules and regulations apply to us, and it is possible that regulators may disagree with our conclusions. We generally believe that our business, as discussed in this Report, is compliant with these regulations, but in certain cases, there may be uncertainty related to that conclusion. For additional discussion, see “Item 1A. Risk Factors – Risks Related to Regulation,” which we incorporate by reference here.

We are subject to the informational requirements of the Exchange Act, and accordingly, file current and periodic reports, proxy statements and other information with the SEC. With respect to disclosures filed or furnished to the SEC, you may obtain copies of our prior and future reports free of charge from the SEC’s website, at www.sec.gov. Our principal internet website address is www.exodus.com.

Investing in or maintaining your investment in our common stock involves risk. You should carefully consider each of the risks and uncertainties set forth below as well as the other information contained in this Report before deciding to invest in our securities. We have grouped our Risk Factors under captions that we believe describe various categories of potential risk. For the reader’s convenience, we have not duplicated risk factors that could be included in more than one category. Any of the following risks and uncertainties could materially and adversely affect our business, financial condition, results of operations, liquidity and/or cash flows and the impact could be compounded if multiple risks were to occur.

The success of our business depends on our ability to attract and retain Exodus Platform users. To do so, we must demonstrate to potential and existing users that our platform offers significant advantages over those of our competitors. Market acceptance of the Exodus Platform is affected by a number of factors, many of which are beyond our control, including the timing of the release into the market of new products, features and functionality introduced by our competitors, the performance of third-party services offered through the Exodus Platform, user perceptions of the Exodus Platform’s security and reliability, acceptance and interest in digital assets and the growth or contraction of the market in which we compete.

As the market for digital assets and related services continues to mature, we expect that an increased focus on user satisfaction will profoundly impact demand for the Exodus Platform. We believe that our users are increasingly looking for flexible and secure digital asset wallets that seamlessly integrate a range of applications and support a wide variety of digital assets, while streamlining the user experience and minimizing complexity. If we are unable to meet this demand, or if the Exodus Platform otherwise fails to achieve widespread market acceptance, our business, results of operations, financial condition and growth prospects may be adversely affected.

We believe that maintaining our reputation as a leading provider of a self-custodial digital asset wallet with superior user support is critical to our relationship with our existing users and our ability to attract new users. The successful promotion of our brand will depend on several factors, including our ability to maintain a record of security, performance and reliability; our ability to continue to develop and integrate high-quality products and features for our platform through API agreements; and our ability to successfully differentiate our platform from competitive products and services. Independent industry and financial analysts often provide reviews of our platform, as well as those of our competitors. Perception of our offerings in the marketplace may be significantly influenced by these expert reviews. If reviews of our platform are negative or less positive than those of our competitors our brand may be adversely affected. The performance and reputation of our third-party API Providers may also affect our brand and reputation, particularly if users do not have a positive experience with our API Providers.

Further promotion of our brand may require us to make increased expenditures and we anticipate that the expenditures will increase as our market becomes more competitive. Expenditures intended to maintain and enhance our brand may not be cost-effective or effective at all. If we do not successfully maintain and enhance our brand, we may experience reduced pricing power relative to our competitors, a decrease in existing users, failure to attract new users or an inability to expand offerings of new products to our existing users, all of which could materially and adversely affect our business, results of operations and financial condition.

The success of third-party services on the Exodus Platform is affected by a number of factors, many of which are beyond our control, such as our ability to successfully integrate services into the Exodus Platform using third-party APIs, technological changes and developments, user preferences and technical support provided by the third party. Interruptions or delays in our cloud or internal infrastructure or third-party services and cybersecurity incidents such as attacks on our information systems by malicious actors could also affect our third-party services.

There can be no assurance that these third-party services will continue to perform in a manner our users find adequate. In addition, if any of the agreements with our API Providers are terminated or suspended, whether due to a failure or breach of performance or otherwise, we could be forced to incur additional expenses in seeking replacements, may not be able to obtain replacements in a timely fashion, if at all, and such interruptions or discontinuations of service could interfere with our existing user relationships and make us less attractive to potential new users. Multiple terminations or suspensions in a short period of time could impair the functionality of the Exchange Aggregator, resulting in user dissatisfaction and revenue loss. Additionally, certain of our third-party API Providers deliver features and functionalities that, if no longer available to us, cannot be replaced easily or in a timely fashion, if at all. Users may attribute such interruptions or delays to the operations of our platform, leading to doubts about the efficiency or reliability of the Exodus Platform which could have an adverse effect on our reputation and financial condition.

Employee or service provider misconduct or error could subject us to legal liability, financial losses, and regulatory sanctions and could seriously harm our reputation and negatively affect our business. Such misconduct could include engaging in improper or unauthorized transactions or activities, insider trading and misappropriation of information, failing to supervise other employees or service providers, improperly using confidential information, as well as improper trading activity such as spoofing, layering, wash trading, manipulation and front-running. Additionally, our API Providers may misappropriate customer funds or digital assets. API Provider errors, include mistakes in executing, recording, or processing transactions for users. Although we have implemented processes and procedures and provide trainings to our employees to reduce the likelihood of misconduct and error and require our API

Providers to make representations to us to their processes and procedures regarding the same, these efforts may not be successful. It is not always possible to deter misconduct, and the precautions we and our API Providers take to prevent and detect this activity may not be effective in all cases.

If we were found to have not met our compliance and other obligations, we could be subject to regulatory sanctions, financial penalties, restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity and seriously damage our reputation. Our employees, contractors and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or result in financial liability. Further, allegations by regulatory or criminal authorities of improper trading activities could affect our brand and reputation. If our API Providers were found to have not met their regulatory oversight and compliance and other obligations or if our API Providers experience bankruptcy or insolvency, we could receive negative publicity and damage to our reputation that could adversely impact our business.

Our information systems and data may be vulnerable to attacks from malicious third parties or breaches due to human error, malfeasance, or other cybersecurity incidents that could result in unauthorized access to our internal systems, networks and data. This may include computer malware, viruses, ransomware and other malicious software, computer hacking, fraudulent use, social engineering (including phishing attacks), data privacy breaches by employees, insiders or others with authorized access, and other attempts to gain unauthorized access to our information systems and data. Cybersecurity incidents have become more prevalent and have been initiated against us and our users in the past and may occur against us or our users in the future. Certain kinds of viruses or malware can corrupt basic functionalities of device operating systems to allow hackers to access or misdirect our users’ digital assets. Additionally, we may experience cybersecurity incidents, including cyber-attacks by third parties seeking unauthorized access to our users’ confidential data, which could disrupt our ability to provide services on the Exodus Platform or lead to exposure of user information. We also process, store and transmit our own data as part of our business and operations. This data may include personally identifiable, confidential or proprietary information or employee or vendor data. Additionally, we use certain third-party service providers to store and process data on our behalf, and they face a variety of security risks. Our security measures or those of our third-party service providers could fail or we could suffer data loss or unauthorized access to, or use of, our platform or the systems or networks used in our business, including unauthorized, accidental or unlawful access to, or disclosure, modification, misuse, loss or destruction of, our or our users’ data.

Private keys may also be compromised if users choose to store their private keys in non-secure systems, such as third-party email services, which may be susceptible to security breaches and other cybersecurity incidents, despite our efforts to discourage our users from engaging in these practices. Although such incidents are outside of our control and do not relate to any insecurity or vulnerability on the part of the Exodus Platform, users may nevertheless blame or become dissatisfied with the Exodus Platform as a result of these negative experiences.

Any of the foregoing cybersecurity incidents, or a market perception that the Exodus Platform is insecure, underperforming or unreliable, whether or not accurate, could result in a loss of existing or potential users or third-party relationships; harm to our financial condition and results of operations; delay or inability to attain market acceptance of our platform; expenditure of significant financial resources in efforts to analyze, correct, eliminate, remediate or work around errors or defects, to address and eliminate vulnerabilities and to address any applicable legal or contractual obligations relating to any actual or perceived security breach or other cybersecurity incident; negative publicity and damage to our reputation and brand; and legal claims and demands (including for stolen assets or information, repair of system damages and compensation to users), litigation, regulatory audits, proceedings or investigations, regulatory fines or penalties and other liabilities.

Any of the foregoing can be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident. We have incurred and expect to incur significant expenses in an effort to prevent security breaches and other cybersecurity incidents, including deploying additional personnel and protection technologies, training personnel and engaging third-party experts and consultants. Furthermore, because data security is a competitive factor in our industry, we make statements publicly, including in our privacy policies and terms of service, providing assurances about the security of our platform, including descriptions of our security measures. Should any of these statements be untrue or become untrue, even as a result of circumstances beyond our reasonable control, we may face

claims, investigations or other proceedings by U.S. federal and state regulators, as well as foreign regulators and private parties. The continuing and evolving threat of cyberattacks has also resulted in increased regulatory focus on prevention, and to the extent we face increased regulatory requirements, we may be required to expend significant additional resources to meet such requirements. In addition, our liability insurance might not be sufficient in type or amount to cover us against claims related to cybersecurity incidents or attacks.

