# BNB Standard Corp: Form 10-Q for the period ended Jan 31, 2026

- Company: [BNB Standard Corp](/companies/bnc.md) (CIK 1482541)
- Form: 10-Q
- Filed: 2026-03-16
- Accepted by EDGAR: Mar 16, 2026, 16:55 ET
- Period: 2026-01-31
- Accession: 0001493152-26-010296
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1482541/000149315226010296/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1482541/000149315226010296/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-01-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-11-01 to 2026-01-31 | $7.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-11-01 to 2026-01-31 | $5.6m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-11-01 to 2026-01-31 | $1.8m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-11-01 to 2026-01-31 | $6.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-11-01 to 2026-01-31 | −$164.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-11-01 to 2026-01-31 | −$18.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-11-01 to 2026-01-31 | −$106.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-11-01 to 2026-01-31 | −$2.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-11-01 to 2026-01-31 | −$2.00 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-11-01 to 2026-01-31 | 53,180,317 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Cash and equivalents | at 2026-01-31 | $11.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-01-31 | $22.5m | us-gaap:AssetsCurrent |
| Total assets | at 2026-01-31 | $436.8m | us-gaap:Assets |
| Current liabilities | at 2026-01-31 | $8.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-01-31 | $71.9m | us-gaap:Liabilities |
| Shareholders' equity | at 2026-01-31 | $364.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,854 characters.

*The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report, which include additional information about our accounting policies, practices, and the transactions underlying our financial results, as well as with our audited consolidated financial statements included in our Transitional Annual Report on Form 10-KT for the four months ended April 30, 2025, as filed with the SEC. In addition to historical information, the following discussion and other parts of this Quarterly Report contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking information due to the factors discussed under “Cautionary Statements” appearing elsewhere herein and the risks and uncertainties described or identified in “Item 1A – Risk Factors” in our Transitional Annual Report on Form 10-KT for the four months ended April 30, 2025, as updated from time to time in the Company’s filings with the SEC, and Part II, Item 1A of this Quarterly Report entitled “Risk Factors.”*

### Non-GAAP Financial Measures

*To supplement our financial results on U.S. generally accepted accounting principles (“GAAP”) basis, we use non-GAAP measures including net bookings, backlog, as well as adjusted net income (loss) which reflects adjustments for certain non-cash expenses such as stock-based compensation, unrealized loss on digital assets, gain on change in fair value of warrant liability, airdrop income, certain debt-related items and depreciation and amortization expense. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. For purposes of this Quarterly Report, (i) “adjusted net income (loss)” and “adjusted operating income (loss)” mean GAAP net income (loss) and operating income (loss), respectively, after adjustment for non-cash equity compensation expense, unrealized loss on digital assets, airdrop income, certain debt-related items and depreciation & amortization expense, and (ii) “net bookings” means new sales contracts executed during the quarter for which we received an initial deposit, net of any adjustments including cancellations and change orders during the quarter.*

*Our backlog or remaining performance obligations and net bookings may not be indicative of future operating results, and our customers may attempt to renegotiate or terminate their contracts for a number of reasons, including delays in or inability to obtain project financing or licensing or abandonment of the project entirely. Accordingly, there can be no assurance that contracts included in the backlog or remaining performance obligations will actually generate revenues or when the actual revenues will be generated.*

### Overview

CEA Industries Inc. (the “Company”) was incorporated under the laws of the State of Nevada on October 14, 2009, and is headquartered in Louisville, Colorado. Historically, the Company operated a portfolio of consumer and commercial businesses, including climate control systems for controlled environment agriculture and retail operations in the vaping industry.

In August 2025, the Company initiated a strategic transformation by adopting a digital asset treasury strategy focused on BNB, the native token of the Binance blockchain. Through its wholly owned subsidiary, CEA BRS LLC, a Delaware limited liability company and the sole stockholder of BNC BNB Cayman, a Cayman Islands exempt company, the Company seeks to build and manage a substantial corporate treasury of BNB, providing institutional-grade exposure to blockchain infrastructure.

### Overview of Digital Asset Treasury Strategy

The Company has recently implemented a treasury strategy focused on acquiring and holding digital assets, primarily BNB. As of January 31, 2026, the Company held 515,544 BNB tokens with an aggregate fair value of $402.8 million. These digital asset holdings represent the substantial majority of the Company’s total assets. Management views BNB as a strategic treasury asset and intends to continue evaluating opportunities to acquire additional digital assets as part of its capital allocation strategy.

The Company’s strategy represents a significant departure from traditional corporate treasury strategies, which typically involve holding cash, cash equivalents, and short-term investments. Instead, the Company’s financial condition and results of operations are now significantly influenced by changes in the market price of BNB. Digital asset markets have historically exhibited significant volatility and are subject to evolving regulatory frameworks and technological risks. As a result, fluctuations in the market price of BNB will have a material impact on the Company’s financial condition, results of operations, and the market price of its common stock. Investors should carefully consider the risks associated with the Company’s digital asset holdings and treasury strategy described under “Part II, Item 1A – Risk Factors” in this Quarterly Report on Form 10-Q.

The Company may in the future generate returns through additional digital asset-related activities such as validation services, lending, and other decentralized finance protocols, though no BNB is currently staked or pledged. The Company’s BNB-focused DAT strategy was launched on August 5, 2025, following the closing of the PIPE Transaction that raised approximately $500 million in cash and digital assets, with up to $750 million in additional proceeds available through warrant exercises. Under the DAT strategy, BNB is the primary treasury reserve asset.

To support this strategy, the Company established CEA BRS LLC, a Delaware limited liability company, as a special purpose entity to hold and manage certain cryptocurrency assets in accordance with the DAT strategy. Additionally, the Company formed BNC BNB Cayman, an exempted company organized under the laws of the Cayman Islands, to facilitate international operations and treasury management. These entities are wholly owned subsidiaries of the Company.

