BNB Plus Corp.: Form 10-Q for the period ended Mar 31, 2026

Forward-Looking Statements

This Quarterly Report on Form 10-Q (including but not limited to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are intended to qualify for the “safe harbor” created by those sections. In addition, we may make forward-looking statements in other documents filed with or furnished to the Securities and Exchange Commission (“SEC”), and our management and other representatives may make forward-looking statements orally or in writing to analysts, investors, representatives of the media and others. These statements relate to future events or to our future operating or financial performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.

Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts and include, but are not limited to, statements using terminology such as “can”, “may”, “could”, “should”, “assume”, “focus”, “believe”, “designed to”, “will”, “expect”, “plan”, “anticipate”, “estimate”, “potential”, “position”, “predicts”, “strategy”, “guidance”, “intend”, “seek”, “project” or “continue”, or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future. You should read statements that contain these words carefully because they:

• discuss our future expectations;
• contain projections of our future results of operations or of our financial condition; and
• state other “forward-looking” information.

We believe it is important to communicate our expectations. However, forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry and are subject to known and unknown risks, uncertainties and other factors. Accordingly, our actual results and the timing of certain events may differ materially from those expressed or implied in such forward-looking statements due to a variety of factors and risks, including, but not limited to, those set forth in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report, those set forth from time to time in our other filings with the SEC, including our Annual Report on Form 10-K, for the fiscal year ended September 30, 2025, and the following factors and risks:

• our expectations of future revenues, expenditures, capital or other funding requirements;
• the adequacy of our cash and working capital to fund present and planned operations and growth;
• our need for additional financing which may in turn require the issuance of additional shares of common stock, preferred stock or other debt or equity securities (including convertible securities) which would dilute the ownership held by stockholders;
• our projections regarding our expectation that our LineaRx subsidiary will significantly narrow its losses and approach profitability;
• our business strategy and the timing of our expansion plans, including our BNB Strategy (as defined below);
• failure to realize the anticipated benefits of the DAT strategy;
• risks related to the Company’s ability to raise and deploy capital effectively;
• risks related to an unproven BNB yield generation strategy;
• the risk that the price of our common stock may be highly correlated to the price of the digital assets that we hold;
• risks related to increased competition in the industries in which the Company does and will operate;
• risks relating to the treatment of cryptocurrency assets for U.S. and foreign tax purposes; and
• risks related to the unknown returns that the Company’s BNB Strategy (as defined below) will generate.

Any or all of our forward-looking statements may turn out to be wrong. They may be affected by inaccurate assumptions that we might make or by known or unknown risks and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in our forward-looking statements. Among the factors that could affect future results are:

• our ability to regain compliance with the Nasdaq listing requirements, including without limitation, the minimum closing bid price requirement for our common stock;
• our ability to maintain the listing of our securities on Nasdaq;
• the highly volatile nature of the price of BNB and other cryptocurrencies;
• the risks relating to the Company’s operations and business;
• demand for products and services provided by our LineaRx subsidiary;
• our ability to sell or otherwise monetize our LineaRx subsidiary and/or our LineaRx technology platforms;
• changes in the business market, financial, political and regulatory conditions;
• risks relating to significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally;
• risks relating to market volatility, cybersecurity and custody of digital assets, potential changes in laws or accounting standards relating to cryptocurrency, and regulatory developments affecting BNB;
• economic and industry conditions generally and in our specific markets;
• the volatility of, and decline in, our stock price;
• our ability to obtain the necessary financing to fund our operations and effect our strategic development plan;
• the possibility that our current holdings of BNB and/or our OBNB Trust Units could subject us to additional regulation that could materially impact the operations of our treasury strategy and our business, including but not limited to being classified as an investment company under the Investment Company Act; and
• if we were deemed to be an investment company under the Investment Company Act, applicable restrictions likely would make it impractical for us to continue segments of our business as currently contemplated.

All forward-looking statements and risk factors included in this Quarterly Report are made as of the date hereof, based on information available to us as of such date, and we assume no obligations to update any forward-looking statement or risk factor, unless we are required to do so by law. If we do update one or more forward-looking statements, no inference should be drawn that we will make updates with respect to other forward-looking statements or that we will make any further updates to those forward-looking statements at any future time.