Over the past several years, a number of digital asset trading platforms have been closed or faced issues due to fraud, failure, security breaches or governmental regulations. Particularly for operators outside of the United States, digital asset trading platforms are not regulated in ways similar to national securities exchanges and other highly regulated trading environments or, if subject to regulation in a relevant jurisdiction, may not be in compliance. As a result, capital requirements, clearing infrastructure and technical and operational security requirements may vary. The nature of the digital assets held at trading platforms makes them appealing targets for hackers and a number of digital asset trading platforms have been victims of cybercrimes. It is possible that the customers of such digital asset trading platforms may not be compensated or made whole for the partial or complete losses of their account balances in such trading platforms.

Negative perception, a lack of stability in the digital asset trading markets and the closure or temporary shutdown of digital asset trading platforms due to fraud, business failure, hackers or malware, or government regulation may reduce confidence in the digital asset trading platforms and result in greater volatility in the prices of digital assets.

Crypto asset platforms are relatively new, and many are unlicensed, may be subject to regulation in a relevant jurisdiction but may not be in compliance, are unregulated, or may operate without supervision by any governmental authorities, and do not provide the public with significant information regarding their management team, corporate practices, cybersecurity, and regulatory compliance. To the extent that unanticipated operational or trading problems or other failures, such as security or technical failures, arise on trading platforms, customers and the general public may lose confidence or interest in crypto asset platforms, which could have an adverse impact on our business and our customers’ perception of us, including decreased use of our platform and loss of customer demand for our products and services.

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

Digital asset exchanges may be susceptible to wash trading. Wash trading occurs when offsetting trades are entered into for other than bona fide reasons, such as the desire to inflate reported trading volumes. Wash trading may be motivated by non-economic reasons, such as a desire for increased visibility on popular websites that monitor markets for digital assets so as to improve their attractiveness to investors who look for maximum liquidity, or it may be motivated by the ability to attract listing fees from token issuers who seek the most liquid and high-volume exchanges on which to list their digital assets. Results of wash trading may include unexpected obstacles to trade and erroneous investment decisions based on false information. In the United States, there have been allegations of wash trading even on regulated venues. Any actual or perceived false trading in the digital asset exchange market, and any

other fraudulent or manipulative acts and practices, could adversely affect the value of digital assets and/or negatively affect the market perception of digital assets. To the extent that wash trading either occurs or appears to occur in digital asset exchanges, investors may develop negative perceptions about the digital assets industry more broadly, which could adversely impact the price of digital assets.

Public and private digital asset “keys,” comprising an alphanumeric code, enable users to manage their digital assets on the blockchain. Our users are able to send digital assets by inputting a public blockchain address and an amount to transfer, and are able to receive digital assets by providing the sending party with the users’ own public blockchain address. Our involvement in these transfers is generally limited to providing a visual interface to access the blockchain. We do not take possession of the user’s assets and have no access to the user’s public or private keys.

A number of errors can occur in the process of a user depositing or withdrawing digital assets into or from their Exodus wallets, such as typos, mistakes, or the failure to include the information required by the respective blockchain network. For instance, a user may incorrectly enter the desired recipient’s public key when withdrawing from our platforms, or transfer digital assets to a wallet address that the user does not own, control or hold the private keys to. In addition, each wallet address is only compatible with the underlying blockchain network on which it is created. For example, a Ethereum wallet address can only be used to send and receive Ethereum. If any Bitcoin or other digital assets are sent to a Ethereum wallet address, or if any of the foregoing errors occur, all of the user’s sent digital assets will be permanently and irretrievably lost with no means of recovery, including by us. In these scenarios, users may blame or become dissatisfied with the Exodus Platform as a result of these negative experiences, which could adversely affect our business.

We do not have insurance for any losses of assets in our users’ wallets. As a result, if private keys are compromised, including due to a cybersecurity incident or to the extent that any of the private keys relating to our users’ wallets are lost, destroyed or otherwise compromised or unavailable, and no backup of the private key is accessible, we will be unable to access the digital assets held in the related wallet. In these scenarios, users may blame or become dissatisfied with the Exodus Platform as a result of these negative experiences, which could adversely affect our ability to access or sell our digital services and subject us to regulatory scrutiny, reputational harm and significant financial losses.

Digital assets are controllable only by the possessor of the unique private key relating to the wallet in which the digital assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded in order to prevent a third party from accessing the digital assets held in such a wallet. To the extent that any of the private keys relating to our hot wallet or cold wallet containing digital assets held for our own account are lost, destroyed or otherwise compromised or unavailable, and no backup of the private key is accessible, we will be unable to access the digital assets held in the related wallet which could adversely affect our ability to access or sell our digital assets and subject us to regulatory scrutiny, reputational harm and significant financial losses.

Aspects of the Exodus Platform and our applications include or utilize software released under the terms of open source licenses, including the MIT License, Internet Systems Consortium License, Apache License, Mozilla Public License and GNU Lesser General Public License. While we monitor our use of open source software (“OSS”), we could be subject to suits for noncompliance with open source licensing terms, infringement on a third party’s intellectual property rights or indemnification. Such inadvertent use could also require us to release our proprietary source code, pay damages, royalties, license fees or other amounts, seek new licenses from third parties, re-engineer our platform or applications, discontinue sales or distribution of software in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from the operation of our business, maintenance of our platform or our development efforts, any of which could adversely affect our business.

Our business requires us to enter into a large number of agreements with third-party providers and distribute the Exodus Platform in many different jurisdictions. Our agreements contain a variety of terms, including service levels, data privacy and security obligations, indemnification, dispute resolution procedures and regulatory requirements. Agreement terms may not be standardized across our business and can be subject to differing interpretations and local law requirements, which could result in disputes with our users and other third parties from time to time. If our users or other third parties notify us of a breach of contract or otherwise dispute the terms of our agreements, the dispute resolution process could be expensive and time consuming and result in the diversion of resources that could otherwise be deployed to grow our business. Even if these disputes are resolved in our favor, we may be unable to recoup the expenses and other diverted resources committed to resolving the dispute and, if we receive negative publicity in connection with the dispute, our reputation and brand may be harmed. Furthermore, the ultimate resolution of such disputes may be adverse to our interests and as a result could negatively affect our results of operations and financial condition.

The market in which our platform competes is intensely competitive and characterized by rapid changes in technology, user expectations, industry standards, frequent introductions of new products and improvements to existing products. We expect competition to increase as other established or emerging companies enter the markets for digital assets, particularly with respect to wallets, exchanges and applications designed to support digital assets.

In particular, some of our competitors may have substantially broader and more diverse product and services offerings, allowing them to leverage existing commercial relationships, incorporate functionality into existing products, sell products and services with which we compete at zero or negative margins, offer fee waivers and reductions or other economic and non-economic concessions, bundle products, maintain closed technology platforms or render our platform unable to interoperate with such products. If they were to engage in predatory practices, it could harm our existing platform offerings or prevent us from creating viable products in other segments of the markets in which we participate. If we are unable to anticipate or effectively react to these challenges, our competitive position could weaken, and we could experience a decline in revenue or our growth rate that could materially and adversely affect our business, financial condition and results of operations.

Because our platform is designed to operate on a variety of networks, applications, systems and devices, we will need to continually modify and enhance our platform to keep pace with technological advancements. There can be no assurance that updates to our platform will be released in a timely or cost-effective manner. In addition, they may contain errors or defects in operability within the Exodus Platform, which could make our platform become less marketable, less competitive or obsolete and our business, results of operations and financial condition may be adversely affected.

Our success depends on our ability to effectively manage the growth of our business. The Exodus Platform has experienced rapid organic growth since the market for digital assets began attracting widespread interest in 2017 and 2018. Our growth has placed, and is expected to continue to place, a strain on our management and our administrative, operational and financial infrastructure. Our success will depend in part on our ability to manage this growth effectively, which will require that we continue to improve our administrative, operational, financial and management systems and controls by, among other things: maintaining the integrity of our core business purpose, which is to design and provide the best user experience for digital assets; maintaining high levels of user support; ensuring the integrity and security of our platform and IT infrastructure; identifying and continuing to expand strategic relationships with third-party API Providers and executing agreements to integrate third-party software into the Exodus Platform; further improving our key business applications, processes and IT infrastructure; and enhancing our information and communication systems to ensure that our team members around the world are well coordinated and can effectively communicate with each other and our growing base of third-party API Providers and users.