The Company’s BNB holdings are held in custody through Ceffu, an institutional digital asset custody platform operating within the Binance ecosystem. Ceffu utilizes multi-party computation wallet infrastructure and maintains segregated account structures designed for institutional holders. While Ceffu operates as a separate entity from the Binance exchange, our custody arrangement creates concentration exposure to the broader Binance ecosystem. Disruptions to Ceffu’s operations, changes in its regulatory status, or adverse developments affecting the Binance ecosystem could materially impact our ability to access, transfer, or liquidate our BNB holdings.

As a result of the implementation of our BNB focused DAT strategy, digital assets, primarily BNB, now represent 93.7% of our total assets, while our Retail and Industry segment operating businesses represent a significantly smaller portion of our overall asset base on economic exposure.

### Key Drivers of Results of Operations

The Company’s results of operations are influenced by several key factors, including: changes in the market price of BNB and other ancillary digital assets held by the Company; fair value adjustments recognized under applicable accounting standards for digital assets; the generation of airdrop income; operating expenses associated with maintaining the Company’s public company infrastructure; and strategic decisions regarding the acquisition, holding, or disposition of digital assets. Because the Company holds a substantial quantity of digital assets, particularly BNB, changes in the market price of BNB may significantly affect the Company’s reported earnings. These fluctuations may not reflect changes in the Company’s operating performance but instead reflect market-driven changes in the value of its digital asset holdings.

During the period from October 31, 2025 to January 31, 2026, the Company’s BNB token holdings increased modestly by 0.7%, from 511,932 tokens to 515,544 tokens, reflecting incremental change of 3,612 tokens in holdings during the period. During this same period, the market price of BNB declined significantly by 28.3%, from $1,089 per token, to $781 per token. As a result, the aggregate fair value of the Company’s BNB holdings decreased from $557.4 million to $402.8 million, driven by market price volatility rather than changes in the token quantity. The decline in BNB market prices had a materially greater impact on the carrying value of digital assets than the operating results of the Company’s retail and industry business during the same period.

In addition to changes in token prices during this period, the Company recognized a substantial decrease in airdrop-related income associated with its digital asset holdings. The Company holds the majority of its BNB assets in Ceffu, an institutional custodian operating within the Binance ecosystem, which enables the Company to maintain eligibility to receive airdrops distributed within the Binance ecosystem. During the three months ended January 31, 2026, airdrop income totaled $1.3 million, representing a decrease of 77.6% compared to $5.8 million recognized during the three months ended October 31, 2025. This substantial decline in airdrop-related income reflects reduced airdrop activity within the Binance ecosystem during the current period. While airdrop income contributed positively to results, it did not offset the impact of the decline in BNB market prices during the quarter.

In addition to airdrops, a portion of our BNB treasury yield has historically been generated through participation in Binance Launchpool and HODLer Airdrops – platform programs through BNB holders receive newly issued tokens by locking or holding BNB. During the quarter ended January 31, 2026, the frequency and scale of these programs declined materially compared to prior periods, contributing to a reduction in platform-delivered yield. Taken together with the decline in airdrop activity described above, these trends reflect a broader moderation in yield generation during the period. The Company cannot predict the timing, frequency, or magnitude of future Launchpool or HODLer Airdrop allocations, and continued reduction in these programs may adversely affect our treasury yield and results of operations.

### Digital Asset Market Conditions

Our treasury strategy is designed to accumulate and compound BNB over time, with a focus on growing value of our digital asset holdings on a per-share basis as a key long-term measure of shareholder value creation. Digital asset markets are inherently cyclical, and short-term price fluctuations — while material to our GAAP-reported results in any given quarter — do not alter our management’s conviction in the long-term trajectory of BNB and the broader Binance ecosystem. We believe our disciplined approach to treasury management positions the Company to benefit from market recoveries while managing risk through custody, yield optimization, and strategic capital allocation.

During the three months ended January 31, 2026, digital asset markets experienced periods of significant price volatility. The market price of BNB fluctuated in response to a variety of factors, including macroeconomic conditions, investor sentiment toward digital assets, developments affecting cryptocurrency exchanges and blockchain networks, and regulatory developments in the United States and other jurisdictions. Because the Company holds a significant quantity of BNB, changes in the market price of BNB had and will continue to have a substantial impact on the Company’s balance sheet and results of operations. Investors should consider that fluctuations in the Company’s financial results during the period were driven primarily to changes in digital asset market prices and airdrop yield rather than changes in the Company’s operating activities.

### Our Retail & Industry Business

The Company operates its controlled environment agriculture (“CEA”) business within the Retail and Industry segment, which includes the provision of climate control systems for CEA industry. In June 2025, the Company acquired Fat Panda which also operates within this segment. As of January 31, 2026, Fat Panda operates 34 retail locations, including 30 Fat Panda branded stores and 4 Electric Fog branded outlets, along with an e-commerce platform. Fat Panda also manufactures a proprietary line of premium e-liquids in-house and maintains a portfolio of trademarks and related intellectual property. Revenue from CEA equipment and systems represents a relatively small portion of consolidated revenue, totaling $1.1 million for the nine months ended January 31, 2026 and $0.7 million for the three months ended January 31, 2026.

### Recent Developments

Subsequent to the quarter end, the Board of Directors has taken steps to reconstitute all four of its standing committees – the Audit, Compensation, Nominating and Governance, and Strategic Committees - with three fully independent directors. The Board believes this action reinforces its commitment to strong corporate governance and shareholder accountability and reflects the Board’s ongoing focus on aligning its structure with best practices for public companies.

