BNB Plus Corp.: Form 10-Q for the period ended Jun 30, 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”, “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 business strategy and the timing of our expansion plans, including our BNB Strategy;
• failure to realize the anticipated benefits of the proposed digital asset treasury strategy;
• risks related to the Company’s ability to raise and deploy capital effectively;
• risks relating 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 related to our Common Stock listing on the OTCQB;
• risks relating to the treatment of crypto assets for U.S. and foreign tax purposes; and
• risks related to the unknown returns that the Company’s BNB treasury strategy 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:

• the highly volatile nature of the price of BNB and other cryptocurrencies;
• the risks relating to the Company’s operations and business;
• changes in 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; and
• our ability to obtain the necessary financing to fund our operations and effect our strategic development plan.

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 our subsidiary LineaRx Inc. (“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 deoxyribonucleic acid (“DNA”) and ribonucleic acid (“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.

Recent Developments

Cypress Settlement Agreement

On July 23, 2026, the Company and the Cypress Parties entered into the Cypress Settlement Agreement pursuant to which the Company and the Cypress Parties mutually agreed to terminate, effective as of the Termination Date, the Digital Services Agreement, the SA Agreement, and a Consulting Agreement between us and Mr. Horsman dated October 1, 2025 and the Company is transitioning execution of the Company’s BNB treasury strategy fully in-house.

Pursuant to the Cypress Settlement Agreement the Company agreed to (i) pay the Cypress Parties an aggregate sum of $1,000,000 consisting of an initial payment of $500,000 on the Termination Date with the remaining $500,000 to be made in twelve equal monthly installments commencing on the first business day following the Termination Date, and (ii) issue to the Cypress Parties, an aggregate of

200,000 shares of Series B-1 Preferred in twelve equal monthly installments beginning on the first month anniversary of the Termination Date. Except for certain instances of non-compliance with the Cypress Settlement Agreement by the Cypress Parties, the Company agreed that any default of its payment obligations under the Cypress Settlement Agreement will incur a default fee to the Cypress Parties in the aggregate of $1,250,000 reduced by the aggregate amount of all Cash Installment Payments previously paid by the Company prior to the date of such default.

In connection with the Cypress Settlement Agreement Mr. Kruger notified the Company of his resignation as Chairman and as a director of the Company, effective July 31, 2026, and Mr. Horsman ceased to serve as the Company’s Chief Investment Officer effective as of the Termination Date.

The Cypress Parties also agreed, among other things, that until September 29, 2030, they will not, directly or indirectly: (i) solicit proxies or written consents of stockholders, or participate in any solicitation of any proxy, consent or other authority to vote the Company’s securities; (ii) present proposals for consideration for action by stockholders at any annual or special meeting of the Company; (iii) submit, encourage or otherwise solicit stockholders of the Company or induce or attempt to induce any other person to initiate stockholder proposals; (iv) seek to remove any member of the Board, propose any nominee for election to the Board, or seek representation on the Board; (v) grant any proxy, consent or other authority to vote with respect to any matters at any annual or special meeting of the Company other than to the named proxies included in the Company’s proxy card; (vi) deposit any securities in a voting trust or subject them to a voting agreement; (vii) own, purchase or acquire any additional shares of the Company’s common stock, right to vote or direct the voting of the Company’s common stock, or any securities convertible into the Company’s common stock.

In addition, the Cypress Parties agreed to the (i) recission of 695,322 Series E-1 warrants to purchase shares of the Company’s common stock previously issued to the Cypress Strategic Advisor pursuant to the SA Agreement (the “Rescinded Warrants”), and (ii) modification of 1,291,312 Series E-1 warrants previously issued to the Cypress Strategic Advisor remaining after giving effect to the Rescinded Warrants (the “Modified Warrants”), to replace Section 3(d) of the Modified Warrants with a complete waiver of any rights the holder thereof may have in law, equity or otherwise, related to the effect on the Modified Warrants of fundamental transactions of the Company.

Resignation of Chairman of the Board of Directors and Chief Investment Officer

In connection with the Cypress Settlement Agreement Mr. Kruger notified us of his resignation as Chairman and as a director of the Company, effective July 31, 2026, and Mr. Horsman ceased to serve as our Chief Investment Officer effective as of the Termination Date.