Managing our growth will require significant capital expenditures and allocation of valuable management and employee resources. If we fail to manage our expected growth, the uninterrupted and secure operation of our platform and our compliance with the rules and regulations applicable to our operations, the quality of our platform and ability to compete could suffer. Any failure to preserve our culture also could further harm our ability to retain and recruit personnel, innovate and create new enhancements for our platform, operate effectively and execute on our business strategy.

While we may need to raise additional capital to expand our operations, pursue our growth strategies and respond to competitive pressures or working capital requirements, 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 affect our existing operations. The global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including diminished credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. Such macroeconomic conditions could also make it more difficult for us to incur additional debt or obtain equity financing. Further, the digital asset industry has been negatively impacted by recent events such as the bankruptcies of Core Scientific, Celsius Network, Voyager Digital Ltd., Three Arrows Capital and FTX. In response to these events, the digital asset markets, including the market for Bitcoin specifically, have experienced extreme price volatility and several other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital asset markets and in Bitcoin. In light of conditions impacting our industry, it may be more difficult for us to obtain equity or debt financing in the future.

If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests, and the per share value of our Class A common stock could decline. Furthermore, if we engage in additional debt financing, the holders of debt likely would have priority over the holders of our Class A common stock on order of payment preference. We may be required to accept terms that restrict our ability to incur additional indebtedness, take other actions including accepting terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests of our stockholders.

Our ability as an organization to successfully acquire technologies or businesses is unproven. However, we believe that our long-term growth depends, in part, on our ability to develop and monetize additional aspects of our platform, which we may pursue through acquisitions, investments in other companies, partnerships, alliances or other strategic transactions. We cannot assure you that we will be able to identify suitable transactions and, even if we are able to identify such transactions, that we will be able to consummate any such acquisitions on acceptable terms. Any future strategic transactions we pursue may involve a number of risks that could adversely affect our business, financial condition and operating results.

The market price of Bitcoin has historically been volatile and may affect our business by fluctuating the value of funds available to us which could materially and adversely affect our financial condition, results of operations and cash flows. Further, because we do not currently hedge our investment in Bitcoin, and do not intend to for the foreseeable future, we are directly exposed to Bitcoin’s price volatility and surrounding risks.

The market price of Bitcoin is impacted by a variety of factors and is determined primarily using data from various exchanges, over-the-counter markets and derivative platforms. As described above, the digital asset industry has been negatively impacted by market price volatility. Such prices may also be subject to factors that impact commodities which could subject us to additional influence from fraudulent or illegitimate actors, real or perceived scarcity and political, economic, regulatory or other conditions. Pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of Bitcoin, our Class A common stock price and manipulation of market prices for both Bitcoin and shares of our Class A common stock. Further, volatility in digital asset pricing could lead to other impacts such as increased risks of legal proceedings or governmental scrutiny of us and our affiliates, users, suppliers and partners either in the United States or in other jurisdictions. Continued volatility in the digital asset industry could adversely affect an investment in our Class A common stock.

Most of our expenses, like team member salaries, are denominated in U.S. dollars and paid using Bitcoin. At the time of payment, amounts are translated from U.S. dollar to Bitcoin based on the current Bitcoin rate (as determined by Gilded, see the section titled “Human Capital Management” in Part I, Item 1 of this Amended Registration Statement). The Bitcoin used for payments is primarily derived from revenue from ongoing operations received in Bitcoin. The company pays the transfer fees related to outgoing payments. We are subject to translational risk because we may be required to pay a larger amount of Bitcoin to satisfy these expenses if the dollar value of Bitcoin decreases. Certain of our other liabilities, expenses and costs must be paid in U.S. dollars, and we may be required to convert digital assets to U.S. dollars in order to satisfy those liabilities, expenses and costs. The U.S. dollar value of any given digital asset can fluctuate significantly and may be characterized by volatility. There can be no assurance that we will be able to exchange our digital assets for U.S. dollars on a timely basis, if at all, or for a fair price. If the value of our digital assets declines, or if we experience difficulties converting our digital assets to U.S. dollars, we may not have sufficient liquidity to satisfy our liabilities, expenses and costs as they become due, which may negatively affect our business operations and financial condition. For example, the price of Bitcoin was approximately $16,500 and $46,000 as of December 31, 2022, and December 31, 2021, respectively. To pay the same $100,000 of salary took approximately six Bitcoin on December 31, 2022, versus only 2.2 Bitcoin on December 31, 2021. Additionally, the other major asset in our treasury, Ethereum, decreased approximately 67% from the end of 2021 to the end of 2022.

Additionally, digital assets are not subject to the protections typically enjoyed by more conventional types of financial assets, such as FDIC or Securities Investor Protection Corporation insurance. If our digital assets are lost, stolen or destroyed, we may not have adequate sources of recovery and, even if we can identify a third party responsible for such loss, theft or destruction, such third party may not have the financial resources sufficient to make us whole again. Digital asset networks may also be subject to vulnerabilities, such as a “51% attack” where, if a mining pool were to gain control of more than 50% of the “hash” rate, or the amount of computing and process power being contributed to the network through mining, a malicious actor would be able to gain full control of the network and the ability to manipulate the blockchain. A significant portion of an individual digital asset may be held by a small number of holders, who would have the ability to manipulate the price of the asset. In addition, we do not have insurance that covers our digital asset holdings in the event of loss or fraud. As a result, we may suffer a loss with respect to our digital asset holdings, and we may not be able to recover any of our carried value in these digital asset holdings if they are lost or stolen. If we are not otherwise able to recover damages from a malicious actor in connection with these losses, our business and results of operations may suffer, which may have a material negative impact on the price of our Class A common stock.

Our revenue may be adversely affected if the markets for Bitcoin, Tether, Ether and USDC deteriorate or if their prices decline, including as a result of the following factors:

Certain supported digital assets enable holders to earn rewards by participating in decentralized governance, bookkeeping and transaction confirmation activities on their underlying blockchain networks, such as through staking activities, including staking through validation, delegating and baking. Staking allows users to “stake” supported digital assets held in their Exodus wallets by participating in blockchain validation through a third-party API Provider, Everstake. Everstake currently provides and is expected to continue to provide such services for certain supported crypto assets to our users in order to enable them to earn rewards based on crypto assets held in their Exodus wallets. Everstake’s network may further require customer assets to be transferred into smart contracts on the underlying blockchain networks not under Everstake’s or anyone’s control. If Everstake or smart contracts fail to operate as expected, suffer cybersecurity attacks, experience security issues or encounter other problems, our users’ assets may be irretrievably lost. In addition, certain blockchain networks dictate requirements for participation in the relevant decentralized governance activity, and may impose penalties, or “slashing,” if the relevant activities are not performed correctly, such as if the staker, delegator or baker acts maliciously on the network, “double signs” any transactions, or experience extended downtimes. If Everstake is slashed by the underlying blockchain network, our users’ assets may be confiscated, withdrawn or burnt by the network. Any penalties or slashing events could damage our brand and reputation, discourage existing and future customers from utilizing Everstake’s services, and adversely impact our staking revenue earned through Everstake.

Our platform or our API Providers’ platforms may be exploited to facilitate illegal activity including fraud, money laundering, gambling, tax evasion and scams. We, our API Providers or our partners may be specifically targeted by individuals seeking to conduct fraudulent transfers, and it may be difficult or impossible for us to detect and avoid such transactions in certain circumstances. The use of our platform for illegal or improper purposes could subject us to claims, individual and class action lawsuits, and government and regulatory investigations, prosecutions, enforcement actions, inquiries, or requests that could result in liability and reputational harm for us. In the event that a customer is found responsible for intentionally or inadvertently violating the laws in any jurisdiction, we may be subject to governmental inquiries, enforcement actions, prosecution, or otherwise held secondarily liable for aiding or facilitating such activities.

Owners of intellectual property rights or government authorities may seek to bring legal action against software providers for involvement in the sale of infringing or allegedly infringing items. Any threatened or resulting claims could result in reputational harm, and any resulting liabilities, loss of transaction volume or increased costs could harm our business.

Moreover, while illegal activities are primarily facilitated through the use of fiat currencies, digital assets are relatively new and, in many jurisdictions, may be lightly regulated or largely unregulated. Many types of digital assets have characteristics, such as the speed with which digital currency transactions can be conducted, the ability to conduct transactions without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, and the irreversible nature of certain digital asset transactions, and encryption technology that anonymizes these transactions, that make digital assets susceptible to use in illegal activity. U.S. federal and state and foreign regulatory authorities and law enforcement agencies, such as the Department of Justice (“DOJ”), SEC, Commodities Futures Trading Commission (“CFTC”), FTC, OFAC or the Internal Revenue Service (“IRS”), and various state securities and financial regulators have taken and continue to take legal action against persons and entities alleged to be engaged in fraudulent schemes or other illicit activity involving digital assets. We also support digital assets that incorporate privacy-enhancing features, and may from time to time support additional digital assets with similar functionalities. These privacy-enhancing digital assets obscure the identities of sender and receiver, and may prevent law enforcement officials from tracing the source of funds on the blockchain. Facilitating transactions in these digital assets may cause us to be at increased risk of liability arising out of anti-money laundering and economic sanctions laws and regulations.