As a result of these governance enhancements and with the termination of an agreement between 10X Capital Partners LLC (“10X Capital Partners”) and YZi Labs Management Ltd. (“YZi Labs”), the Company, through the Strategic Committee, is currently engaged in the process of renegotiating the terms of the Company’s Asset Management Agreement with 10X Capital Partners (the “AMA”) with the goal of achieving market standard arms-length terms, including reduced management fees, for the benefit of all shareholders. The Company believes that amending the AMA to better align its terms with the Company’s current scale and asset profile is in the best interest of shareholders, and is committed to completing this process in an expeditious manner. There can be no assurance, however, that the renegotiation will be completed on terms acceptable to the Company.

On March 13, 2026, the Company received a letter from YZi Labs Management Ltd. (“YZi Labs”) that requested that the Company fix a record date for determining the stockholders entitled to consent to (1) repeal any provision of the Company’s Amended and Restated Bylaws (the “Bylaws”), in effect at the time such proposal becomes effective, including any amendments thereto, which were not included in the Bylaws that were in effect and were filed with the SEC on July 25, 2025, (2) increase the size of the Board by seven (7) directors to thirteen (13) directors in total pursuant to Article II, Section .02 of the Bylaws, (3) amend Article II, Section .04 of the Bylaws to clarify and affirm stockholders’ ability to fill vacancies on the Board, including those resulting from an increase in the size of the Board by the vote or written consent of the Company’s stockholders or by court order, and (4) elect YZi Labs’ seven (7) nominees: Max S. Baucus, David J. Chapman, Teresa Marie Goody Guillén, Jiajin “Jane” He, Alex Odagiu, Matthew Roszak and Ling “Ella” Zhang, to serve as directors of the Company. The Board will review YZi Labs’ letter to evaluate its validity under the Bylaws, and if such letter is valid the Company will disclose the record date for determining the stockholders entitled to consent to YZi Labs’ proposals.

### Results of Operations

*Because fair value changes in digital assets are recorded through our consolidated statements of operations, our BNB Treasury Management segment results—and consequently our consolidated net income—will be subject to significant volatility based on fluctuations in the market price of BNB. Investors should expect material period-to-period variations in our reported net income that may bear no relationship to the operating performance of our Retail and Industry segment.*

### Comparison of the Three Months Ended January 31, 2026, and January 31, 2025

|  | Successor Three months ended January 31, 2026 | Predecessor Three months ended January 31, 2025 | Increase (Decrease) ($) | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $7,334,626 | $6,908,817 | $425,809 | 6% |
| Cost of revenue | 5,571,329 | 5,146,901 | (424,428) | -8% |
| Gross profit | 1,763,297 | 1,761,916 | 1,381 | 0% |
| Operating expenses |  |  |  |  |
| Advertising and marketing expenses | 284,366 | 191,531 | (92,835) | -48% |
| Unrealized loss on digital assets | 159,791,308 | - | (159,791,308) | 100% |
| Selling, general and administrative expenses | 5,997,657 | 612,731 | (5,384,926) | -879% |
| Total operating expenses | 166,073,331 | 804,262 | (165,269,069) | -20549% |
| Operating income (loss) | (164,310,034) | 957,654 | (165,267,688) | -17258% |
| Other income (expense), net |  |  |  |  |
| Airdrop income | 1,265,452 | - | 1,265,452 | 100% |
| Gain on change in fair value of warrant liability | 38,061,767 | - | 38,061,767 | 100% |
| Interest expense | (158,330) | - | (158,330) | 100% |
| Other income (expense), net | 176,792 | - | 176,792 | 100% |
| Total other income | 39,345,681 | - | 39,345,681 | 100% |
| Income/ (loss) before income tax expense (benefit) | (124,964,353) | 957,654 | (125,922,007) | -13149% |
| Income tax expense (benefit) | (18,392,213) | 184,337 | (18,576,550) | 0% |
| Net Income (Loss) | $(106,572,140) | $773,317 | $(107,345,457) | -13881% |

#### Revenues and Cost of revenue

Revenue for the three months ended January 31, 2026 was $7.3 million, compared to $6.9 million for the three months ended January 31, 2025, representing an increase of $0.4 million, or 6%. The increase in revenue was primarily driven by the CEA equipment and system sales, which contributed $0.6 million during the quarter. This increase was partially offset by $0.2 million reduction in sales from the discontinuation of one product as well as pricing adjustments implemented to recover Canadian excise tax.

Cost of revenue increased by $0.5 million or 8%, from $5.1 million for the three months ended January 31,2025 to $5.6 million for the three months ended January 31, 2026. The increase was primarily driven by $1.0 million of costs associated with CEA equipment and system revenues, including $0.4 million increase in warranty costs. This increase was partially offset $0.5 million or 5% improvement in margin, resulting from the discontinuation of one lower margin product.

#### Total operating expenses

Total operating expense was $166.1 million for the three months ended January 31, 2026, compared $0.8 million for the three months ended January 31, 2025, representing an increase of $165.3 million, or 20549%. The increase was primarily driven by an unrealized loss of $159.8 million on the remeasurement of digital assets during the current quarter, and higher selling, general and administrative expenses (“SG&A”).

During the period from October 31, 2025 to January 31, 2026, the Company’s BNB holdings increased modestly by 0.7%, while the market price of BNB declined by 28.3%, from $1,089 per token to $781 per token, resulting in an unrealized loss of $159.8 million. As a result, the unrealized loss recognized during the quarter was driven primarily by market price volatility, rather than changes in the quantity of digital assets held. Management believes this performance reflects broader digital asset market conditions rather than any deterioration in BNC’s underlying business or strategy.