May 2026 Private Placement

We completed the SPA Private Placement on May 28, 2026 and July 20, 2026, and completed the Inducement Private Placement on June 30, 2026. In connection with the SPA Private Placement, we entered into the Securities Purchase Agreement and joinders to the Securities Purchase Agreement with three Selling Stockholders, pursuant to which we sold and issued to the Selling Stockholders, at an offering price of $1.05 per share, 2,380,953 shares of Series B-1 Preferred, each of which is convertible into one share of Common Stock, subject to applicable beneficial ownership limitations, and Series F Warrants to purchase 2,380,953 shares of Common Stock at an exercise price of $0.76 per share. The Series B-1 Preferred carries a liquidation preference of 1.5x the original issue price of $1.05 per share and accrues cumulative dividends at a rate of 8% per annum. Gross proceeds from the SPA Private Placement totaled $2.5 million.

Concurrently with the SPA Private Placement, and within the offering period contemplated by the Securities Purchase Agreement and Inducement Agreements, we entered into Warrant Inducement and Exchange Agreements (the "Inducement Agreements") with five Selling Stockholders that participated in our private placements that closed in October 2025 (the “October 2025 Private Placement”). Pursuant to the Inducement Agreements, the Selling Stockholders agreed to: (i) exercise 461,318 Series E Common Stock Purchase Warrants (the "Series E Warrants") issued in the October 2025 Private Placement for cash at an exercise price of $3.82, resulting in the issuance of 461,318 shares of Common Stock and aggregate cash proceeds to us of approximately $1.76 million; and (ii) exchange 2,548,575 Pre-Funded Warrants issued in the October 2025 Private Placement and 1,461,323 shares of Common Stock for an aggregate of 1,511,366 shares of Series B-1 Preferred, 1,706,278 shares of Series B-2 Preferred and 2,303,620 Series B-2 Pre-Funded Warrants, each exercisable for one share of Series B-2 Preferred at an exercise price of $0.0001 per share. The Series B-2 Preferred carries a liquidation preference of 1.0x the original issue price of $0.38 per share and accrues cumulative dividends at a rate of 6% per annum. Each share of Series B-2 Preferred is convertible into one share of Common Stock, subject to applicable beneficial ownership limitations. No additional cash consideration was paid or received by us in connection with the exchange transactions described in clause (ii) above. Following the consummation of the transactions contemplated by the Inducement Agreements, an aggregate of 7,603,358 Series E Warrants and 1,519,726 Pre-Funded Warrants issued in the October 2025 Private Placement remain issued and outstanding. Gross proceeds from the closing of the Inducement Private Placement totaled $1.76 million.

Upon the closing of May 2026 Private Placement, we received $4.26 million in aggregate gross proceeds, with the potential for up to an additional $1.81 million in gross proceeds should the Series F Warrants be exercised before their expiration.

The Series B-2 Pre-Funded Warrants are immediately exercisable and may be exercised at any time until all of the Series B-2 Pre-Funded Warrants issued in the Inducement Private Placement are exercised in full. The Series F Warrants are immediately exercisable for cash for a period of three years from the date of issuance and may also be exercised on a cashless basis at any time beginning six months after their initial issuance if, at the time of exercise, there is no effective registration statement registering, or the prospectus contained therein is not available for, the resale of the underlying shares of Common Stock by the holder thereof

Nasdaq Delisting and listing on OTCQB Venture Market

On July 10, 2026, we received a delisting determination from the Hearing Panel of the Nasdaq Stock Market LLC (“Nasdaq”) as a result of our non-compliance with the minimum $1.00 bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market (the “Delisting Determination”).

In accordance with Nasdaq Listing Rule 5820, we requested that the Nasdaq Listing and Hearing Review Council (the “Listing Council”) review the Delisting Determination in light of our recently closed financing and further developments in connection with our ongoing strategic review process (the “Listing Council Review”). If the Listing Council elects to review the matter, it may affirm, modify, reverse, or remand the Hear Panel’s decision. The request for Listing Council Review did not stay the Delisting Determination, and trading of our Common Stock on Nasdaq was suspended at the open of trading on July 14, 2026.