Forward-looking statements may include our plans and objectives for future operations, including plans and objectives relating to the success of our BNB Strategy and our products and our future economic performance, projections, business strategy and timing and likelihood of success. Assumptions relating to the forward-looking statements included in this Quarterly Report involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, demand for our products and services, and the time and money required to successfully complete development and commercialization of our technologies, all of which are difficult or impossible to predict accurately and many of which are beyond our control.

Any of the assumptions underlying the forward-looking statements contained in this Quarterly Report could prove inaccurate and, therefore, we cannot assure you that any of the results or events contemplated in any of such forward-looking statements will be realized. Based on the significant uncertainties inherent in these forward-looking statements, the inclusion of any such statement should not be regarded as a representation or as a guarantee by us that our objectives or plans will be achieved, and we caution you against relying on any of the forward-looking statements contained herein.

Our trademarks currently used in the United States include Applied DNA Sciences®, LinearDNA™ and LineaIVT™. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. All trademarks, service marks and trade names included or incorporated by reference in this Quarterly Report on Form 10 - Q are the property of the respective owners.

Introduction

We are a digital asset treasury company that has adopted BNB, the native cryptocurrency of the Binance blockchain ecosystem as our primary reserve asset. By using proceeds from financings, as well as potential cashflow from our operations, we seek to strategically accumulate BNB and utilize the accumulated BNB as a productive treasury asset to produce yield via Binance native and DeFi opportunities. The Company’s digital asset, as well as its investment in digital asset trust, comprises the Company’s digital asset treasury, or “DAT”.

In addition, via LineaRx we are commercializing proprietary nucleic acid production solutions for the biopharmaceutical and diagnostics markets. Our nucleic acid production solutions enable cell-free manufacturing of DNA and RNA, which are essential components for a new generation of advanced biotherapeutics, such as gene therapies, adoptive cell therapies, messenger RNA therapeutics and DNA vaccines, as well as diagnostic applications.

BNB Strategy

We launched our DAT strategy in October 2025 with the closing of the Private Placement wherein we received $26.8 million gross proceeds in cash and cryptocurrency assets with the potential for up to an additional $30.8 million in cash gross proceeds in future investment from warrant exercises. Our current strategy is to primarily focus our resources on our BNB-focused DAT strategy wherein we manage digital assets, primarily in the native cryptocurrency of the Binance Coin blockchain commonly referred to as “BNB”, including staking, restaking, and liquid staking of BNB, and participation in other unique Binance ecosystem and DeFi yield opportunities to contribute the BNB to the Company’s treasury operations (together, the “BNB Strategy”). Currently, the Company is in the process of accumulating BNB tokens and building the framework necessary to implement its BNB Strategy.

We believe our BNB Strategy can produce potential yield via the implementation of one or more of the below strategies:

• Participation in the Binance Launch Pool: Receive airdrops of new project tokens listing on Binance via staking our BNB to the Binance Launch Pool. Airdrops are immediately sold to generate potential yield.
• Native Staking on Binance Smart Chain: Stake our BNB to various validators to support the network’s proof of stake authority (PoSa) consensus mechanism resulting in potential transaction fees and block rewards.
• Liquidity Providing: Provide liquidity on the largest BNB DEX between Lista Dao (liquid staking derivative token) and BNB to generate potential yield from swap fees.
• BNB Collateralization: Opportunistically collateralize our BNB and borrow stable coins to engage in non-directional DeFi strategies to produce potential yield.

In addition, the Company currently holds units of OBNB Trust Units. The Company plans to pursue opportunities to sell the OBNB Trust Units for cash to purchase additional BNB that will be used to further our BNB Strategy. Alternatively, the Company seeks to access the OBNB Trust Units’ underlying BNB assets in coordination with the administrator of the OBNB Osprey BNB Chain Trust and if successful, use the redeemed BNB assets to further its BNB Strategy.

