American Bitcoin Corp (ABTC) Risk Analysis

Although our Class A common stock is listed on Nasdaq, an active trading market for our Class A common stock may never develop or be sustained. The lack of an active market may impair your ability to sell your shares of Class A common stock at the time you wish to sell them or at a price that you consider reasonable. An inactive market may also impair our ability to raise capital by selling securities and may impair our ability to acquire other businesses or technologies using our securities as consideration, which, in turn, could materially adversely affect our business. The market price of our Class A common stock has been, and is likely to continue to be, volatile and may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: - volatility in the price of Bitcoin - overall performance of the equity markets;- our operating performance and the performance of other similar companies;- the published opinions and third-party valuations by banking and market analysts;- changes in our projected operating results, if any, that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts;- regulatory or legal developments;- the level of expenses related to operations;- our failure to achieve our goals in the timeframe we announce;- announcements of acquisitions, strategic alliances, or significant agreements by us;- recruitment or departure of key personnel;- the economy as a whole and market conditions in our industry;- trading activity by stockholders who may own or transact in significant amounts of our Class A common stock, including upon the expiration of any contractual restrictions;- the size of our public float;- political uncertainty and/or instability in the United States; and - any other factors discussed in this Annual Report and our other filings with the SEC. In addition, the equity markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many Bitcoin mining and digital asset companies. Stock prices of many Bitcoin mining and digital asset companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business, financial condition, and results of operations.

A number of provisions relating to the multi-class structure of our capital stock are rare or otherwise not common among other corporations with multiple class structures. For instance, each share of our Class B common stock is entitled to 10,000 votes per share, each share of our Class C common stock is entitled to 10 votes per share and each share of our Class A common stock is entitled to one vote per share. Additionally, our Amended and Restated Certificate of Incorporation (the "Charter") provides that transfers by holders of our Class B common stock and Class C common stock will not result in those shares automatically converting to Class A common stock. Moreover, our Charter does not provide for any automatic conversion of shares of our Class B common stock and Class C common stock into Class A common stock, regardless of identity of the holders thereof or the size of their holdings of the same. See "Description of Capital Stock" in Exhibit 4.1 to this Annual Report. As of March 25, 2026, Hut 8 owns approximately 55.3% of the shares of our common stock and a majority of the total combined voting power of our outstanding capital stock. As of March 25, 2026, Hut 8, together with our other greater than 5% stockholders, own 61.7% of the shares of our common stock, in total representing a majority of the total combined voting power of our outstanding capital stock. For so long as Hut 8 owns shares of our capital stock that represent a majority of the combined voting power of our outstanding capital stock, it will be able to control any corporate action that requires a stockholder vote, regardless of the vote of any other stockholder, subject to certain limited exceptions for certain class votes. As a result, Hut 8 has, and is expected to continue to have the ability to control significant corporate activities, including, but not limited to: - subject to the provisions of the Investors' Rights Agreement, the election of the Board and, through the Board, decision-making with respect to our business direction and policies, including the appointment and removal of our officers;- acquisitions or dispositions of businesses or assets, mergers, or other business combinations;- issuances of shares of our Class A common stock, Class B Common Stock, and Class C Common Stock and changes to our capital structure generally;- corporate opportunities that may be suitable for us and Hut 8, subject to the corporate opportunity provisions in our Charter;- financing activities, including the issuance of debt securities and/or the incurrence of other indebtedness generally;- stock repurchases or the payment of one-time or recurring dividends; and - the number of shares available for issuance under our equity incentive plans. This voting control limits the ability of other stockholders to influence corporate matters and, as a result, we may take actions that stockholders other than Hut 8 do not view as beneficial. This voting control may also discourage or have the effect of delaying, deferring or preventing transactions involving a change of control in us, including transactions in which holders of shares of our Class A common stock might otherwise receive a premium for their shares. Even if Hut 8 owns shares of our capital stock representing less than a majority of the total combined voting power of our outstanding capital stock, so long as Hut 8 owns shares representing a significant percentage of our total combined voting power, Hut 8 will continue to have the ability to substantially influence these significant corporate activities. See "-Risks Related to Bitcoin-Our operations are dependent upon maintaining a good relationship with Hut 8."