There can be no assurance that the Listing Council will grant our request for the Listing Council Review, or that the Listing Council Review will result in our Common Stock resuming to be traded on the Nasdaq Capital Market. In connection with the Hearing Panel’s decision, Nasdaq will file a Form 25 with the SEC in accordance with Nasdaq Listing Rule 5830 and Rule 12d2-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after applicable appeal periods have lapsed.

As a result of the suspension in trading and delisting, we applied for our Common Stock to trade on the OTCQB Venture Market, an over-the-counter market operated by OTC Markets Group, under our existing symbol “BNBX.” Our Common Stock began trading on the OTCQB Venture at the open of trading on July 14, 2026.

BNB Strategy

We launched our DAT strategy in October 2025 with the closing of a 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”).

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, we currently hold units of OBNB Osprey BNB Chain Trust (OTCMKTS: OBNB) (the “Trust Units”). We plan to pursue opportunities to sell the Trust Units for cash to purchase additional BNB that will be used to further our BNB Strategy. Alternatively, we may seek to access 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 our BNB Strategy. Please see more about the Trust Units in the “OBNB Trust Units” section below.

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 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 June 30, 2026 and 2025

Revenues

Product revenues

For the three-months ended June 30, 2026 and 2025, we generated $585,551 and $195,262 in revenues from product sales, respectively. Product revenue increased by $390,289 or 200% for the three-months ended June 30, 2026 as compared to the three-months ended June 30, 2025. The increase in product revenues was due to an increase of $416,303 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 approximately $26,000.

Service Revenues

For the three-months ended June 30, 2026 and 2025, we generated $19,755 and $109,131 in revenues from sales of services, respectively. The decrease in service revenues of $89,376 or 82% for the three-months ended June 30, 2026, as compared to the same period in the prior fiscal year is attributable to a decrease of $43,423 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 $45,972 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 June 30, 2026, increased by $441,992 or 8,616% to $447,122 from $5,130 for the three months ended June 30, 2025. The gross profit percentage was 74% and 2% for the three-months ended June 30, 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 higher product revenue and 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 June 30, 2026 decreased by $790,661 or 27% to $2,139,966 as compared to $2,930,627 for the three months ended June 30, 2025. The decrease is primarily attributable to a net decrease in payroll of approximately $1,135,000 due to reduced headcount and severance payments to our former CEO. Additional decreases of $247,000 relate to reduced legal fees associated with a change in SEC counsel, $54,000 in rent expense associated with our lease termination in January 2026, $35,000 in investor relations and $28,000 in computer expense. This net decrease was offset by an increase in consulting expense of $559,000 relating to our digital asset strategy as well as stock-based compensation expense of approximately $202,000 during the three months ended June 30, 2026, which primarily relates to board and employee stock option grants.

Loss from fair value measurement of digital assets

Loss from fair value measurement of digital assets for the three months ended June 30, 2026 was $502,687 and relates to the change in fair value for the BNB units held as of June 30, 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 June 30, 2026 was $875,632 and relates to the change in fair value for the OBNB Trust Units held as of June 30, 2026.

Research and Development

Research and development expenses decreased to $209,830 for the three months ended June 30, 2026 from $768,563 for the three months ended June 30, 2025, a decrease of $558,733 or 73%. This decrease is the result of the Company down-sizing and changing its focus to a DAT company during October 2025. This change resulted in a decrease of approximately $63,000 in laboratory supplies, as well as decreases of $88,000 in depreciation expense, $155,000 for service contracts, rent expense of $72,000 and payroll expense of approximately $96,000.

Interest income

Interest income for the three months ended June 30, 2026, decreased $39,474 or 98% to $793 as compared to $40,267 in the three months ended June 30, 2025, due to lower interest rates and a lower balance period over period in our money market accounts.

Warrant inducement expense

Warrant inducement expense for the three months ended June 30, 2026 of $1,439,652 relates to the excess fair value of the Convertible Preferred Stock granted in the Inducement Agreement compared to the fair value of the equity instruments transferred by the Selling Stockholders (see Note G of the accompanying condensed consolidated financial statements).