On October 6, 2025, the Company’s Board of directors authorized, and its officers implemented, a restructuring plan pursuant to which the Company reduced overall operating expenses to focus resources on its BNB Strategy. The restructuring plan includes a reduction of the Company’s workforce by sixteen (16) employees, or approximately 60%. We incurred aggregate pre-tax charges in connection with the reduction-in-force, primarily consisting of severance payments, employee benefits, and related costs. The reduction-in-force was substantially completed by December 31, 2025 and associated charges of approximately $233 thousand and $1.4 million were recorded in the three and six months ended March 31, 2026, respectively.

LineaRx Business Strategy

Through LineaRx our 98% owned subsidiary, we are developing and commercializing our LineaDNA and Linea IVT platforms for the manufacture of synthetic DNA and associated enzymes for use in the production of nucleic acid-based therapeutics (the “Therapeutic DNA Production Services”).

Our nucleic-acid production solutions enable the rapid and efficient cell-free manufacturing of high-quality DNA and RNA, which are essential components for a new generation of advanced biotherapeutics such as gene therapies, personalized medicine, adoptive cell

therapies and messenger RNA (“mRNA”) and deoxyribonucleic acid (“DNA”)-based vaccines, as well as in vitro diagnostic (“IVD”) applications.

We have developed three distinct and complementary technology solutions:

• LineaDNA™: A proprietary, cell-free DNA production system that uses a large-scale polymerase chain reaction (“PCR”) process. This technology allows for the rapid and efficient production of high-fidelity synthetic DNA without the use of living cells. The resulting DNA can be used in the manufacturing of various biotherapeutics, serve as the starting material for mRNA therapeutics and vaccines, and as a critical component of IVDs.
• LineaRNAP™: A next-generation RNA polymerase (“RNAP”) used to transform DNA into mRNA. Our RNAP is engineered with a patented DNA-binding domain that we believe results in high mRNA yields and reduced double-stranded RNA (dsDNA) contamination, a common problematic byproduct produced during mRNA production.
• LineaIVT™: An integrated system that combines the Company’s LineaDNA and LineaRNAP technologies. This innovative solution simplifies the mRNA production workflow resulting in a streamlined production process with fewer impurities than traditional methods.

Our business strategy is to continue advancing our nucleic acid production solutions to support the potential future sale and/or licensing of our LineaRx business and/or its technology solutions to a third-party.

Comparison of Results of Operations for the Three–Months Ended March 31, 2026 and 2025

Revenues

Product revenues

For the three months ended March 31, 2026 and 2025, we generated $1,007,903 and $548,638 in revenues from product sales, respectively. Product revenue increased by $459,265 or 84% for the three-months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase in product revenues was due to an increase of $552,491 in sales to a large-scale DNA manufacturing customer and the timing of related orders within our Therapeutic DNA Production Services segment. This increase was offset by a net decrease in our DNA Tagging and Security Products and Services segment of $92,725 year over year in cotton DNA tagging revenue.

Service Revenues

For the three months ended March 31, 2026 and 2025, we generated $16,208 and $214,184 in revenues from sales of services, respectively. The decrease in service revenues of $197,976 or 92% for the three months ended March 31, 2026, as compared to the same period in the prior fiscal year is attributable to a decrease of $150,680 within our DNA Tagging and Security Products and Services segment due to a decrease in our textile isotopic testing services as we stopped providing these services during the prior fiscal year. This decrease was also attributable to a decrease of $47,798 within our Therapeutic DNA Production Services segment due to decreased research and development projects.

Cost and Expenses

Gross Profit

Gross profit for the three months ended March 31, 2026, increased by $431,268 or 109% to $826,786 from $395,518 for the three months ended March 31, 2025. The gross profit percentage was 81% and 52% for the three-months ended March 31, 2026 and 2025, respectively. The increase in gross profit percentage was primarily the result of decreased overhead and payroll costs included in costs of goods sold due to the reduction in headcount period over period. This coupled with the increased yield from manufacturing within our Therapeutic DNA Production Services segment resulted in the improved gross profit for the period.

Selling, General and Administrative

Selling, general and administrative expenses for the three months ended March 31, 2026 decreased by $332,057 or 11% to $2,591,647 as compared to $2,923,704 for the three months ended March 31, 2025. The decrease is primarily attributable to anet decrease in payroll of approximately $660,000 due to approximately $1 million in reduced payroll costs attributable to reduced headcount, offset by increases of approximately $233,000 in severance payments and $157,000 in bonuses to employees. This net decrease was offset by an increase in stock-based compensation expense of approximately $308,000 during the three months ended March 31, 2026, which primarily relates to board stock option grants.