SG&A expenses increased primarily due to $2.0 million of asset management fees and a $4.7 million increase in professional and advisory fees, which was offset by $2.7 million net decrease in compensation expense. The increase in professional and advisory fees included $1.6 million related to outsourced accounting integration support and other legal fees incurred in connection with ongoing legal matters. The increases were partially offset by a net decrease of $2.7 million in compensation expense, which reflected $1.6 million increase in compensation costs, offset by $4.6 million reversal of stock-based compensation expenses as described in *Note 2 – Correction of Error – RUS Compensation.*

In addition, the Company incurred significant costs as a direct result of the shareholder activism campaign initiated by YZi Labs during the quarter ended January 31, 2026. In connection with YZi Labs’ filing of preliminary consent solicitation materials seeking to expand the size of the Board of Directors and elect its own slate of director candidates, and its stated intent to nominate candidates at the Company’s next annual meeting of stockholders, the Company engaged legal, strategic, and communications advisors across multiple disciplines, resulting in $3.1 million in incremental professional and advisory fees during the period. These matters have required significant time and resources from the Board and management and are expected to continue to do so, which could adversely affect the Company’s results of operations. The Company expects these activism-related costs to remain elevated in the near term in connection with these matters. For a more detailed discussion of the risks associated with YZi Labs’ activist campaign, including the potential impact on the Company’s business, operations, and stock price, see Part II, Item 1A, “*Risk Factors — Shareholder activism has caused and will continue to cause us to incur substantial costs and divert management’s attention and resources and could disrupt our operations and the trading price of our common stock”.*

#### Other income (expense), net

The Company recognized other income of $39.3 million for the three months ended January 31, 2026, compared to $0 for the three months ended January 31, 2025. Other Income for the current period consisted of gain on change in fair value of warrant liability of $38.1 million, currency translation and interest expense on promissory notes related to the Acquisition and airdrop income.

The Company holds the majority of its BNB tokens with Ceffu, an institutional custodian operating within the Binance ecosystem, which enables the Company to maintain eligibility for airdrops distributed within Binance ecosystem. During the three months ended January 31, 2026, the Company recognized $1.3 million of airdrop income, compared to $5.8 million recognized during the three months ended October 31, 2025. This decline reflects reduced airdrop activity within the Binance ecosystem during the current period, which contributed to lower non-operating income. The Company cannot predict the timing or magnitude of future airdrops, and continued reduction in airdrop frequency or size could have an adverse effect on our results of operations.

### Non-GAAP Combined Nine Months Ended January 31, 2026

Our financial results for the periods from May 1, 2025 through June 6, 2025, and the nine months ended January 31, 2025 are referred to as those of the “Predecessor” period. Our financial results for the period from June 7, 2025, through January 31, 2026 are referred to as those of the “Successor” period. Our results of operations as reported in our Condensed Consolidated Financial Statements and Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for these periods are prepared in accordance with U.S. GAAP. Although U.S. GAAP requires that we report our results for the period from May 1, 2025 through June 6, 2025 and the period from June 7, 2025 through January 31, 2026 separately, management views our operating results for the nine months ended January 31, 2026 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison of our results to prior periods. We believe we cannot adequately benchmark the operating results of the period from June 7, 2025 through January 31, 2026 against any of the previous periods reported in our Condensed Consolidated Financial Statements and Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) without combining it with the period from May 1, 2025 through June 6, 2025, and do not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding our overall operating performance. Management believes that the key performance metrics for the Successor period when combined with the Predecessor period provide more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, in addition to presenting our results of operations as reported in our Condensed Consolidated Financial Statements in accordance with U.S. GAAP, the tables and discussion below also present the combined results for the nine months ended January 31, 2026. The combined results for the nine months ended January 31, 2026, represent the sum of the reported amounts for the Predecessor period from May 1, 2025 through June 6, 2025 and the Successor period from June 7, 2025 through January 31, 2026. These combined results are not considered to be prepared in accordance with U.S. GAAP and have not been prepared as pro forma results per applicable regulations. The combined operating results do not reflect the actual results we would have achieved absent our acquisition of Fat Panda and are not necessarily indicative of future results. Accordingly, the results for the combined nine months ended January 31, 2026 (prepared on a non-GAAP basis) and nine months ended January 31, 2025 (prepared on a GAAP basis) may not be comparable.

### Comparison of the Nine Months Ended January 31, 2026, and January 31, 2025

|  | Successor Period from June 7, 2025 through January 31, 2026 | Predecessor Period from May 1 through June 6, 2025 | Non-GAAP Combined Nine months ended January 31, 2026 | Predecessor Nine months ended January 31, 2025 | Increase (Decrease) ($) | Percentage Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | $19,055,752 | $2,927,689 | $21,983,441 | $21,313,671 | $669,770 | 3% |
| Cost of revenue | 13,827,593 | 2,001,537 | 15,829,130 | 13,824,712 | (2,004,418) | -14% |
| Gross profit | 5,228,159 | 926,152 | 6,154,311 | 7,488,959 | (1,334,648) | -18% |
| - |  |  |  |  |  |  |
| Operating expenses |  |  |  |  |  |  |
| Advertising and marketing expenses | 5,010,953 | 63,202 | 5,074,155 | 490,008 | (4,584,147) | -936% |
| Unrealized loss on digital assets | 45,757,590 | - | 45,757,590 | - | (45,757,590) | 100% |
| Selling, general and administrative expenses | 34,599,188 | 842,348 | 35,441,536 | 4,798,756 | (30,642,780) | -639% |
| Total operating expenses | 85,367,731 | 905,550 | 86,273,281 | 5,288,764 | (80,984,517) | -1531% |
| Operating income (loss) | (80,139,572) | 20,602 | (80,118,970) | 2,200,195 | (82,319,165) | -3741% |
| - |  |  |  |  |  |  |
| Other income (expense), net |  |  |  |  |  |  |
| Airdrop income | 7,093,030 | - | 7,093,030 | - | 7,093,030 | 100% |
| Gain on change in fair value of warrant liability | 244,879,854 | - | 244,879,854 | - | 244,879,854 | 100% |
| Interest expense | (822,607) | - | (822,607) | - | (822,607) | 100% |
| Other income (expense), net | (80,223) | - | (80,223) | - | (80,223) | 100% |
| Total other income | 251,070,054 | - | 251,070,054 | - | 251,070,054 | 100% |
| - |  |  |  |  |  |  |
| Income/ (loss) before income tax expense (benefit) | 170,930,482 | 20,602 | 170,951,084 | 2,200,195 | 168,750,889 | 7670% |
| - |  |  |  |  |  |  |
| Income tax expense (benefit) | (291,754) | 1,589 | (290,165) | 426,838 | (717,003) | -168% |
| - |  |  |  |  |  |  |
| Net Income (Loss) | $171,222,236 | $19,013 | $171,241,249 | $1,773,357 | $169,467,892 | 9556% |