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 June 30, 2026, and 2025 was $0 and $ 6,410, 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 June 30, 2026, and 2025, was $0 and expense of $531, respectively.

Loss from operations

Loss from operations decreased by $407,986 or 11% for the three months ended June 30, 2026 to $3,239,928 compared to $3,647,914 for the three months ended June 30, 2025, due to the factors noted above.

Comparison of Results of Operations for the Nine–Months Ended June 30, 2026 and 2025

Revenues

Product revenues

For the nine-months ended June 30, 2026 and 2025, we generated $2,148,547 and $1,239,747 in revenues from product sales, respectively. Product revenue increased by $908,800 or 73% for the nine-months ended June 30, 2026 as compared to the nine-months ended June 30, 2025. The increase in product revenues was due to an increase of approximately $1,335,110 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 approximately $426,291 related to year over year taggant provided for cotton tagging.

Service revenues

For the nine-months ended June 30, 2026 and 2025, we generated $46,264 and $697,759 in revenues from sales of services, respectively. The decrease in service revenues of $651,495 or 93% for the nine-months ended June 30, 2026, as compared to the same period in the prior fiscal year is attributable to a decrease of approximately $500,000 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 $151,952 within our Therapeutic DNA Production Services segment due to decreased research and development projects.

Cost and Expenses

Gross Profit

Gross profit for the nine-months ended June 30, 2026, increased by $582,378 or 58% to $1,589,265 from $1,006,887 for the nine-months ended June 30, 2025. The gross profit percentage was 72% and 52% for the nine-months ended June 30, 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 product revenue and improved 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 nine months ended June 30, 2026 increased by $9,656,521 or 115% to $18,080,123 as compared to $8,423,602 for the nine months ended June 30, 2025. The increase is primarily attributable to an increase in consulting expense of $10,499,144. 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 nine months ended June 30, 2026. We also incurred consulting expenses under these contracts of $1,673,000, which were entered into during the switch to a digital asset strategy. There was also an increase in stock-based compensation expense of approximately $1,115,000 during the nine months ended June 30, 2026, which primarily relates to officer, board and employee grants. These increases were offset by a decreases of $1,137,000 in payroll related to headcount reductions and accrued severance, as well as a decrease of approximately $345,000 relating to reduced legal expenses related to patents, and special shareholder meetings during fiscal 2025.

Loss from fair value measurement of digital assets

Loss from fair value measurement of digital assets for the nine months ended June 30, 2026 was $4,321,951 and relates to the change in fair value for the BNB units held as of June 30, 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 nine months ended June 30, 2026 was $6,908,440 and relates to the change in fair value for the OBNB Trust Units held as of June 30, 2026.

Research and Development

Research and development expenses decreased to $1,040,541 for the nine months ended June 30, 2026 from $2,632,931 for the nine months ended June 30, 2025, a decrease of $1,592,390 or 60%. This decrease is primarily due to a decrease of approximately $650,000 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 $214,000, service contracts of $259,000, rent of $112,000, and consulting of $129,000. 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 nine months ended June 30, 2026 decreased $155,065 or 92% to $13,697 as compared to $168,762 in the nine months ended June 30, 2025 due to lower interest rates and lower balances in our money market accounts.

Warrant inducement expense

Warrant inducement expense for the nine months ended June 30, 2026 of $1,439,652 relates to the excess fair value of the Convertible Preferred Stock granted in the Inducement Agreement compared to the fair value of the equity instruments transferred by the Selling Stockholders (see Note G of the accompanying condensed consolidated financial statements).

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 nine months ended June 30, 2026 and 2025 was $370 and $318,840, 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 nine months ended June 30, 2026 and 2025, was income of $174,249 and expense of $23,778, 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 nine-months ended June 30, 2026.