Loss from fair value measurement of digital assets

Loss from fair value measurement of digital assets for the three months ended March 31, 2026 was $2,086,347 and relates to the change in fair value for the BNB units held as of March 31, 2026.

Loss from fair value measurement of investment in digital asset trust

Loss from fair value measurement of investment in digital asset trust for the three months ended March 31, 2026 was $2,548,799 and relates to the change in fair value for the OBNB Trust Units held as of March 31, 2026.

Research and Development

Research and development expenses decreased to $372,149 for the three months ended March 31, 2026 from $849,358 for the three months ended March 31, 2025, a decrease of $477,209 or 56%. This decrease is primarily due to a decrease of approximately $21,000, in laboratory supplies and service contracts, as well as decreases of $4,000 in depreciation expense and $46,000 for consulting expense, $75,000 for service contracts, and payroll expense of approximately $60,000. These decreases were the result of the Company down-sizing and changing its focus to a DAT company during October 2025.

Interest income

Interest income for the three months ended March 31, 2026 decreased $56,434 or 94% to $3,761 as compared to $60,195 in the three months ended March 31, 2025 due to lower interest rates and a lower balance period over period in our money market accounts.

Unrealized gain on change in fair value of warrants classified as a liability

Unrealized gain on change in fair value of warrants classified as a liability for the three months ended March 31, 2026 and 2025 was $0 and $ 68,430, respectively, which relates to the change in fair value of the warrants that are classified as a liability.

Other income (expense), net

Other income (expense), net for the three months ended March 31, 2026 and 2025, was income of $81,663 and expense of $3,095, respectively. The income of $81,663 for the three months ended March 31, 2026 relates to the sale of supplies and equipment when we moved to a smaller facility.

Loss from operations

Loss from operations increased by $3,373,039 or 100% for the three months ended March 31, 2026 to $6,750,583 compared to $3,377,544 for the three months ended March 31, 2025 due to the factors noted above.

Comparison of Results of Operations for the Six–Months Ended March 31, 2026 and 2025

Revenues

Product revenues

For the six months ended March 31, 2026 and 2025, we generated $1,562,996 and $1,044,485 in revenues from product sales, respectively. Product revenue increased by $518,511 or 50% for the six-months ended March 31, 2026 as compared to the six months ended March 31, 2025. The increase in product revenues was due to an increase of $906,302 in sales to a large-scale DNA manufacturing customer and the timing of related orders within our Therapeutic DNA Production Services segment. This increase was offset by a net decrease in our DNA Tagging and Security Products and Services segment of $387,791 year over year in cotton DNA tagging revenue.

Service revenues

For the six months ended March 31, 2026 and 2025, we generated $26,509 and $588,628 in revenues from sales of services, respectively. The decrease in service revenues of $562,119 or 95% for the six months ended March 31, 2026, as compared to the same period in the prior fiscal year is attributable to a decrease of $468,424 within our DNA Tagging and Security Products and Services segment due to a decrease in our textile isotopic testing services as we stopped providing these services during the prior fiscal year. This decrease was also attributable to a decrease of $93,695 within our Therapeutic DNA Production Services segment due to decreased research and development projects.

Cost and Expenses

Gross Profit

Gross profit for the six-months ended March 31, 2026, increased by $140,386 or 14% to $1,142,143 from $1,001,757 for the six-months ended March 31, 2025. The gross profit percentage was 72% and 61% for the six-months ended March 31, 2026 and 2025, respectively. The increase in gross profit percentage was primarily the result of decreased overhead and payroll costs included in costs of goods sold due to the reduction in headcount period over period. This coupled with the increased yield in manufacturing within our Therapeutic DNA Productions Services segment, resulted in the improved gross profit.