The Exodus Platform allows users to access the services offered and performed by our API Providers. The services provided by our API Providers allow users to engage in transactions such as digital asset exchanging, fiat onboarding and staking products for over 21,000 digital assets. We conduct KYB and other diligence with respect to our API Providers, and we understand that, in turn, the API Providers conduct AML and KYB procedures with respect to their service providers in accordance with their respective policies, procedures and regulatory obligations. However, we do not independently conduct diligence with respect to the third parties with which our API Providers contract. For example, we do not conduct diligence with respect to the exchanges and market makers with which our API Provider’s contract to support the services they provide to their users (including any users from the Exodus Platform). Because Exodus does not independently conduct diligence with respect to these third parties, we cannot assure users as to these third parties or the processes and procedures our API Providers use to engage such third parties.

Our API Providers and the third parties with whom they contract may be subject to financial, legal, regulatory, and labor issues, cybersecurity incidents, disruptions, interruptions, and other misconduct of which we are not aware. Should any of the foregoing materialize and lead to disruptions or issues in third party operations, risks to our users may include loss of information stored with or provided to the API Provider, along with loss of access to the digital assets or fiat currency used in any pending transaction with the API Provider. In such instances, because we do not control the operations of any of our API Providers or third parties with which they contract, we will be unable to intervene and can make no assurances as to the outcome of any issue or dispute between the user and API Provider. In these scenarios, users may blame or become dissatisfied with the Exodus Platform as a result of these negative experiences, which could adversely affect our ability to access or sell our digital services and subject us to legal or regulatory scrutiny, reputational harm and significant financial losses.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis. The Company had previously identified material weaknesses in the Company’s control environment whereby the Company did not design and maintain effective internal control over financial reporting with respect to the expertise and quantity of its resources. Specifically, management did not effectively execute a strategy to hire, train, and retain a sufficient quantity of personnel with an appropriate level of training, expertise and experience in certain areas important to financial reporting. In addition, we also identified a material weakness whereby management did not design and implement effective control activities based on the

criteria established in the Committee of Sponsoring Organizations framework. Management has committed to remediating these material weaknesses as promptly as possible and has implemented its remediation plan. We hired accounting personnel and an additional Sarbanes-Oxley Act of 2002 readiness resource as well as implemented processes and controls to better identify and manage segregation of duties intended to remediate the identified deficiencies, which constituted the material weaknesses. However, we cannot provide any assurances that the measures that we have taken or will take will be sufficient to remediate this material weakness, and we also cannot assure you that we have identified all of our existing material weaknesses.

Our ability to successfully execute on our business plan depends on the contribution of our senior management team as well as other key talent including platform development, operations, user support, general administrative functions and our creative and engineering teams. We have previously and may continue to experience increasing competition for available talent in the workforce as reflected by the low unemployment rate, shortages of available industry talent and increasing costs to retain employees. As a result, we could experience inefficiencies or a lack of business continuity due to employee turnover, new team members’ lack of historical knowledge and lack of familiarity with the business processes, operating requirements, purpose and culture, policies and procedures and key information technologies and related infrastructure used in our day-to-day operations and financial reporting. We may also experience additional costs as new employees learn their roles and gain necessary experience, in addition to the cost of hiring new individuals.

If we were to lose the services of members of our senior management team or other key talent, whether due to death, disability, resignation or termination of employment, our ability to successfully implement our business strategy, financial plans, marketing and other objectives could be significantly impaired. In addition, if we are unable to attract and retain qualified key talent, we may not be able to effectively and efficiently manage our business and execute our business plan.

We use a significant number of independent contractors in our international operations for whom we do not pay or withhold any employment tax based on their location or jurisdiction. Whether an individual is an employee or an independent contractor depends on applicable local law and may be subject to multiple, fact-intensive factors. There can be no assurance that legislative, judicial or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification of our independent contractors. Foreign tax authorities may determine that we have misclassified our independent contractors for employment tax or other purposes and, as a result, seek additional taxes from us or attempt to impose fines and penalties. Additionally, individual independent contractors could initiate legal actions asserting rights of employment in their various jurisdictions, which could include claims for unpaid wages or other benefits that are required by local laws. If we are required to pay employer taxes or pay backup withholding with respect to prior periods and/or any other amounts with respect to or on behalf of our independent contractors, our operating costs will increase, which could adversely impact our business, financial condition or results of operations. Additionally, if we are the subject of individual legal actions or government investigations related to our independent contractors, the dispute resolution process could be expensive and time consuming and result in the diversion of resources that could otherwise be deployed to grow our business. Even if any such dispute or investigation were to be resolved in our favor, we may be unable to recoup the expenses and other diverted resources committed to resolving the dispute or investigation and, if we receive negative publicity in connection with any such dispute, our reputation and brand may be harmed.

Despite geo-political unrest, we believe the digital asset industry remains resilient, as demonstrated by our increase in our volume in 2023. We actively monitor the impact of the dynamic macroeconomic environment and manage our business to adjust to such conditions. Any geo-political unrest could cause disruptions in the Company’s business and lead to interruptions, delays or loss of critical data. Specifically, financial and digital asset markets may be negatively affected by the conflict between Russia and Ukraine and the conflict between Israel and the Gaza Strip. We cannot

predict the extent to which our financial condition, results of operations or cash flows will ultimately be impacted by these ongoing economic conditions, however, we believe we are well-positioned to operate effectively through the present environment. While Exodus does not have physical infrastructure globally, we do have contractors and two subsidiaries outside of the United States and contracts with international third-party API Providers. Our international operations and any expansion internationally could subject us to a variety of additional risks and challenges, including:

While we have taken appropriate measures to ensure that we are in compliance with foreign laws and regulations, failure to mitigate the risks associated with our international providers could impact our ability to conduct our business as planned which could materially and adversely impact our business.

Miners generate revenue from both newly created Bitcoin (known as the “block reward”) and from fees taken upon verification of transactions. If the aggregate revenue from transaction fees and the block reward is below a miner’s cost, the miner may cease operations. Additionally, in the event of a fork of the Bitcoin network, some miners may choose to mine the alternative new Bitcoin resulting from the fork, thus reducing processing power on the original blockchain. Further, the incentives for miners to contribute processing power to the Bitcoin network is set to decrease over time. As a result of the Bitcoin network’s “halving” mechanism, the block reward that miners receive for successfully mining a block are cut in half each time the Bitcoin network mines 210,000 blocks. This type of “halving” event generally occurs once every four years and will continue until the maximum possible 21 million Bitcoin have been mined and released into circulation. Currently, there are approximately 19 million Bitcoin that have been mined and are in circulation.

In approximately 2140, new Bitcoin tokens will no longer be awarded for adding a new block and miners will only have transaction fees to incentivize them. As a result, it is expected that miners will need to be better compensated with higher transaction fees to ensure that there is adequate incentive for them to continue mining. If transaction confirmation fees become too high, the marketplace may be reluctant to use Bitcoin. This may result in decreased usage and limit expansion of the Bitcoin network in the retail. Conversely, if the reward for miners or the value of the transaction fees is insufficient to motivate miners, they may cease expending processing power for any blockchain to solve blocks and confirm transactions. Ultimately, if the awards of new Bitcoin for solving blocks declines and transaction fees for recording transactions are not sufficiently high to incentivize miners, or if the costs of validating

transactions grow disproportionately, miners may operate at a loss, transition to other networks or cease operations altogether. Each of these outcomes could, in turn, slow transaction validation and usage, which could have a negative impact on the Bitcoin network, which is the primary network used for Exodus’ operations.

An acute cessation of mining operations would reduce the collective processing power on the Bitcoin network, which would adversely affect the transaction verification process by temporarily decreasing the speed at which blocks are added to the blockchain and make the blockchain more vulnerable to a malicious actor obtaining control in excess of 50% of the processing power on the blockchain. Reductions in processing power could result in material, though temporary, delays in transaction confirmation time, which could delay receipt of revenue and payment of our operating expenses.

The Exodus Platform is built around holding, transferring, exchanging and using digital assets, which means our business depends on growth in the public’s adoption and acceptance of digital assets and the underlying blockchain technology to maintain and increase demand for the Exodus Platform. During 2022, multiple companies such as Core Scientific, Celsius Network, Voyager Digital Ltd., Three Arrows Capital and FTX and several of its affiliates all declared bankruptcy. While the FTX app was available on the Exodus Platform until we removed it in November 2022, it was never material to our business or results of operations. Following these events, users’ confidence in trading of digital assets has decreased and the digital asset market has experienced negative publicity and extreme price volatility. The decrease in confidence in digital assets has had and may continue to have a negative impact on our business, including a decline in users, transaction-based API fees and value of the digital assets held by Exodus.