Loss from operations

Loss from operations increased $18,925,807, or 197% to $28,511,629 for the nine months ended June 30, 2026 compared to $9,585,822 for the nine-months ended June 30, 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 June 30, 2026, we had working capital of $4,510,283 For the nine-months ended June 30, 2026, we used cash in operating activities of $8,577,673 consisting primarily of our loss of $29,950,919 net with non-cash adjustments of $98,510 in depreciation and amortization charges, $370 in unrealized gain on change in fair value of warrants classified as a liability, $4,321,591 in loss from fair value measurement of digital asset, $6,908,440 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, $61,845 for USDC earned for covered call options, and $1,195,141 in stock-based compensation expense. Additionally, we had a net decrease in operating assets of $1,062,917 and a net decrease in operating liabilities of $1,347,704. At June 30, 2026, we had cash and cash equivalents of $3,761,482.

The Company has recurring net losses, which have resulted in an accumulated deficit of $409,182,241 as of June 30, 2026. The Company incurred a net loss of $29,950,919 and incurred negative operating cash flow of $8,577,673 for the nine months ended June 30, 2026.

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

As discussed in Note G, during October 2025, the Company closed the October 2025 Private Placement of its common stock and/or pre-funded warrants, Series E-1 Warrants, and Series E-2 Warrants. Upon the closing of the October 2025 Private Placement, the Company received $24.9 million in net proceeds after deducting placement agent fees and offering costs (consisting of $7.6 million in cash, net of offering costs, $5.9 million in USDC and $11.4 million in OBNB Trust Units).

During May and June 2026, the Company closed the May 2026 Private Placement of its Series B-1 and Series B-2 Preferred Stock, Series B-2 Prefunded warrants, and Series F Warrants. Upon closing the May 2026 Private Placement, the Company received $4.26 million in net proceeds after deducting offering costs. Subsequent to the quarter ended June 30, 2026, the Company closed on an additional $200 thousand net proceeds under the May 2026 Private Placement.

During the nine months ended June 30, 2026, the Company received proceeds from warrants exercised of approximately $732 thousand and $885 thousand from sales of common stock on the ATM (as discussed in Note G).

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 these financial statements. 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 digital asset treasury as part of our treasury management operations.

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.

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;
• Investment in digital asset trust;
• Preferred stock; and
• Warrants classified as a liability.

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 the fair value of preferred stock upon issuance and the fair value of the warrants recorded as liabilities, the 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.

Preferred Stock

The Company classifies preferred stock as temporary equity when the underlying redemption features are not solely within the Company's control, in accordance with ASC 480-10-S99-3A. Preferred stock classified as temporary equity is initially recorded at fair value, net of issuance costs, and is subsequently remeasured to its redemption amount only if redemption becomes probable or the instrument is currently redeemable.

Warrants Classified as a Liability

The Company evaluates its warrants in accordance with ASC 480 “Distinguishing Liabilities from Equity” and ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity” and concluded that due to the terms of its Series B-2 Pre-Funded Warrants they should be classified as a liability, as such, they were recorded as a liability on the condensed consolidated balance sheet and measured at fair value at inception and at each reporting date in accordance with ASC 820, “Fair Value Measurement”, with changes in fair value recognized in the consolidated statement of operations 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 June 30, 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.

The Series B-1 Preferred and Series B-2 Preferred carry liquidation preferences and dividend obligations that rank senior to our Common Stock and could adversely affect holders of our Common Stock

We have issued Series B-1 Preferred with a liquidation preference of $1.05 per share and an 8% cumulative annual dividend, and Series B-2 Preferred with a liquidation preference of $0.38 per share and a 6% cumulative annual dividend. In the event of any liquidation, dissolution, or winding up of the Company, holders of Series B-1 and Series B-2 Preferred will be entitled to receive their respective liquidation preferences before any distribution is made to holders of Common Stock. The cumulative dividend obligations on the Series B-1 and Series B-2 Preferred will accrue regardless of whether we have funds legally available to pay them or whether our board of directors declares such dividends. To the extent dividends accrue and are unpaid, they will increase the effective liquidation preference owed to preferred holders. There can be no assurance that we will have sufficient assets to satisfy the liquidation preferences of the Series B-1 and Series B-2 Preferred in a liquidation event, and holders of Common Stock may receive little or nothing in such an event. The existence of these senior securities may also make it more difficult for us to raise additional equity capital on favorable terms in the future.