#### Revenues and Cost of revenue

Revenue for the nine months ended January 31, 2026, was $22.0 million, compared to $21.3 million for the nine months ended January 31, 2025, representing an increase of $0.7 million, or 3%. The increase was primarily driven by $1.1 million of revenue from CEA equipment and systems. This increase was partially offset by $0.4 million decrease in revenue resulting from the discontinuation of one product as well as pricing adjustments implemented to recover Canadian excise tax.

Cost of revenue increased by $2.0 million or 14%, from $13.8 million for the nine months ended January 31, 2025 to $15.8 million for the nine months ended January 31, 2026. The increase was primarily driven by $1.4 million of costs associated with CEA equipment and systems revenue, which included an additional $0.4 million in warranty costs and a net $0.6 million increase reflecting higher material costs resulting from increased cost per unit following the enactment of new Canadian federal and provincial excise taxes, partially offset by a modest improvement in margins from the discontinuation of one lower margin product.

#### Total operating expenses

Total operating expenses was $86.3 million for the nine months ended January 31, 2026, compared to operating expenses of $5.3 million for the nine months ended January 31, 2025, an increase of $81.0 million, or 1531%. The increase was primarily driven by an unrealized loss of $45.8 million on the remeasurement of digital assets during the nine months ended January 31, 2026, by higher selling, general and administrative expenses, which increased by $30.6 million to $35.4 million.

As of January 31, 2026, the Company held 515,544 BNB tokens. During the period, the market price of BNB experienced significant volatility, increasing by 32% from $825 per token in August 2025 to $1,089 per token as of October 31, 2025, before declining by 28.3% to $781 per token as of January 31, 2026. As a result, the unrealized loss recognized during the period was driven primarily by fluctuations in market price, rather than changes in the quantity of digital assets held.

The increase in SG&A was mainly attributable to a one-time warrant issuance cost of $14.6 million, asset management fees of $3.8 million, an increase of $7.5 million in professional and contractor fees, and $0.5 million in additional insurance costs associated with BNB treasury operations. Of the increase in professional and advisory fees, $3.1 million is associated with our ongoing response to an activist shareholder campaign while $4.4 million is associated with accounting and other legal fees incurred in connection with the Fat Panda Acquisition and PIPE Transaction. Advertising and marketing expenses also increased by $4.6 million from $0.5 million during the nine months ended January 31, 2025 to $5.1 million during the nine months ended January 31, 2026 as the Company incurred additional marketing costs in connection with PIPE Transaction and ATM sales during the current quarter.

#### Other income (expense), net

We recognized other income of $251.1 million for the nine months ended January 31, 2026, compared to $0 for the nine months ended January 31, 2025. Other Income for the current period consisted of airdrop income, gain on change in fair value of warrant liability, and interest and debt discount amortization on notes related to the Acquisition.

### Financial Condition, Liquidity and Capital Resources

Our primary sources of liquidity include cash and cash equivalents, and, beginning in August 2025, digital assets held in our treasury. As of January 31, 2026, we had cash and cash equivalents of $11.3 million and digital assets measured at fair value of $409.2 million, as presented in our condensed consolidated unaudited balance sheets. We did not have any borrowings outstanding under a credit facility as of January 31, 2026.

We hold a significant portion of our liquid assets in digital assets, which are measured at fair value with changes recognized in earnings. As further described in *Note 3 – Digital Assets* to our condensed consolidated financial statements, our digital assets consist primarily of BNB.

Our liquidity and capital resources are subject to volatility in the market price of BNB and other digital assets. A decline in the market price of BNB or other digital assets would reduce the fair value of our digital assets and could adversely affect our ability to fund operations, invest in growth, or meet obligations as they come due. We manage this risk by maintaining fiat liquidity; however, these measures may not fully mitigate market, custodial or regulatory risks. A 10% decline in the price of BNB as of January 31, 2026, holding all other factors constant, would have resulted in an additional unrealized loss of approximately $40.3 million. Conversely, a 10% increase would have resulted in an additional unrealized gain of approximately $40.3 million. These potential fluctuations significantly exceed the operating income or loss expected from our Retail and Industry segment.

A substantial portion of the Company’s assets consists of digital assets, primarily BNB. Although digital assets may be traded on various cryptocurrency exchanges, the liquidity of these assets may vary depending on market conditions. Periods of significant volatility or market stress may reduce liquidity, widen bid-ask spreads, and limit the Company’s ability to sell digital assets at favorable prices.

The Company’s ability to generate liquidity may depend in part on its ability to sell digital assets in the market. If the Company were required to liquidate a significant portion of its BNB holdings to meet liquidity needs, such sales could adversely affect the market price of BNB and reduce the value of the Company’s remaining holdings. Management evaluates the Company’s liquidity requirements on an ongoing basis and may determine to sell or otherwise utilize portions of its digital asset holdings to fund operations, pursue strategic opportunities, or satisfy other capital requirements.