The growth of the digital asset industry, as well as the blockchain networks on which digital assets rely, is subject to a high degree of uncertainty regarding consumer adoption and long-term development. The slowing or stopping of the development, general acceptance and adoption of digital assets and blockchain networks may deter or delay the acceptance and adoption of the Exodus Platform or the applications on the Exodus Platform. The factors affecting the further development of the digital asset industry, as well as blockchain networks, include, without limitation: worldwide growth in the adoption and use of digital assets and other blockchain technologies; the regulatory environment relating to digital assets and blockchains; the maintenance and development of the OSS protocol of blockchain networks; a decline in the popularity or acceptance of digital assets and related services; the availability of other forms or methods of buying and selling goods and services or trading assets, including new means of using government-backed currencies or existing networks; and general economic conditions globally and in the United States. For example, there is currently relatively limited use of digital assets in the retail and commercial marketplace in comparison to relatively extensive use as a store of value. Digital assets are not currently a form of legal tender in the United States and have only recently become selectively accepted as a means of payment for goods and services by some retail and commercial outlets, and the use of such assets by consumers to pay such retail and commercial outlets remains limited. Banks and other established financial institutions may refuse to process funds for digital asset transactions; process wire transfers to or from digital asset trading venues, companies or service providers; or maintain accounts for persons or entities transacting in digital assets or providing related services. In addition, some taxing jurisdictions, including the U.S., treat the use of certain digital assets as a medium of exchange for goods and services to be a taxable sale of such assets, which could discourage the use of such assets as a medium of exchange, especially for a holder of such assets that have appreciated in value.

As a result of growing environmental concerns around the use of energy in Bitcoin and other proof-of-work mining activities, digital asset mining activities may be subject to future legal and regulatory developments. On November 23, 2022, the governor of New York signed into law a two-year moratorium on new or renewed permits for certain electricity-generating facilities that use fossil fuel and provide energy for proof-of-work digital asset mining operations. While this action does not directly impact our current operations, it may be the beginning of a new

wave of climate change regulations aimed at preventing or reducing the growth of Bitcoin mining in jurisdictions in the United States, potentially including jurisdictions in which we now operate or may in the future operate. Similar actions in international jurisdictions in which we operate could have a material adverse effect on our operations. If further regulation follows, it is possible that the Bitcoin mining industry may not be able to adjust to a sudden and dramatic overhaul to our ability to deploy energy towards the operation of mining equipment and our business may suffer.

The evolving design of our platform may create challenges for various organizations, including governments, that seek to block certain content based on IP address “blacklists” or other mechanisms. If these challenges become too difficult for those organizations to overcome, they could make the decision to block content in an overbroad manner or block completely websites of providers that integrate with our platform. For example, the Chinese government restricts access to certain Google Cloud services from within the People’s Republic of China, and users of our mobile platform have experienced degraded functionality in China due to these restrictions on our platform’s ability to connect with those services. Some of these blocking efforts would be out of our control once they have been put in place and may limit our ability to provide our platform or third-party apps on a fully global basis, which could reduce demand for our platform among current or potential users and adversely impact our business, results of operations and financial condition.

A number of companies that engage in Bitcoin and/or other digital asset-related activities have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses associated with digital assets may have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions. To the extent that such events may happen to us, they could have a material adverse effect on our business, prospects or operations.

Although we believe we are compliant with U.S. tax reporting and withholding requirements with respect to our customers’ digital asset transactions, the exact scope and application of such requirements is not entirely clear. In August 2023, the U.S. Department of the Treasury (“USDT”) and the IRS released proposed regulations (the “Proposed Regulations”) related to our tax reporting and withholding obligations on our customer transactions in ways that differ from our existing compliance protocols and there is risk that we will not have proper records to ensure compliance for certain legacy customers or transactions. The Proposed Regulations would require us to invest substantially in new and retroactive compliance measures. If the IRS determines that we are not in compliance with our tax reporting or withholding requirements with respect to customer digital asset transactions, we may be exposed to significant taxes and penalties, which could adversely affect our financial position. Any actual or perceived failure by us to comply with the above or any other emerging tax regulations that apply to our operations could harm our business.

As a general matter, laws and regulations of digital assets, blockchain technologies and digital asset exchanges are currently undeveloped, vary among federal, state, local and international jurisdictions and are subject to significant uncertainty. Specifically, the laws and regulations governing un-hosted self-custody wallet providers like Exodus are currently undeveloped and many domestic and international laws and regulations that apply to digital assets, blockchain technologies and digital exchanges are not applicable to our core wallet business.

As digital assets, blockchain technologies and digital asset exchanges continue to expand in popularity and market size, laws and regulations governing un-hosted self-custody wallet providers like Exodus may also develop. In order to ensure compliance with these rules, regulations and laws, we monitor these areas closely and invest significant

resources in our legal, compliance, product and engineering teams to ensure our business practices evolve to help us comply with the current laws, regulations and legal standards to which we are subject, as well as to plan and prepare for changes in interpretations thereof, as well as additional laws, regulations, and legal standards that are introduced in the future.

Despite our efforts to comply with applicable laws and regulations, any actual or perceived failure to meet applicable requirements may result in an adverse effect on our business. As an example of how the uncertain and developing regulatory regime for digital assets, blockchain technologies and digital exchanges may impact our business as a self-custody wallet provider, earlier this year, the FCA published new rules relating to how digital assets can be marketed to consumers. Specifically, companies seeking to promote digital assets in the U.K. to retail consumers are required to register with the FCA or have any marketing approved by an authorized company. The Company cannot register with the FCA because it operates a self-custodial wallet, and the rules are focused on asset custodians. Therefore, in anticipation of these rules taking effect on October 8, 2023, the Company took steps before the deadline to comply with the new FCA rules by modifying its marketing materials to avoid a determination by the FCA that it was promoting digital assets.

Even with the steps taken by the Company, and although at the time the Company believed it was in compliance with such rules, the FCA utilized the broad nature of the new rules to state that the Company is not in compliance with the rules and placed the Company on its Warning List in November 2023. In April 2024, following months of constructive dialogue with the FCA, the FCA removed the Company from its Warning List. Had the Company failed to reach an agreement with the FCA to be removed from the Warning List, it may have had a negative effect on the Company’s financial performance and operations and, in the future, we could have been subject to a variety of civil, criminal and administrative fines, penalties, orders and actions as a result of our business activities.

To the extent we are required to comply with new regulations, or if licenses or other authorizations are required in one or more jurisdictions in which we operate or will operate, there is no guarantee that we will be able to comply with such regulations or be granted such licenses or authorizations. We may need to change our business model to comply with these legal or regulatory requirements, licensing and/or registration requirements in order to avoid violating applicable laws or regulations. Various legislative and executive bodies in the U.S. and in other countries may, in the future, adopt laws, regulations, guidance or other actions which may severely impact the development and growth of the Exodus Platform. Failure by Exodus, or certain users of the Exodus Platform, to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including civil penalties and fines. Despite our efforts to comply with applicable laws and regulations, any actual or perceived failure to meet applicable requirements may result in an adverse effect on our business.

Further, as digital assets, blockchain technologies and digital asset exchanges continue to expand in popularity and market size, federal and state agencies have begun to regulate their use and operation. State regulators in New York, Texas, New Hampshire, North Carolina and Washington have created new regulatory frameworks, published guidance on existing laws and regulations or amended their state’s statutes to include cryptocurrencies in their existing licensing requirements. Federal law continues to evolve as well. The USDT, the SEC and the Commodity Futures Trading Commission (“CFTC”) and the IRS have published guidance on the treatment of digital assets. Both federal and state agencies have instituted enforcement actions against those violating their interpretation of existing laws. While we have implemented policies and procedures, including geo-blocking technology, designed to help monitor for and ensure compliance with existing and new laws and regulations, there can be no assurance that we and our employees, contractors and agents will not violate or otherwise fail to comply with such laws and regulations.

Offers and sales of securities in the United States are required under the Securities Act to either be registered with the SEC or to qualify for an exemption from federal registration and may also be required to be registered with applicable state regulators. Certain digital assets could fall within the definition of a security. While we do not engage in trading of digital assets on our platform or otherwise engage in the business of effecting transactions in securities for the account of others on our platform, we receive compensation from the third-party exchanges that have connected to our Exchange Aggregator. We have created two separate fee structures for the third-party exchanges that have connected to our Exchange Aggregator. For services offered by API Providers to persons located in the United States, we charge fees based on a volume-based, tiered monthly subscription structure payable to us in arrears once

a month. For services offered by API Providers to persons located outside the United States, we generally utilize a transaction-based structure to charge API Providers a percentage of the underlying value of the digital asset transaction. We expect to continue our subscription-based model for services offered by API Providers to persons located inside the United States.