Our obligations under the Digital Asset Treasury Subsidiaries Guaranty (the "DATS Guaranty") in favor of the Guaranteed Parties could result in significant financial obligations and restrict our operational flexibility.

In connection with the May 2026 Private Placement, certain of our current and if applicable future subsidiaries, as defined in the DATS Guaranty the (“DATS Subsidiaries”), agreed to enter into the DATS Guaranty in favor of, at any time, all persons who are, at such time, registered holders of shares of the Preferred Stock or Prefunded Warrants on the books and records of the Company or its transfer agent, as applicable, and their respective permitted successors, assigns, and transferees who become registered holders of Preferred Stock (the “Guaranteed Parties”). Pursuant to the DATS Guaranty, each DAT Subsidiary has agreed to guarantee (a) all cash-payment obligations of the Company to the Guaranteed Parties under the Certificate of Designations of the Preferred Stock (the “Certificate of Designations”), the Securities Purchase Agreement, the Inducement Agreement and the other transaction documents in respect of the Preferred Stock or otherwise, whether now existing or hereafter arising, including, without limitation: (i) all accrued and unpaid dividends (whether or not declared), including but not limited to compounded dividends, with respect to the Preferred Stock, as and when payable under the Certificate of Designations; (ii) cash due upon a holder’s redemption of Preferred Stock, if any, (iii) the Liquidation Preference, (as defined in the Certificate of Designations), payable with respect to the Preferred Stock upon a liquidation event (as defined in the Certificate of Designations); and (iv) any other monetary amount payable by the Company to any Guaranteed Party pursuant to the Certificate of Designations or the Securities Purchase Agreement or any other transaction document related to the May 2026 Private Placement; and (b) to the extent legally enforceable as a guaranty under applicable law, the economic damages suffered by any Guaranteed Party as a result of the Company’s failure to honor any right of exercise or conversion (or right associated therewith) of such Guaranteed Party under the Certificate of Designations, the Inducement Agreement, the Series F Warrants, or Prefunded Warrants that is not susceptible to cash performance by Guarantor, in each case measured by the fair market value, on the date of the Company’s failure, of the property the Company was required to deliver and failed to deliver.

Pursuant to the DATS Guaranty, each Guaranteed Party agrees to the appointment KGPLA Holdings LLC (the “Lead Investor”), as their representative for the purposes of the following:

(i) distributing notices to the guarantors, including the DAT Subsidiaries. on behalf of the Guaranteed Parties;

(ii) delegating (in its reasonable discretion) all or any portion of the obligations and benefits of Lead Investor;

(iii) enforcing the DATS Guaranty against any or all guarantors subject to approval by Guaranteed Parties holding more than 50% of the aggregate Liquidation Preference of the then-outstanding shares of Series B-1 Preferred Stock (the “Majority-in-Interest”);

(iv) holding any security interest, lien, pledge, account control, or other collateral package granted by any guarantor under or in connection with the agreement for the ratable benefit of all Guaranteed Parties, and administering any enforcement or release of such collateral at the direction of the Majority-in-Interest; and

(v) acting as the sole party with standing and authority to bring any enforcement action, suit, or proceeding with respect to the agreement.

No individual Guaranteed Party has independent standing to sue any guarantor under the DATS Guaranty, but shall rely upon the Lead Investor for enforcement in accordance with the DATS Guaranty. Upon an Event of Default, as defined in the DATS Guaranty, the Lead Investor, at the direction of the Majority-in-Interest may declare all guaranteed obligations to be immediately due and payable.

The DATS Guaranty obligates us to ensure that our DAT Subsidiaries operate in accordance with the Digital Asset Treasury Procedures and imposes financial and operational restrictions on how we manage and deploy the digital assets and cash held by those subsidiaries. In the event our DAT Subsidiaries fail to meet their obligations, or we fail to comply with the terms of the DATS Guaranty, we could be required to make payments or take other remedial actions that could materially and adversely affect our financial condition, liquidity, and results of operations. There can be no assurance that we will be able to satisfy our obligations under the DATS Guaranty if they are triggered.