It cannot be determined whether our multi-class structure results in a lower or more volatile market price for our Class A common stock, or gives rise to adverse publicity or other adverse consequences. Certain stock index providers exclude or limit the ability of companies with multi-class share structures from being added to certain of their indices. In addition, several stockholder advisory firms and large institutional investors oppose the use of multi-class share structures. As a result, our multi-class share structure may make us ineligible for inclusion in certain indices and may discourage such indices from selecting us for inclusion, may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure and may result in large institutional investors not purchasing shares of our Class A common stock. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, any exclusion from certain stock indices could result in less demand for our Class A common stock. Any actions or publications by stockholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock. See "Description of Capital Stock" in Exhibit 4.1 to this Annual Report.

Various conflicts of interest between us and Hut 8 could arise. We have five directors, all of whom have been designated by Hut 8 and two of whom are current directors and executive officers of both us and Hut 8. Ownership interests of these individuals and Hut 8 in our capital stock and ownership interests of our directors and officers in Hut 8 capital stock or service by an individual as either a director and/or officer of both companies, could create, or appear to create, potential conflicts of interest when such individuals are faced with decisions relating to us. These could include: - corporate opportunities;- the impact that operating or capital decisions, including the incurrence of indebtedness, relating to our business may have on Hut 8's Consolidated Financial Statements and/or current or future indebtedness, including related covenants;- business combinations involving us;- our dividend and stock repurchase policies;- management stock ownership; and - any intercompany agreements and services between us and Hut 8, including the Hut Agreements. Potential conflicts of interest could also arise if we decide to enter into new commercial arrangements with Hut 8 in the future or in connection with Hut 8's desire to enter into new commercial arrangements with third parties. Additionally, Hut 8 may be constrained by the terms of agreements relating to its indebtedness from taking actions, or permitting us to take actions, that may be in our best interest. Furthermore, disputes may arise between us and Hut 8 relating to our business relationships and these potential conflicts of interest may make it more difficult for us to favorably resolve such disputes, including those related to tax, employee benefits, indemnification, and other matters arising from the Mergers; the nature, quality, and pricing of services Hut 8 agrees to provide to us; sales or other disposals by Hut 8 of all or a portion of its ownership interest in us; and business combinations involving us. We may not be able to resolve any potential conflicts and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated third party. While we will be controlled by Hut 8, we may not have the leverage to negotiate amendments to our various agreements with Hut 8, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party. See "-Risks Related to Bitcoin-Our operations are dependent upon maintaining a good relationship with Hut 8."

Hut 8 owns more than 50% of the combined voting power of our outstanding capital stock, so we are a "controlled company" under the rules of The Nasdaq Stock Market, LLC (the "Nasdaq Corporate Governance Rules"). As a "controlled company," we are exempt from compliance with certain marketplace rules related to corporate governance, including that: (i) a majority of the Board must be comprised of "Independent Directors" (as defined in the Nasdaq Corporate Governance Rules), (ii) we must adopt a formal written compensation committee charter and have a compensation committee of at least two members, each of which must be an independent director, and (iii) we must adopt a formal written charter or board resolution addressing the nomination process whereby director nominees are selected either by: (a) Independent Directors constituting a majority of the Board's Independent Directors in a vote in which only Independent Directors participate or (b) a nominations committee comprised solely of Independent Directors. We rely on certain "controlled company" exemptions. As a result, we do not have a compensation committee and do not have a nominations committee or independent nominating function. Accordingly, for so long as we remain a "controlled company" and avail ourself of these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the requirements of the Nasdaq Corporate Governance Rules.