Certain digital assets could fall within the definition of a security, and the SEC has taken the position, through enforcement actions, that certain digital assets are securities including, but not limited to, Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA) and Axie Infinity (AXS). While we do not engage in trading of digital assets on our platform or otherwise engage in the business of effecting transactions in securities for the account of others on our platform, we receive compensation from the API Providers that have connected to our Exchange Aggregator. It is possible that a receipt of compensation based on the percentage of digital assets exchanged could be deemed to be the receipt of transaction-based fees for facilitating transactions in unregistered securities, and that we could be found to be facilitating or engaged ourselves and in violation of the federal and state securities laws, which could have a negative effect on our business, financial condition and results of operations. Historically, approximately 25% of our active users have been located in the U.S. at any given time.

It is possible that we could be viewed as a transfer agent for purposes of federal or state law. Because our platform allows our users to connect through APIs to exchanges that permit the transfer of digital assets, it is possible that if such digital assets were deemed to be securities, the SEC or another regulator could determine that we have acted as a transfer agent. We do not consider ourselves a transfer agent under the Exchange Act because our platform does not provide the services described in the definition of a “transfer agent” under the Exchange Act. However, it is possible that the SEC or another regulator could disagree with our position. If that were the case, we could be forced to register as a transfer agent and comply with applicable law, which could lead to our experiencing significant costs and could force us to change or cease our operations. Any of these developments could have a negative effect on our business, financial condition and results of operations.

We have taken the position that we are not a clearing agency under the Exchange Act because the Exodus Platform does not provide the services described in the definition of a clearing agency under the Exchange Act. However, it is possible that the SEC or another regulatory agency could disagree with our position. If so, we could be forced to register as a clearing agency and comply with applicable law, which could lead to significant costs and could force us to change or cease our operations. Any of these developments could have a negative effect on our business, financial condition and results of operations.

Exchanges and alternative trading systems (“ATSs”) are networks that constitute, maintain or provide a marketplace or facilities to aggregate orders of multiple purchasers and sellers of securities by displaying trading interests entered on the system to users through consolidated quote screens or receiving orders for processing and execution. This does not include systems that have only one seller for each security (e.g., the issuer), even if there are multiple buyers. Entities that are engaged as an exchange or ATS, with respect to securities, are subject to federal registration and significant regulatory oversight by the SEC and Financial Industry Regulatory Authority (“FINRA”). We do not consider ourselves an exchange or ATS because our platform does not provide the services that are undertaken by an exchange or ATS; however, it is possible that the SEC or another regulator could disagree with our position and require us to register and comply with applicable law, which could lead to significant costs and could force us to change or cease our operations.

We do not believe staking services offered to users of the Exodus Platform through third-party apps, such as Everstake, are deemed to be securities offerings. If a regulator were to disagree, we could be deemed a “statutory underwriter” under Section 2(a)(11) of the Securities Act and subject to additional regulatory obligations which could have a negative effect on our business, financial condition and results of operations.

It is possible that we could be found to be a money services business (“MSB”) at the federal level and/or a money transmitter at the state level. MSBs include, among other businesses, a person providing money transmission services such as the acceptance and transmission of currency, funds or other value that substitutes for currency from one person another location or person by any means. Because of the breadth of this definition, Financial Crimes Enforcement Network (“FinCEN”) regulations state that whether a person is a money transmitter is ultimately a facts and circumstances determination. In addition to registration obligations at the federal level, virtually every U.S. state (and the District of Columbia) requires entities providing money transmission services to be licensed by the appropriate state agency responsible for the supervision of financial institutions. State laws regulating money transmission are not uniform, but generally define money transmission to include the acceptance and transmission of money or monetary value to a location within or outside the United States by any means.

FinCEN has provided guidance indicating that without having total independent control over the value in users’ wallets, and where the value stored in the wallet is the property of the owner, such a business may fall outside the scope of MSB registration requirements. We believe that we do not meet the definition of an MSB because Exodus does not exercise total independent control over the value in our users’ wallets, accept or transmit cryptocurrency on behalf of any user or otherwise act as an intermediary for exchange of currencies by taking possession of such digital assets. For the same reasons, we believe we are outside the scope of state licensing requirements of a money transmitter. However, if we were deemed to be an MSB at the federal level, and/or a money transmitter at the state level, we could be subject to significant additional regulation, which could affect our business and operations.

Because some digital assets may currently be considered securities by regulators, it is possible that our activities with respect to digital assets, including digital asset staking, would cause us to be viewed as a “broker” or “dealer” under federal or state law.

If we were deemed to be a broker-dealer, as defined in the federal securities laws, we would have to comply with a number of regulatory requirements, including compliance with regulations that govern broker-dealer financial responsibility, such as Exchange Act Rule 15c3-3(b), which relates to establishing and maintaining physical possession or control of a user’s digital asset securities. It is likely that we would experience significant challenges in attempting to comply with these regulations and may not be able to achieve such compliance. Due to the nature of digital asset securities, if we were deemed to be a broker-dealer, it would likely be difficult for us to comply with the requirements to obtain and maintain physical possession or control of all fully paid or excess securities carried for the account of users. In addition, obtaining an exemption from such custody rules would likely result in significant financial costs and management resources and we may not be able to obtain such an exemption. For example, in the ATS Role in the Settlement of Digital Asset Security Trades, SEC Staff No-Action Letter (Sep. 25, 2020), the SEC Staff described an acceptable process for regulated self-custodial ATS exchanges, but such process would be costly to implement and operate. It is likely that we would not be able to implement and operate such a process. Should we be deemed to be a broker-dealer, and should we not be able to either obtain an exemption from or implement acceptable processes for compliance with the broker-dealer financial responsibility rules, we would be deemed not in compliance with the appropriate broker-dealer regulations. Such non-compliance would likely have a materially adverse effect on our business and financial operations. Moreover, pursuant to Section 29(b) of the Exchange Act, any contract made by Exodus in violation of any provision of the Exchange Act, including a sale of securities deemed to have been made by Exodus as an unregistered broker-dealer to an investor, would be voidable at the option of the investor. A successful claim by an investor would generally require the return of an amount equal to the purchase price and rescission of the purchase contract.

It is possible that our activities with respect to digital assets, including digital asset staking, would cause us to be viewed as a “broker” or “dealer” under federal or state law. Because the services that users can obtain related to these digital assets may be considered securities by regulators, the fees we receive from Everstake or other exchanges

could potentially raise regulatory issues related to whether the recipient of the fees is required to register as a broker-dealer under the Exchange Act. We believe that our fee structure does not require us to register as a broker-dealer, however, there is no guarantee that regulatory agencies will ultimately agree with our position, and we may be required to stop offering access to digital asset staking.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”), the U.S. domestic bribery statute contained in 18 U.S. Code § 201 and possibly other anti-bribery and anti-corruption laws in countries outside of the United States where we conduct our activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted to prohibit companies, their employees, agents, representatives, business partners and third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector.

We sometimes leverage third parties to sell our products and conduct our business abroad. Exodus, our team members, agents, representatives, business partners and third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies, or state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of such parties even if we do not explicitly authorize such activities. As we increase our international sales and business, our risks under these laws may increase.

Any allegations or violation of the FCPA or other applicable anti-bribery and anti-corruption laws could result in whistleblower complaints, sanctions, settlements, prosecution, enforcement actions, fines, damages, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, suspension or debarment from government contracts, all of which may have an adverse effect on our reputation, business, results of operations and prospects. Responding to any investigation or action will likely result in a materially significant diversion of management’s attention and resources, significant defense costs and other professional fees.

Furthermore, we rely on third parties for our KYC and other compliance obligations. If these third parties fail to effectively provide these services, we may be subject to adverse consequences as described above.

Although we believe we are operating in compliance with the laws of jurisdictions in which Exodus operates, these laws and regulations are evolving, may impose inconsistent or conflicting standards among jurisdictions, can be subject to significant change and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions.

For example, foreign countries and governmental bodies, including the European Union (EU) and United Kingdom (U.K.) and other jurisdictions in which we operate or conduct our business, have laws and regulations concerning the collection, use, retention, security and transfer of the personal data of individuals in those jurisdictions. We may become subject to GDPR and U.K. GDPR, which impose stringent privacy and data protection requirements, and could increase the risk of non-compliance and the costs of providing our products and services in a compliant manner. Additionally, the GDPR (covering the European Economic Area), U.K. GDPR and Swiss data protection regimes impose strict rules on the transfer of personal data out of the EU, U.K. or Switzerland to a “third country,” including to the United States. As an un-hosted self-custody wallet provider, we do not process the personal data of our customers and therefore, compliance with these regimes do not currently have a material impact on our business. However, any actual or perceived breach of the GDPR or U.K. GDPR in the future could further add to our compliance costs, limit how we process information, or lead to reputational damage, regulatory investigations or fines. For example, if regulators assert that we have failed to comply with the GDPR or U.K. GDPR, we may be subject to fines. We may also face civil claims, as well as associated costs, diversion of internal resources, and reputational harm.