Selling, General and Administrative

Selling, general and administrative expenses for the six months ended March 31, 2026 increased by $10,447,176 or 190% to $15,940,157 as compared to $5,492,981 for the six months ended March 31, 2025. The increase is primarily attributable to an increase in consulting expense of $9,939,669. The increase in consulting expense relates to our Digital Asset Treasury segment. We issued warrants to our strategic consultants with a fair value of approximately $8,826,000 that was recorded to consultant expense for the six months ended March 31, 2026. We also incurred consulting expenses under these contracts of $1,113,669, which were entered into during the switch to a digital asset strategy. There was also an increase in stock-based compensation expense of approximately $913,000 during the six months ended March 31, 2026, which primarily relates to officer, board and employee grants. These increases were offset by a decrease of $245,000 related to isotopic testing within our textiles market.

Loss from fair value measurement of digital assets

Loss from fair value measurement of digital assets for the six months ended March 31, 2026 was $3,818,904 and relates to the change in fair value for the BNB units held as of March 31, 2026.

Loss from fair value measurement of investment in digital asset trust

Loss from fair value measurement of investment in digital asset trust for the six months ended March 31, 2026 was $6,032,808 and relates to the change in fair value for the OBNB Trust Units held as of March 31, 2026.

Research and Development

Research and development expenses decreased to $830,711 for the six months ended March 31, 2026 from $1,864,368 for the six months ended March 31, 2025, a decrease of $1,033,657 or 55%. This decrease is primarily due to a decrease of approximately $500,000 for the development of an enzyme for use in our Therapeutic DNA Production Services segment during the prior fiscal year period. Additional decreases include a decrease in payroll of $118,000, service contract of $106,000, rent of $40,000, and consulting of $55,000..

Interest income

Interest income for the six months ended March 31, 2026 decreased $115,590 or 90% to $12,904 as compared to $128,494 in the six months ended March 31, 2025 due to lower interest rates and lower balances in our money market accounts.

Unrealized gain on change in fair value of warrants classified as a liability

Unrealized gain on change in fair value of warrants classified as a liability for the six months ended March 31, 2026 and 2025 was $370 and $312,430, respectively, which relates to the change in fair value of the warrants that are classified as a liability.

Other income (expense), net

Other income (expense), net for the six months ended March 31, 2026 and 2025, was income of $174,249 and expense of $23,247, respectively. This increase is attributable to the sale of our textile library related to our former isotope business, as well as the sale of equipment during the six-months ended March 31, 2026.

Loss from operations

Loss from operations increased $19,333,426, or 326% to $25,271,341 for the six months ended March 31, 2026 compared to $5,937,915 for the six-months ended March 31, 2025 due to the factors noted above.

Liquidity and Capital Resources

Our liquidity needs consist of our working capital requirements and building our BNB Strategy. As of March 31, 2026, we had working capital of $1,205,101. For the six-months ended March 31, 2026, we used cash in operating activities of $7,594,751 consisting primarily of our loss of $25,271,341 net with non-cash adjustments of $68,991 in depreciation and amortization charges, $370 in unrealized gain on change in fair value of warrants classified as a liability, $3,818,904 in loss from fair value measurement of digital asset, $6,032,808 in loss from fair value measurement of investment in digital asset trust, $8,826,154 for warrants issued to consultants, $3,010 in digital assets earned, $21,573 for USDC earned for covered call options, and $968,064 in stock-based compensation expense. Additionally, we had a net increase in operating assets of $1,141,365 and a net decrease in operating liabilities of $872,109. At March 31, 2026, we had cash and cash equivalents of $949,091.

We have recurring net losses which have resulted in an accumulated deficit of $404,451,992 as of March 31, 2026. We incurred a net loss of $25,271,341 and generated negative operating cash flow of $7,594,751 for the six months ended March 31, 2026.

The Company’s current capital resources include cash and cash equivalents, and cryptocurrency assets. Historically, the Company has financed its operations principally from the sale of equity and equity-linked securities.

As discussed in Note G to the accompanying condensed consolidated financial statements, during October 2025, the Company closed the Private Placement of its common stock and/or pre-funded warrants, and Series E-1 Warrants, and Series E-2 Warrants. Upon the closing of the Private Placement, the Company received $26.8 million in gross proceeds. The Company also received proceeds from warrants exercised of approximately $732 thousand during the six months ended March 31, 2026 and is actively implementing its BNB strategy. Also, subsequent to March 31, 2026, the Company received net proceeds of approximately $854 thousand from sales of common stock on the ATM.