### Digital Asset Treasury Risk Management

The Company has implemented policies and procedures designed to manage risks associated with holding digital assets. These measures include the use of institutional custodial platforms, internal controls governing the authorization and execution of digital asset transactions, and monitoring of market conditions affecting the Company’s digital asset holdings. Despite these measures, digital assets are subject to risks that differ from traditional financial assets, including cybersecurity risks, technological risks associated with blockchain networks, and the potential for rapid changes in market conditions. The Company continuously evaluates and updates its risk management practices as its digital asset treasury strategy evolves.

### Summary of Cash Flows

The following summarizes our approximate cash flows for the period from June 7, 2025 through January 31, 2026 (Successor), for the period May 1, 2025 through June 6, 2025 (Predecessor) and for the nine months ended January 31, 2025 (Predecessor):

|  | Successor Period from June 7 through January 31, 2026 | Predecessor Period from May 1 through June 6, 2025 | For nine Months Ended January 31, 2025 |
| --- | ---: | ---: | ---: |
| Net cash used in operating activities | $(32,107,342) | $(238,442) | $(306,009) |
| Net cash used in investing activities | (185,657,820) | - | (56,153) |
| Net cash provided by financing activities | 217,621,064 | - | - |
| **Net decrease in Cash and Cash Equivalents** | **$(144,098)** | **$(238,442)** | **$(362,162)** |

### Operating Activities

Cash used in operating activities for the period from June 7, 2025 through January 31, 2026 (Successor) was $32.1 million, compared to $0.2 million used during the period from May 1, 2025 through June 6, 2025 (Predecessor) and $0.3 million used for the nine months ended January 31, 2025 (Predecessor). Operating cash flows for the Successor period were significantly affected by several non-cash items, including an unrealized loss on digital assets of $45.8 million, a $244.9 million gain from changes in the fair value of warrant liabilities, and $7.1 million of non-cash income from airdrops. Depreciation and amortization expense and non-cash fees paid in digital assets also impacted cash used in operations.

Working-capital movements of $0.5 million further contributed to the overall cash outflow. A $1.2 million utilization in prepaid expenses represented the source of cash. Additional changes in accounts receivable, taxes payable inventory, and accounts payable and accrued liabilities also affected cash used in operations.

### Investing Activities

Cash used in investing activities for the period from June 7, 2025 through January 31, 2026 (Successor) was $185.7 million, compared with no cash used during the period from May 1, 2025 through June 6, 2025 (Predecessor) and $56 thousand used during the nine months ended January 31, 2025 (Predecessor).This outflow was primarily driven by $10.4 million of cash consideration paid in connection with the Fat Panda Acquisition and the $175.3 million used to purchase digital assets.

### Financing Activities

Cash provided by financing activities for the period from June 7, 2025 through January 31, 2026 (Successor) totaled $217.6 million, compared to no financing cash flows during the periods from May 1, 2025 through June 6, 2025 (Predecessor) or the nine months ended January 31, 2025 (Predecessor). The primary source of cash was $217.5 million of net proceeds from the issuance of common stock and warrants in the PIPE offering, which included $9.3 million of issuance costs related to common stock and warrants in the PIPE offering. In addition, the Company generated $12.9 million of proceeds from sales under the ATM program. These inflows were partially offset by $12.7 million in cash used for share repurchases during the period.

### Contractual Payment Obligations

As of January 31, 2026, our contractual payment obligations consisted of a building lease. Refer to *Note 5 – Leases* of the notes to the condensed consolidated financial statements, included as part of this Quarterly Report for a discussion of our building lease.

### Commitments and Contingencies

Refer to *Note 12 – Commitments and Contingencies* of the notes to the condensed consolidated financial statements, included as part of this Quarterly Report for a discussion of commitments and contingencies.

### Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our liquidity or capital resources. As of January 31, 2026, we had no off-balance sheet arrangements. During the quarter ended January 31, 2026, we did not engage in any off-balance sheet financing activities other than those included in the discussed above and those reflected in *Note 12 – Commitments and Contingencies* of our condensed consolidated financial statements.

### Known Trends and Uncertainties Affecting Our Business

Management is aware of several trends and uncertainties that may affect the Company’s financial condition and results of operations, including: continued volatility in digital asset markets; evolving regulatory frameworks governing digital assets and cryptocurrency exchanges; technological developments affecting blockchain networks and decentralized applications; and macroeconomic conditions affecting investor demand for digital assets. These trends may influence the market value and liquidity of BNB and other digital assets and may therefore materially affect the Company’s financial condition and results of operations.

### Critical Accounting Estimates

This discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. Certain accounting policies are particularly important to the understanding of our financial position and results of operations and require the application of significant judgment by our management or can be materially affected by changes from period to period in economic factors or conditions that are outside of our control. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, observance of trends in the industry, information provided by our customers, and information available from other outside sources, as appropriate. Actual results could materially differ from those estimates. Key estimates include allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets, valuation of equity- based compensation, valuation of deferred tax assets and liabilities, warranty accruals, accounts receivable and inventory allowances, and legal contingencies.

## Market risk

As filed, 152 characters.

We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, therefore are not required to provide the information under this item.

## Controls and procedures

As filed, 4,012 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Principal Financial and Accounting Officer, both of which positions have previously been held by the same person, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer concluded that as a result of material weaknesses in our internal control over financial reporting as described in Item 9A of our Transitional Annual Report on Form 10-KT for the four months ended April 30, 2025, our disclosure controls and procedures were not effective as of January 31, 2026. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure.

We did not maintain effective controls over certain aspects of the financial reporting process because: (i) we lack a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements, (ii) there is inadequate segregation of duties due to our limited number of accounting personnel, and (iii) we have insufficient controls and processes in place to adequately verify the accuracy and completeness of spreadsheets that we use for a variety of purposes including revenue, taxes, stock-based compensation and other areas, and place significant reliance on, for our financial reporting.