Aspects of the GDPR, U.K. GDPR, California Consumer Privacy Act (“CCPA”), Swiss Secretariat for Economic Affairs (“SECO”) and other laws, regulations, industry standards and other obligations related to privacy, data protection and data security remain uncertain. As such, compliance may require us to incur additional costs, modify our data handling practices and restrict our business operations. It is also possible that these laws, regulations, industry standards and other obligations may be interpreted and applied in a manner that is, or is alleged to be,

inconsistent with our policies and procedures, the Exodus Platform or our services. If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to modify the Exodus Platform or services or make changes to our business activities and practices. We may be unable to make such changes and modifications in a commercially reasonable manner, or at all, and our ability to develop new offerings and features could be limited.

Despite our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection, and information security, any actual or perceived failure to meet applicable requirements may result in an adverse effect on our business. We also expect that there will continue to be new proposed laws, regulations and standards relating to privacy and data protection in various jurisdictions, and we cannot determine the impact such laws, regulations and standards may have on our business.

Under U.S. export control and sanctions laws and regulations, including EAR and various economic and trade sanctions administered by OFAC, our business activities are subject to various restrictions related to the sale or supply of certain products and services to U.S. embargoed or sanctioned countries, governments, persons and entities and require authorization for the export of certain encryption items. Although we take precautions to prevent our software and services from being accessed or provided in violation of such laws, we may have previously allowed our software to be downloaded by individuals or entities potentially located in countries or territories subject to U.S. trade embargoes, potentially in violation of U.S. sanctions laws. In December 2018, we received an administrative subpoena issued by OFAC seeking information regarding potential transactions with individuals in Iran. In response, we conducted a comprehensive review that covered all countries and territories subject to U.S. trade embargoes administered by OFAC. We submitted a voluntary self-disclosure and subpoena responses regarding potential violations to OFAC, and took remedial action designed to prevent similar activity from occurring in the future. In June 2024, OFAC issued a Pre-Penalty Notice informing the Company that OFAC intends to impose a civil monetary penalty for alleged violations of U.S. sanctions laws. The alleged violations involve the free download of the un-hosted self-custodial Exodus wallet by users potentially located in Iran, Syria, Sudan, and the Crimea region of Ukraine, as well as the provision of customer support to users potentially located in Iran and Crimea. We submitted a response to the Pre-Penalty Notice, which asserts a range of factual and legal defenses to these allegations. Our response is currently under review by OFAC and as of the date of this Report, no amount has been accrued as we are unable to predict the outcome of this matter or reasonably estimate any possible loss. If OFAC decides to issue a final Penalty Notice, a civil monetary penalty may be assessed. If the Company decides to challenge a final Penalty Notice in federal court, the Company would incur additional legal fees. There is no guarantee that such a challenge will result in a reduction to any amount in the final Penalty Notice, and any such amounts may be material to our business, operating results and prospects.

At this time, there is no specifically enumerated U.S. or foreign governmental, regulatory, investigative or prosecutorial authority or mechanism through which to bring an action or complaint regarding missing or stolen digital assets. Although law enforcement agencies like the Federal Bureau of Investigation have recovered stolen Bitcoin, recovery efforts have been labor intensive. To the extent that we are unable to recover our losses from such action, error or theft, such events could have a material adverse effect on our business, prospects, operations and potentially the value of any Bitcoin we acquire or hold for our own account.

Shares of our Class A common stock may experience rapid and substantial price and trading volume volatility unrelated to our financial performance, which could cause purchasers of our Class A common stock to incur substantial losses. Extreme fluctuations in the market price and trading volume of our Class A common stock may occur in response to:

We cannot assure you that the market price and trading volume of our Class A common stock will not fluctuate or decline significantly in the future, in which case you could incur substantial losses. Further, the market price and trading volume of our shares of Class A common stock may fluctuate dramatically, regardless of any developments in our business.

There is currently a limited public market for our Class A common stock and our shares of Class A common stock currently trade on the OTCQX under the symbol “EXOD.” An active trading market for our Class A common stock may not be sustained. A public trading market having the desirable characteristics of depth, liquidity and orderliness depends upon the existence of willing buyers and sellers at any given time, and its existence is dependent upon the individual decisions of buyers and sellers over which neither we nor any market maker has control. In the absence of an active public trading market you may not be able to sell our shares in open market transactions. An inactive market may also impair our ability to raise capital to fund operations by selling Class A common stock and may impair our ability to make strategic investments by using our Class A common stock as consideration. In addition, the market price of our Class A common stock may fluctuate significantly.

The market price of our Class A Common Stock could vary significantly as a result of a number of factors and trends, some of which are beyond our control. In the event of a drop in the market price of our Class A Common Stock, investors could lose a substantial part or all of their investment in our Class A Common Stock.

We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Our authorized common stock is divided into two series, denominated as “Class A common stock” and “Class B common stock.” Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by law or our amended and restated certificate of incorporation.

The stockholders holding shares of Class B common stock collectively beneficially own shares representing approximately 98% of the voting power of our outstanding capital stock. Jon Paul Richardson and Daniel Castagnoli, each an executive officer and director of the Company, control approximately 85% of the voting power of our outstanding capital stock. Because of our dual class structure, we anticipate that, for the foreseeable future, these individuals will continue to be able to control all matters submitted to our stockholders for approval, including the election and removal of directors.

These holders of Class B common stock may vote in a way which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company and might ultimately affect the market price of our Class A common stock.

Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our amended and restated Certificate of Incorporation, including, without limitation, transfers for tax and estate planning purposes, so long as the transferring holder of Class B common stock continues to hold exclusive voting and dispositive power with respect to the shares transferred. All shares of Class B common stock will convert automatically into shares of Class A common stock upon the date on which the Class B common stock ceases to represent at least 10% of the total voting power of our outstanding common stock. The conversion of shares of Class B common stock into shares of Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term, which may primarily include our executive officers and directors.

Certain provisions of our amended and restated Certificate of Incorporation and our amended and restated By-Laws could have the effect of delaying, deferring or discouraging another person from acquiring control of our company, delaying or preventing changes in control of our management team, board of directors, governance or policy and could limit the price that some investors might be willing to pay for shares of our common stock. These provisions: prohibit our stockholders from calling special meetings of our stockholders; include the absence of cumulative voting; authorize our board of directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may be determined at the sole discretion of our Board of Directors; reflect the dual class structure for our common stock; and restrict the forum for certain litigation against us to certain federal or Delaware state courts. These provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our board of directors determines is in our best interests and that of our stockholders.

In general, Section 203 of the Delaware General Corporation Law (“Section 203”) prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. We elected in our amended and restated certificate of incorporation to not be subject to the provisions of Section 203. This may make us more vulnerable to takeovers that are completed without the approval of our board of directors and/or without giving us the ability to prohibit or delay such takeovers as effectively.

Our directors and officers currently have beneficial ownership of a majority of the total voting power. As a result, we would likely be considered a “controlled company” within the meaning of the corporate governance standards of the NYSE American and may be exempt from certain stock exchange corporate governance requirements that would apply if we were are accepted to list on the NYSE American and that we are currently not required to comply with under the governance standards of the OTCQX, which include (i) the requirement that a majority of the board consists of independent directors, (ii) the requirement that the Company’s nominating and corporate governance committee consists entirely of independent directors and (iii) the requirement that the Company’s compensation committee consists entirely of independent directors. If we are accepted to list on the NYSE American and elected to be exempt from some or all corporate governance requirements, you may not have the same protections afforded to stockholders of companies that are subject to all the corporate governance requirements of the NYSE American.

Each share of Class A common stock has a corresponding Common Stock Token, and the Common Stock Tokens are maintained by Securitize. The infrastructure that facilitates peer-to-peer transactions in our Common Stock Tokens is a novel system and has been subject to only limited testing and usage, which subjects it to the following risks, including:

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 13 of this Report, which includes additional information about our accounting policies, practices and the transactions underlying our financial results.

We are engaged principally in the business of creating and distributing self-custodial wallets for digital assets. Because a majority of our revenue is derived from services provided by API Providers to persons located outside the United States pursuant a transaction-based structure, our profitability is dependent on a number of factors including the pricing of digital assets, the volume of transactions and the quality of our third-party relationships.

Based on the services offered and transactions conducted by API Providers, the following table shows the digital assets that are most material to our business by revenue.

The following table shows revenue earned from our API Providers in relation to our primary revenue driver, exchange aggregation, involving the digital assets shown in the table above, disaggregated by geography (based on the addresses of the Company’s API Providers).