Additional capital will be needed to continue our planned operations and pursue our strategy. We plan to raise significant amounts of additional capital, including in amounts that may exceed our current estimates of enterprise value and future market capitalization, and may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and amounts and in a manner we determine from time to time in order to do so. To the extent we raise additional capital by issuing equity securities, our stockholders are likely to experience substantial dilution and some or all of our financial measures on a per share basis could be reduced. If we sell common stock, convertible securities, or other equity securities in more than one transaction, investors are likely to be materially diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders and new investors could gain rights superior to existing stockholders. The perception of, including as a result of any announcement or public knowledge of our intentions, or actual occurrence of, frequent and large capital raising transactions could adversely affect our stock price and increase our volatility. Pursuant to the Amended and Restated American Bitcoin Corp. 2025 Omnibus Incentive Plan (the "2025 Plan"), the Board is authorized to grant stock options and other equity-based awards to our employees, directors, and consultants, which equity-based awards would also cause dilution to our stockholders. In connection with the Mergers, 181,964,231 shares of our Class C common stock were reserved for issuance under the 2025 Plan. In addition, pursuant to the 2025 Plan, the number of shares of our Class C common stock reserved for issuance automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1, 2026, and ending on (and including) January 1, 2035, by the lesser of (a) a number of shares of common stock equal to the excess of (i) 20% of the number of issued and outstanding fully diluted shares of common stock on December 31stof the preceding calendar year over (ii) the number of shares reserved for issuance under the 2025 Plan as of such date and (b) such number of shares determined by the Board. Pursuant to this automatic increase and subsequent issuances under the 2025 Plan, stockholders may experience additional dilution, which could cause the market price of our Class A common stock to fall.

Sales of a substantial number of shares of our Class A common stock or other securities or the perception that these sales might occur could significantly reduce the market price of our Class A common stock and impair our ability to raise adequate capital through the sale of additional equity securities. In addition, a significant number of shares of our common stock are subject to contractual restrictions on resale, and may be sold at or around a similar time upon expiration of such restrictions. We are unable to predict what effect, if any, market sales of securities held by our significant stockholders, directors, or officers or the availability of these securities for future sale will have on the market price of our Class A common stock.

The trading market for our Class A common stock may be influenced by the research and reports that equity research analysts publish about us and our business. Equity research analysts may elect to not provide research coverage of us and such lack of research coverage may adversely affect the market price of our Class A common stock. In the event we do have sufficient equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our Class A common stock could decline if one or more equity research analysts downgrade the stock or issue other unfavorable commentary or research. If one or more equity research analysts cease coverage of us or fail to publish reports on us regularly, demand for our Class A common stock could decrease, which in turn could cause our Class A common stock price or trading volume to decline.

Our Charter provides that the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) is the sole and exclusive forum for (i) any derivative action, suit, or proceeding brought on behalf of us; (ii) any action, suit, or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or stockholders to us or to our stockholders; (iii) any action, suit, or proceeding arising pursuant to the Delaware General Corporation Law (the "DGCL") or our Charter or our bylaws (the "Bylaws") (as any of the foregoing may be amended from time to time); (iv) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Chancery Court; or (v) any action, suit, or proceeding asserting a claim governed by the internal affairs doctrine. As a result, any action brought by any of our stockholders with regard to any of these matters will need to be filed in the Court of Chancery of the State of Delaware and cannot be filed in any other jurisdiction; provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our Charter also provides that the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the U.S. Securities Act of 1933, as amended (the "Securities Act"). Nothing in our Charter or our Bylaws preclude stockholders that assert claims under the Exchange Act from bringing such claims in state or federal court, subject to applicable law. There is uncertainty as to whether a court would enforce the exclusive forum provision in connection with claims arising under the Securities Act, and in any event, our stockholders cannot waive compliance with federal securities laws and the rules and regulations thereunder. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees, or stockholders, which may discourage lawsuits with respect to such claims. If a court were to find the choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition, and results of operations.