The Company estimates that it will have sufficient cash and cash equivalents, as well as liquid cryptocurrency to fund operations for the next twelve months from the date of filing this quarterly report. Our DAT is considered a longer-term investment and we do not believe we will need to sell our DAT within the next twelve months to meet our working capital requirements, although we may from time to time sell or engage in other transactions with respect to our DAT as part of our treasury management operations.

Critical Accounting Estimates and Policies

Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.

We believe that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

The accounting policies identified as critical are as follows:

• Revenue recognition;
• Digital assets; and
• Investment in digital asset trust.

Critical Accounting Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The most critical estimates include recoverability of long-lived assets, including the values assigned to intangible assets, fair value calculations for warrants, and contingencies. Management reviews its estimates on a regular basis and the effects of any material revisions are reflected in the consolidated financial statements in the period they are deemed necessary. Accordingly, actual results could differ from those estimates.

Revenue Recognition

We follow FASB issued accounting standard updates which clarify the principles for recognizing revenue arising from contracts with customers (“ASC 606” or “Topic 606”).

The Company measures revenue at the amounts that reflect the consideration to which it is expected to be entitled in exchange for transferring control of goods and services to customers. The Company recognizes revenue either at the point in time or over the period of time that performance obligations to customers are satisfied. The Company’s contracts with customers may include multiple performance obligations (e.g. DNA products, maintenance, authentication services, research and development services, etc.). For such arrangements, the Company allocates revenues to each performance obligation based on their relative standalone selling price.

Due to the short-term nature of the Company’s current contracts with customers, it has elected to apply the practical expedients under Topic 606 to: (1) expense as incurred, incremental costs of obtaining a contract and (2) not adjust the consideration for the effects of a significant financing component for contracts with an original expected duration of one year or less.

Product Revenues

The Company’s DNA product revenues are accounted for/recognized in accordance with contracts with customers. The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. The Company invoices customers upon shipment, and its collection terms range, on average, from 30 to 60 days.

Research and Development Services

The Company’s revenue from its research and development contracts are accounted for/recognized when the performance obligations per the contract are satisfied. These performance obligations are satisfied at the point in time, either when the Company’s services are complete, or when the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer, or when a report is released to a customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. The Company invoices customers upon shipment, or completion of the services and its collection terms range, on average, from 30 to 60 days.

Digital Assets

In December 2023, the FASB issued ASU 2023-08, Digital Assets, which provides guidance on the recognition, measurement, presentation, and disclosure of digital assets through the creation of ASC 350-60 – Intangibles – Goodwill and Other – Crypto Assets. ASU 2023-08 became effective for all entities for fiscal years beginning after December 15, 2024. The Company accounts for its digital assets, including BNB tokens, in accordance with ASC 350 – Intangibles – Goodwill and Other. The Company has determined its digital assets meet the scoping criteria of ASC 350-60, which requires eligible crypto assets to be measured at fair value, with changes in fair value recognized in net income. Fair value is determined in accordance with ASC 820 – Fair Value Measurement, using quoted prices in active markets. The Company has designated a principal market based on the market that the Company has access to and has the greatest volume and level of activity of BNB for determining the fair value of BNB tokens.

The Company deposits certain digital assets with a third-party exchange to facilitate trading activities. Assets held on this exchange are maintained in accounts under the Company’s exclusive control. The activity from remeasurement of digital assets at fair value is reflected in the condensed consolidated statements of operations within gain/loss from fair value measurement of digital assets. Realized gains and losses from the derecognition of digital assets would be included in the realized gain/loss on digital assets in the condensed consolidated statements of operations. Although the Company has not disposed of any digital assets during the reporting period, in the event there are disposals in the future, the Company will use the specific identification method to calculate the realized gains/losses on digital assets.

Sales and purchases of digital assets are reflected as cash flows from investing activities in the condensed consolidated statements of cash flows. Digital assets purchased using USDC are reflected as non-cash investing activities in the condensed consolidated statements of cash flows.

Investment in Digital Asset Trust

The Company currently holds units of OBNB Osprey BNB Chain Trust (the “OBNB Trust Units”), as detailed more in Note G. The OBNB Trust Units are publicly traded and have readily determinable fair value as defined in ASC 321-10-20. Accordingly, the Company measures the OBNB Trust Units at fair value with changes in fair value recognized in earning in the period of change.