For more information regarding the characteristics of digital assets, see “Item 1. Business – Our Industry.” These digital assets are generally available in all jurisdictions in which the Exodus Platform is available. See “Note 3—Revenue Recognition” to our consolidated financial statements included in this Report.

To measure user activity, we rely on the number of monthly active users (“MAUs”) of our Exodus Platform. We define an MAU as any user with transaction history in any month. A user has “transaction history” if, in the last 30 calendar days, the user performed any activity within the application such as opening their application to check digital asset prices, reading news, or accessing the services of our API Providers. A user will not have “transaction history” if it merely opens our wallet application without further action. MAUs provide a measurement of attraction and retention levels and user engagement by allowing management to compare “churn users,” defined as users who have been inactive on the Exodus Platform for three consecutive months, against “renewing users,” defined as users who have been active on the Exodus Platform for two consecutive months, and “new users,” defined as users new to the platform that month. Within each cohort of churn users, renewing users, and new users, we then identify the funded users to assess users’ ability to engage with the Exodus Platform. The term “funded users” refers to users whose wallet currently holds digital assets of value as determined by blockchain and pricing provider data. MAUs consist of both funded wallets and unfunded wallets. Because Exodus does not have accounts, users do not close an

account or otherwise leave the platform. Therefore, churn users may become new users in the next month or at any point in the future as they re-engage with the platform. A positive MAUs percentage indicates that new and renewing users exceed churned users in a given month and that interest in the Exodus Platform is increasing. Management views increasing interest in the Exodus Platform over time as a key indicator of increasing revenue, especially for MAUs outside of the United States as the likelihood of revenue-generating transactions increases as user interest increases.

Total revenue increased $5.6 million, or 11%, in 2023 when compared with 2022. The increase was primarily driven by an increase in revenue from the exchange aggregation and fiat onboarding of $3.3 million and $1.8 million, respectively, due primarily to an increase in MAUs of 22% as well as an increase in API Provider processed volume of 4% as compared to the corresponding period in 2022. Users of the Exodus Platform increased the value of our platform to our API Providers as increased users increase the likelihood that our platform will drive revenue-generating activities to the API Providers, with active users further increasing this likelihood.

Cost of revenues increased $1.8 million, or 6%, in 2023, when compared with 2022. The increase was primarily driven by increases in cloud infrastructure services of $1.5 million, which was due to increased database capacity as a result of the continued expansion of our platform and new users, depreciation and amortization of $1.1 million, and lower capitalized labor of $1.8 million offset by decreases in employee compensation and benefit expense of $1.7 million as a result of lower headcount, tech subscriptions of $0.3 million, consulting of $0.2 million and other miscellaneous expenses of $0.4 million.

General and administrative expenses in 2023 decreased $9.6 million, or 34%, compared to 2022. This decrease was primarily due to decreases in marketing & advertising expenses of $8.9 million. In the first half of 2022, we heavily invested in marketing and advertising expenses. During the latter half of 2022, we changed our strategy to focus on an organic marketing growth strategy that relies on our established brand reputation. This decrease was also due to decreases in foreign currency expense of $1.3 million due to fluctuating market rates during the year, as well as

employee compensation and benefit expenses of $1.0 million as a result of lower headcount related to the strategic reduction of workforce in November 2022. This was offset by increases in legal and consulting expenses of $1.6 million primarily due to legal expenses related to regulatory matters and our Form 10 filing.

For 2023, there was a gain on settlement of digital assets of $5.0 million compared to a gain on settlement of digital assets of $3.4 million in 2022, as assets were sold for greater than their carrying value. For 2023, there was an impairment on digital assets of $3.6 million compared to $21.7 million in 2022, primarily related to impairment of Bitcoin for both years, as price volatility on digital assets improved in 2023.

Impairment of assets of $0.2 million in 2023 was related to the write off of our investment in tZERO Technologies, LLC (“tZERO”) as a result of the Company forfeiting vested shares. Impairment of assets of $0.5 million in 2022 was primarily driven by the impairment of our investment in Magic Eden of $0.4 million.

Income tax benefit was $1.9 million in 2023 compared to a benefit of $0.9 million for the same period in 2022. The effective tax rate during 2023 was (17.3)% compared to 4.3% in 2022. The benefit during 2023 was primarily driven by the increased level of pre-tax income.

Our primary liquidity needs include payment of our operating costs, which consist primarily of compensation and benefit expenses and security costs. Our primary sources of funding are operating cash flows.

The following table summarizes Exodus’ cash flows for the periods indicated (in thousands):

During the year ended December 31, 2023, cash from operating activities decreased by $43.7 million, compared with the same period in 2022. The change was primarily related to a decrease in other operating activities settled in digital assets and USDC of $56.9 million which consisted of $48.1 million of conversion of digital assets and USDC to cash to fund operations and $1.9 million related to payroll expense settled in digital assets, which is included in digital asset expenses as discussed in the other operating activities settled in digital assets and USDC in Note 6, “Intangible Assets.” Also driving the decrease was $19.7 million of net decrease in (gain) impairment on digital assets, net offset by an increase in net income of $35.9 million.

Cash used in investing activities decreased by $22.9 million during 2023 when compared with the prior-year period. Our primary use of cash in investing activities is for the purchase and redemption of treasury bills.

Cash used in financing activities increased by $3.4 million during 2023 when compared with the prior-year period. Financing activities during 2023 represent our repurchase of shares to pay employee withholding taxes as a part of our 2021 Equity Incentive Plan (the “2021 Plan”). Financing activities in 2022 consisted of proceeds from a note receivable of $3.0 million, partially offset by $0.5 million of repurchase of shares to pay employee withholding taxes as a part of our 2019 Equity Incentive Plan (the “2019 Plan”) and the 2021 Plan.

The Company holds the following cash and cash equivalents (including treasury bills with a maturity date of less than three months), USDC, treasury bills with a maturity date of greater than three months and digital asset holdings as of December 31, 2023 and December 31, 2022 (in thousands):

Exodus currently has no material commitments for capital expenditures. At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to fund our operations through the next twelve months and thereafter for the foreseeable future.

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of the consolidated financial statements requires management to make estimates and judgments that affect the reported amounts in our consolidated financial statements and accompanying notes.

Certain of our accounting policies, as discussed below, involve a higher degree of judgment and complexity in their application and, therefore, represent the critical accounting policies used in the preparation of our consolidated financial statements. If different assumptions or conditions were to prevail, the results could be materially different from our reported results. For additional discussion of our critical accounting policies and estimates, as well as our significant accounting policies, see “Note 2—Summary of Significant Accounting Policies.”

We determined that income taxes involve critical estimates based on management’s significant judgments to determine our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets, including, for example, compliance with the 2017 United States Tax Cuts and Jobs Act. To the extent that our estimates and assumptions materially change, or if actual circumstances differ materially from those in the assumptions, our financial statements could be materially impacted.

We utilize the asset and liability method for computing our income tax provision. Deferred tax assets and liabilities reflect the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as operating loss, capital loss and tax credit carryforwards, using enacted tax rates. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance. Assessing the need for a valuation allowance requires a great deal of judgment and we consider all available evidence to determine whether it is more likely than not that our deferred tax assets are recoverable. We evaluate all available evidence including, history of earnings and losses, taxable income forecasts and whether the evidence is objective. See Note 10, “Income Taxes.”

We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be maintained by the examination of taxing authorities. The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are recognized within the provision for income taxes. See Note 10, “Income Taxes.”

For U.S. federal tax purposes, digital asset transactions are treated for tax purposes by recognizing a gain or loss when digital assets are exchanged, in the amount of the difference between the fair market value of the property received and the tax basis of the exchanged digital assets. Receipts of digital assets in exchange for goods or services are included in taxable income at the fair market value on the date of receipt.

We operate completely remotely and do not maintain a physical corporate headquarters. We believe that our remote working operations are adequate to meet our needs for the immediate future, and that, if necessary, suitable physical space will be available to accommodate any expansion of our operations.

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of December 31, 2023 for (i) each of our directors and named executive officers (“NEOs”) on an individual basis and our directors and executive officers on a group basis and (ii) any securityholder who beneficially owns more than 5% of either class of our common stock.

We have determined beneficial ownership in accordance with the rules of the SEC. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to community property laws where applicable.

The beneficial ownership figures presented in the table below are derived from our stock records. These beneficial ownership percentages were calculated based on 4,320,005 shares of Class A common stock and 21,760,855 shares of Class B common stock outstanding as of December 31, 2023. The Class A Common Stock beneficial ownership figures do not include the shares of Class A Common Stock that may be issued and outstanding upon conversion of the Class B Common Stock beneficially owned by the Class B stockholders listed in the table below.

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Exodus Movement, Inc., 15418 Weir Street, #333, Omaha, NE 68137.