We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies in the future when our financial assets and our operations would support the requirements of additional personnel. We are committed to continuing to improve our financial organization, when we are able, including, without limitation, expanding our accounting staff and improving our systems and controls to reduce our reliance on the manual nature of our existing systems. However, due to our size and our financial resources, remediating the several identified weaknesses has not been possible and may not be economically feasible now or in the future.

As a significant step in the remediation of these deficiencies, effective March 9, 2026, the Company appointed Brent Miller as Chief Financial Officer. Mr. Miller’s appointment separates the principal financial and accounting officer function from the Chief Executive Officer role for future periods and is expected to strengthen the Company’s financial reporting capabilities, supervisory review structure, and segregation of duties.

### Changes in Internal Control over Financial Reporting

There were changes in our internal control over financial reporting during the quarter ended January 31, 2026 related to integration of new digital asset treasury processes and valuation controls for warrant liabilities. These changes were part of our remediation plan and did not materially affect, and are not reasonably likely to materially affect, our internal control over financial reporting, except as noted above with respect to the identified material weakness.

Management has implemented procedures designed to provide reasonable assurance regarding the safeguarding of the Company’s digital assets, including controls governing access to private keys, authorization requirements for digital asset transfers, and oversight of custodial arrangements with third-party service providers.

## Risk factors

As filed, 22,471 characters.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A of our Transitional Annual Report on Form 10-KT for the four months ended April 30, 2025. Those risk factors, together with the risk factors set forth below, could materially affect our business, financial condition, operating results, or prospects. The risks described in our Form 10-KT and below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, operating results, or prospects.

### Risks Related to Our Digital Asset Treasury Strategy

***Our financial condition is highly dependent on the market price of BNB, which has historically been subject to significant volatility.***

Our financial condition is highly dependent on the market price of BNB, which has historically been subject to significant volatility. As of January 31, 2026, we held 515,544 BNB tokens with a fair value of $402.8 million, representing the substantial majority of our total assets. As a result, our financial condition, results of operations, and the market price of our common stock may be materially affected by fluctuations in the market price of BNB. The price of BNB has historically experienced significant volatility and may continue to fluctuate substantially in response to numerous factors, many of which are beyond our control. These factors include, among others: overall cryptocurrency market conditions and investor sentiment; technological developments affecting blockchain networks; regulatory developments in the United States or other jurisdictions; changes in trading volumes or liquidity in markets for BNB; macroeconomic factors, including inflation, interest rates and financial market conditions; trading activity by large holders of BNB or other digital assets; and market speculation, media coverage, or social media commentary relating to digital assets. Digital asset markets may be more volatile and less regulated than traditional financial markets, and prices may fluctuate significantly over short periods of time. Because BNB represents a substantial portion of our assets, even modest declines in the market price of BNB could materially reduce the value of our assets and stockholders’ equity and may negatively affect our reported financial results. In addition, because changes in the fair value of our digital assets are reflected in our statements of operations, fluctuations in the market price of BNB may cause significant volatility in our reported earnings.

During the three months ended January 31, 2026, we recognized an unrealized loss of $159.8 million on digital assets as a result of declines in the price of BNB. Under our accounting policies, unrealized gains and losses from changes in the fair value of our digital asset holdings are recorded in our consolidated statements of operations. Accordingly, our reported net income or loss will be significantly affected by fluctuations in the market price of BNB, and these fluctuations could cause our financial results to vary substantially from period to period, independent of the performance of our operating businesses. A significant decline in the market price of BNB could adversely affect our ability to fund our operations, pursue strategic initiatives, pay dividends, service any indebtedness, or otherwise execute our business strategy. In addition, our stock price may be correlated with the price of BNB and other digital assets, and declines in the price of BNB could adversely affect the trading price of our common stock.

***Our digital asset treasury strategy is concentrated in a single asset, which subjects us to risks specific to the Binance ecosystem.***

Our digital asset treasury strategy currently focuses primarily on acquiring and holding BNB. As a result, our digital asset holdings are concentrated in a single digital asset rather than diversified across multiple assets or asset classes. This concentration increases our exposure to risks specific to BNB and the broader Binance ecosystem. The value and functionality of BNB are closely tied to the continued development, operation and adoption of the BNB Chain blockchain and the broader Binance ecosystem. Negative developments affecting BNB Chain, the Binance ecosystem, or entities associated with the development or promotion of BNB could adversely affect the value, liquidity, or market perception of BNB. These developments could include technological failures, security vulnerabilities, regulatory actions, reputational harm, or reduced developer or user adoption of BNB Chain. In addition, changes to the economic design, governance structure, or technical features of BNB or the BNB Chain network, including changes to token supply mechanisms, validator governance, or transaction fee structures, could negatively affect the value of BNB. Because we do not currently intend to diversify our digital asset holdings, any adverse developments affecting BNB or the Binance ecosystem could have a disproportionately negative impact on our financial condition and results of operations. Notwithstanding the foregoing, we may in the future diversify our digital asset holdings and reserve all rights to do so at the direction of the Board of Directors. Any digital assets into which we diversify may expose the Company to risks similar to those described above, as well as additional risks that may be specific to the particular digital asset or blockchain technology ecosystem in which such asset operates.

***Failures, vulnerabilities, or disruptions in the BNB Chain network could adversely affect the value of BNB and our digital asset holdings.***

BNB operates on the BNB Chain blockchain network, which relies on complex software, cryptographic protocols, and a distributed network of validators to process transactions and maintain the integrity of the blockchain. The BNB Chain network may be subject to technical failures, software bugs, consensus failures, or other vulnerabilities that could compromise the network’s security or functionality. In addition, blockchain networks have historically been targets of cyberattacks, including attempts to exploit vulnerabilities in network software or associated applications. Any successful attack or exploit affecting the BNB Chain network could disrupt network operations, reduce confidence in the network, or adversely affect the market price of BNB. Any such developments could materially and adversely affect the value of our digital asset holdings.