Off-Balance Sheet Arrangements

None.

Inflation

The effect of inflation on our revenue and operating results was not significant.

Information requested by this Item is not applicable as we are electing scaled disclosure requirements available to smaller reporting companies with respect to this Item.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we conducted an evaluation, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are those controls and procedures designed to provide reasonable assurance that the information required to be disclosed in our Exchange Act filings is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, our disclosure controls and procedures were effective and the material weakness in our internal control over financial reporting as of September 30, 2025 has been remediated.

Remediation of Previously Identified Material Weakness

To remediate the material weakness identified during fiscal year ended September 30, 2025, we implemented controls to ensure that all inputs in our fair value calculations agree to the underlying documents and are properly reviewed. The applicable controls have been operating for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.

Changes in Internal Control over Financial Reporting

Other than as discussed above under “Remediation of Previously Identified Material Weakness,” there were no other changes in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In addition to the risk factors noted below and other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K of the Company filed with the SEC on December 22, 2025, and as updated and supplemented in subsequent filings. These risk factors could materially harm our business, operating results and financial condition. Additional factors and uncertainties not currently known to us or that we currently consider immaterial also may materially adversely affect our business, financial condition or future results.

We are not currently in compliance with the Nasdaq continued listing requirements. If we are unable to regain compliance with Nasdaq’s listing requirements, our securities will be delisted, which would negatively impact our common stock’s market price and liquidity and reduce our ability to raise capital.

On March 20, 2026 we received a written notice from Nasdaq notifying us that we no longer satisfy the $1.00 bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on Nasdaq (the “Notification Letter”). Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of thirty (30) consecutive business days (collectively, the “Minimum Bid Price Requirement”). Based on the closing bid price of our common stock for the thirty (30) consecutive business days from February 5, 2026 to March 19, 2026, we no longer satisfy the Bid Price Rule.

The Notification Letter further indicated that, pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv), we are not eligible for a compliance period under Nasdaq Listing Rule 5810(c)(3)(A) due to the fact that we have effected a reverse stock split over the prior one-year period or have effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one ( the “Nasdaq’s Reverse Split Rule”). Accordingly, we were informed that our securities would be subject to delisting from Nasdaq unless we timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”). We requested a hearing and were heard before the Panel on April 30, 2026.

There can be no assurance that the Panel will grant us our request for continued listing or that we will be able to regain compliance and thereafter maintain our listing on Nasdaq. If the Panel does not grant us our request for continued listing and we are unable to regain compliance with Nasdaq’s listing requirements including the Minimum Bid Price Requirement, we will be subject to delisting, which would have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.

We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq. In particular:

• we may be unable to raise equity capital on acceptable terms or at all;
• we may lose the confidence of our customers, which would jeopardize our ability to continue our business as currently conducted;
• the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws;
• holders may be unable to sell or purchase our securities when they wish to do so;
• we may become subject to stockholder litigation;
• we may lose the interest of institutional investors in our common stock;
• we may lose media and analyst coverage;
• our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary market for our common stock; and
• we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all.

Certain Risks and Potential Disadvantages Associated with a Reverse Stock Split

We cannot assure you that the proposed Reverse Stock Split will increase the price of our common stock.

At our special meeting of stockholders held on April 28, 2026 (the “Special Meeting”), our stockholders granted our Board of Directors discretionary authority for 12 months to amend our Certificate of Incorporation to effect a reverse stock split of our outstanding and treasury shares of common stock, at a ratio in the range from one-for-five to one-for-thirty, with such specific ratio to be determined by the Board of Directors following the Special Meeting, while leaving the number of authorized shares of common stock unchanged (the “Reverse Stock Split ”)

There are risks associated with the potential Reverse Stock Split, including that the Reverse Stock Split may not result in an increase in the per share price of our common stock. We cannot predict whether the Reverse Stock Split, if effected, will increase the market price of our common stock. The history of similar stock split combinations for us and companies in like circumstances is varied. There is no assurance that:

• the market price per share of our common stock after the Reverse Stock Split will rise in proportion to the reduction in the number of shares of our common stock outstanding before the Reverse Stock Split;
• the Reverse Stock Split will result in a per share price that will attract brokers and investors who do not trade in lower priced stocks;
• the Reverse Stock Split will result in a per share price that will increase our ability to attract and retain employees;
• the market price per share will either exceed or remain in excess of $1.00, the Minimum Bid Price Requirement by Nasdaq for continued listing; or
• We would otherwise meet the Nasdaq listing requirements even if the per share market price of our common stock after the Reverse Stock Split meets the Minimum Bid Price Requirement.