KGPLA Holdings LLC, as Lead Investor, has significant control rights over our Digital Asset Treasury operations that may limit our ability to manage our business and digital assets independently.

Pursuant to the terms of the May 2026 Private Placement, KGPLA Holdings LLC, as Lead Investor, holds significant contractual control rights over our digital asset treasury strategy through its rights under the DATS Guaranty and related transaction documents. These rights include oversight over the Digital Asset Treasury Procedures governing how our DAT Subsidiaries acquire, hold, and deploy digital assets, including BNB. The Lead Investor's control rights may limit our board of directors' and management's ability to independently make decisions regarding our digital asset strategy, the deployment of treasury assets, and related operational matters. This concentration of contractual influence in a single investor could result in decisions that are not in the best interests of all stockholders and could make it more difficult for us to pursue alternative strategic directions or respond quickly to changing market conditions. In addition, any disputes with the Lead Investor regarding the exercise of these rights could result in litigation or other proceedings that could be costly and disruptive to our business.

We are obligated to contribute digital assets and excess cash to our DAT Subsidiaries, which could limit our liquidity and our ability to respond to unanticipated cash needs.

Under the terms of the May 2026 Private Placement, we are obligated to contribute digital assets and excess cash (as defined in the transaction documents) to our DAT Subsidiaries for deployment in accordance with our BNB Strategy. This obligation reduces the amount of liquid assets available to the parent company for general corporate purposes, working capital, and unanticipated expenses. Digital assets, including BNB, are highly volatile and their value may decline significantly after contribution to the DAT Subsidiaries, reducing the effective value of our treasury assets. Furthermore, once contributed to the DAT Subsidiaries, the deployment of such assets will be subject to the Digital Asset Treasury Procedures and the oversight rights of the Lead Investor, limiting our ability to redeploy those assets for other corporate purposes even in the event of a liquidity shortfall at the parent company level. This structural separation of assets between the parent company and the DAT Subsidiaries could impair our ability to meet our obligations as they come due and could adversely affect the holders of our Common Stock.

If we are unable to raise sufficient additional capital on acceptable terms, we may be unable to expand our BNB reserves, which could adversely affect our liquidity, financial condition and growth prospects.

We completed the SPA Private Placement on May 28, 2026 and July 20, 2026 and the Inducement Private Placement on June 30, 2026, whereby we agreed to use the proceeds received from the private placements in excess of the General Proceeds solely for contributions to Build & Build, LLC, a Delaware limited liability company, and BNBX Ltd., a British Virgin Islands business company, each a 100% owned subsidiary of the Company, and such other wholly-owned subsidiary or subsidiaries of the Company as may from time to time hold Digital Assets, as defined in the Securities Purchase Agreement, or may become additional guarantors pursuant to the DATS Guaranty. The Company has agreed to promptly, but no later than forty-five (45) days following the Initial Closing of the Securities Purchase Agreement, contribute or cause to be contributed, any cash (except for the General Proceeds, certain cash and accounts receivable of the Company, and operating cash flows attributable to the Company’s LineaRx business) and Digital Assets owned or held by the Company or any of its subsidiaries that are not DAT Subsidiaries to a DAT Subsidiary that is a guarantor party to the DATS Guaranty, and that such cash and Digital Assets shall be held solely in a DAT Subsidiary. The Company has also agreed that any Digital Assets acquired by the Company or any of its subsidiaries that are not DAT Subsidiaries, will be contributed to a DAT Subsidiary that is a guarantor party to the DATS Guaranty on or immediately following the date of acquisition. To the extent holders exercise the warrants sold pursuant to the May 2026 Private Placement, we may acquire additional BNB at market prices, which could magnify our exposure to BNB price volatility. If we are unable to raise sufficient additional capital through warrant exercises, an at-the-market facility or other equity financings on acceptable terms, we may be unable to expand our BNB reserve, which could adversely affect the price of our Common Stock, as well as adversely affecting our business, financial condition and results of operations.

Our Common Stock has been delisted from The Nasdaq Capital Market and now trades on the OTCQB Venture Market, which may result in reduced liquidity, greater price volatility, and decreased analyst coverage, and may adversely affect your ability to sell your shares at a favorable price.

Our Common Stock was previously listed on The Nasdaq Capital Market under the symbol "BNBX" and is now traded on the OTCQB Venture Market. The OTCQB is generally considered to be a less liquid and less efficient market than national securities exchanges such as Nasdaq or the NYSE. As a result of this transition, you may experience the following:

• Reduced liquidity. Trading volume on the OTCQB is typically significantly lower than on national securities exchanges. This reduced liquidity may make it more difficult for you to buy or sell shares of our Common Stock at the time and price you desire, and large transactions may have a disproportionate effect on the market price of our Common Stock.
• Greater price volatility. Securities traded on the OTCQB may be subject to greater price volatility than securities listed on national securities exchanges due to lower trading volumes, fewer market makers, and less analyst coverage.
• Reduced institutional interest. Many institutional investors, including mutual funds, pension funds, and other large investors, are prohibited by their investment guidelines or applicable regulations from purchasing or holding securities that are not listed on a national securities exchange. As a result, the market for our Common Stock may be limited primarily to retail investors, which could further reduce liquidity and increase price volatility.
• Reduced analyst coverage. Securities listed on national securities exchanges typically receive broader coverage from securities analysts than securities traded on the OTCQB. The loss of analyst coverage following our delisting from Nasdaq may reduce investor awareness of our Company and adversely affect demand for our Common Stock.
• Penny stock regulations. Because our Common Stock is no longer listed on a national securities exchange and trades below $5.00 per share, it may be considered a "penny stock" under Rule 15g-9 of the Exchange Act unless an exclusion is available under the rule. At this time no exemption applied and our Common Stock is considered a “penny stock” under Rule 15g-9. These rules impose additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and "accredited investors." For transactions covered by these rules, a broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written consent prior to the transaction. These requirements may reduce trading activity in the secondary market for our Common Stock and make it more difficult for investors to sell their shares.
• Inability to incorporate by reference. Because our Common Stock is traded on the OTCQB and we do not currently meet the exclusions from the definition of "penny stock" under Rule 3a51-1 of the Exchange Act, we are unable to incorporate by reference into this registration statement our previously filed annual reports, quarterly reports, and other SEC filings pursuant to General Instruction VII(D)(1)(c) of Form S-1. As a result, this prospectus includes or reproduces in full all financial statements, management's discussion and analysis, and other disclosure that would otherwise be incorporated by reference, which may result in a longer and more complex prospectus than investors are accustomed to reviewing for similarly-sized companies.

There can be no assurance that our Common Stock will ever be relisted on a national securities exchange. If we are unable to meet the listing standards of Nasdaq, the NYSE, or another national securities exchange in the future, our Common Stock will continue to trade on the OTCQB or potentially on a lower-tier OTC market, which could further adversely affect the liquidity and market price of our Common Stock and our ability to raise capital through equity offerings.

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 listing; or
• w 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.

If the Nasdaq Listing Council grants our request for the Listing Council Review, and such review results in our Common Stock resuming to be traded on the Nasdaq Capital Market, the Nasdaq Reverse Split Rule will apply until at least March 14, 2027 and if the Reverse Stock Split is implemented we would be 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, if the Nasdaq Listing Council grants our request for the Listing Council Review, and such review results in our Common Stock resuming to be traded on the Nasdaq Capital Market, based on our prior reverse stock splits we would be subject to Nasdaq’s Reverse Split Rule until at least March 14, 2027. Should our Board of Directors effect the Reverse Stock Split, and our Common Stock resumed trading on Nasdaq, 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 Series A Warrants. The Series A Warrants include a provision that resets their exercise price in the event of a reverse split of Common Stock, to a price equal to the lesser of (i) the then exercise price of $5.13 per share and (ii) the daily lowest volume weighted average price (VWAP) during the period commencing five trading days immediately preceding and five trading days commencing on the date we effect a reverse stock split with a proportionate adjustment to the number of shares underlying such warrants. 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 Series A Warrants could result in substantial dilution to our existing stockholders.