The market price of our common stock will also be based on our performance and other factors, some of which are unrelated to the number of shares outstanding. If the Reverse Stock Split is effected and the market price of our common stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of a Reverse Stock Split. Furthermore, the liquidity of our common stock could be adversely affected by the reduced number of shares that would be outstanding after the Reverse Stock Split.

The proposed Reverse Stock Split may decrease the liquidity of our common stock and result in higher transaction costs.

If effected, the Reverse Stock Split may decrease the liquidity of our common stock because fewer shares would be outstanding after the Reverse Stock Split. The Reverse Stock Split could result in some stockholders owning “odd-lots” of less than 100 shares of common stock. Brokerage commissions and other costs of transactions in odd-lots are generally higher than the costs of transactions in “round-lots” of even multiples of 100 shares.

We will remain subject to Nasdaq’s Reverse Split Rule until at least March 14, 2027 and if the Reverse Stock Split is implemented we will remain subject to Nasdaq’s Reverse Split Rule for at least one year after the effectiveness of the Reverse Stock Split.

We effected a one-for-fifty reverse stock split on March 14, 2025 and a one-for-fifteen reverse stock split on June 2, 2025. Accordingly, based on our prior reverse stock splits we are and will remain subject to Nasdaq’s Reverse Split Rule until at least March 14, 2027. Should our Board of Directors effect the Reverse Stock Split, we would be subject to Nasdaq’s Reverse Split Rule for at least one year after the effectiveness of the Reverse Stock Split.

If the Reverse Stock Split is effected, the resulting per-share market price may not attract institutional investors or investment funds and may not satisfy the investing guidelines of such investors and, consequently, the trading liquidity of our common stock may not improve.

While our Board of Directors believes that a higher stock price may help generate investor interest, there can be no assurance that the Reverse Stock Split, if effected, will result in a per-share market price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our common stock may not necessarily improve if the Reverse Stock Split is effected.

A decline in the market price of our common stock after the Reverse Stock Split, if effected, may result in a greater percentage decline than would occur in the absence of the Reverse Stock Split.

If the Reverse Stock Split is effected and the market price of our common stock declines, the percentage decline may be greater than would occur in the absence of the Reverse Stock Split. The market price of our common stock will, however, also be based upon our performance and other factors, which are unrelated to the number of shares of common stock outstanding.

Stockholders May Suffer Substantial Dilution if the Reverse Stock Split is Effected

If the Reverse Stock Split is effected, stockholders may suffer substantial dilution as a result of certain provisions contained in the May 2024 Series A Warrants (as defined below).

On May 29, 2024, we closed on a public offering for the issuance and sale of units (the “Units”), with each Unit consisting of either (A) one share of the Company’s Common Stock, and one Series A warrant (the “ May 2024 Series A Warrant”) to purchase one share of Common Stock and one Series B warrant, or (B) one pre-funded warrant to purchase one share of Common Stock and one May 2024 Series A Warrant and one Series B warrant.

The May 2024 Series A Warrants contain a price reset provision that is triggered upon a reverse stock split of our common stock. Upon such an event, the exercise price of the May 2024 Series A Warrants will reset to the lesser of (i) the then-current exercise price or (ii) the lowest volume weighted average price (VWAP) during the period commencing five trading days immediately preceding, and ending five trading days following, the effective date of any reverse stock split. The number of shares underlying the May 2024 Series A Warrants will be proportionately adjusted accordingly.

As a result, if the Reverse Stock Split is effected, the reset of the exercise price and the corresponding increase in the number of shares issuable upon exercise of the May 2024 Series A Warrants could result in substantial dilution to our existing stockholders.