***The validator structure of the BNB Chain network may expose it to governance or operational risks.***

The BNB Chain network relies on a limited number of validators to confirm transactions and maintain the network. Compared to some other blockchain networks, the validator structure of BNB Chain may involve a relatively concentrated group of participants. Concentration among validators could increase the risk of coordinated actions, governance disputes, or operational disruptions affecting the network. If validators were to act in a manner that adversely affects the operation or perceived integrity of the network, confidence in the Binance ecosystem could decline. Any such decline in confidence could negatively affect the market price of BNB and the value of our digital asset holdings.

***Certain of our digital assets are held at third-party exchanges and are subject to custodial and counterparty risks.***

Certain of our digital assets are held at third-party exchanges or custodial platforms. These assets may be recorded as receivables rather than digital assets on our condensed consolidated balance sheet when they are held on such platforms. Digital asset exchanges and custodians have historically been subject to cyberattacks, fraud, insolvency, operational failures, and regulatory enforcement actions.

Ownership and control of digital assets are generally determined by possession of cryptographic private keys or other access credentials. We rely on third-party custodians to safeguard control of our digital assets, including the management of private keys. If the private keys or access credentials associated with our digital assets that are held by those third-party custodians were lost, destroyed, compromised, misused, or otherwise became inaccessible, we could lose access to our digital assets permanently. Unlike traditional financial accounts, digital asset transactions are generally irreversible, and there may be no central authority capable of restoring access to lost assets. Any loss or theft of our digital assets, including as a result of the foregoing, could materially and adversely affect our financial condition.

If any exchange or custodial platform that holds our digital assets were to become insolvent, experience a security breach, suspend withdrawals, or otherwise fail to safeguard our assets, we could experience delays in accessing our digital assets or suffer a partial or total loss of those assets. In the event of an insolvency of a custodial platform, we may be treated as an unsecured creditor and may not recover the full value of our assets. In addition, exchanges and custodial platforms may impose withdrawal limits, suspend trading, or otherwise restrict transfers of digital assets during periods of market volatility or regulatory uncertainty. Such restrictions could limit our ability to access or liquidate our digital assets in a timely manner. These assets are not maintained in segregated wallets under our exclusive control and may be pooled with assets of other customers of such exchanges. Unlike bank deposits, digital assets held at exchanges are generally not insured by the Federal Deposit Insurance Corporation or any other governmental agency. We are exposed to counterparty risk if these exchanges experience financial difficulty, security breaches, cyberattacks, operational failures, regulatory enforcement actions, or become insolvent. The digital asset industry has experienced significant exchange failures and insolvencies, including the collapse of FTX Trading Ltd. in November 2022, which resulted in substantial losses for customers and creditors. If an exchange at which we hold digital assets were to fail, enter bankruptcy, or become subject to regulatory seizure, we may be unable to recover some or all of our digital assets, and any recovery could be subject to significant delays and uncertainty. The loss of digital assets held at such exchanges could materially and adversely affect our financial condition, results of operations, and the trading price of our common stock.

***Digital assets, including BNB, are subject to an evolving and uncertain regulatory landscape.***

Digital assets, including BNB, are subject to evolving and uncertain regulatory frameworks in the United States and internationally. The regulatory status of digital assets and related activities is subject to significant uncertainty, and regulations may vary significantly among jurisdictions. Changes in laws, regulations, or enforcement priorities by U.S. or foreign regulators, including the SEC, CFTC, FinCEN, state regulators, or international bodies, could adversely affect our ability to acquire, hold, transact in, or derive value from our digital asset holdings. In particular, if BNB or other digital assets we hold were to be classified as securities under U.S. federal or state laws, we could become subject to registration requirements under the Securities Act of 1933 or the Investment Company Act of 1940, which could impose significant compliance costs, restrict our ability to transact in such assets, or require us to dispose of our holdings. Anti-money laundering and know-your-customer regulations applicable to digital assets may become more stringent and could increase our compliance costs or limit our ability to transact in digital assets. Tax treatment of digital asset transactions is also subject to uncertainty and may change in ways that adversely affect our financial results. Any regulatory developments that restrict or prohibit our digital asset activities could have a material adverse effect on our business, financial condition, and results of operations.

***BNB could be determined to be a security under U.S. federal securities laws, which could materially affect the value and tradability of our digital assets.***

The regulatory status of many digital assets, including BNB, remains uncertain. Regulatory authorities in the United States and other jurisdictions have taken the position that certain digital assets may constitute securities under applicable law. If BNB were determined to be a security under U.S. federal securities laws, trading platforms that currently list BNB may be required to register as securities exchanges, broker-dealers or alternative trading systems, or they may cease offering trading in BNB. Any determination that BNB constitutes a security, or any enforcement action by regulatory authorities relating to BNB or trading platforms that support BNB trading, could significantly reduce the liquidity and market value of BNB. Such developments could make it more difficult for us to buy or sell or value BNB, could result in delistings of BNB from trading platforms, and could materially and adversely affect the value of our digital asset holdings and our financial condition.

***Adverse publicity or developments involving the Binance ecosystem could negatively affect the value of BNB.***

The market value of BNB may be influenced by the reputation and perceived stability of the broader Binance ecosystem, including entities associated with the development, promotion, or operation of platforms that support BNB or the BNB Chain network. Negative media coverage, regulatory actions, litigation, or other adverse developments involving such entities could negatively affect market sentiment toward BNB. Any loss of confidence in the Binance ecosystem could reduce demand for BNB, impair liquidity in markets for BNB, and negatively affect the value of our digital asset holdings.

***While we report substantial digital asset holdings, the liquidity of these assets may be limited by market conditions.***

As of January 31, 2026, we held digital assets with a fair value of $409.2 million. Although digital asset markets operate continuously, the liquidity of BNB and other digital assets may be limited during periods of market stress or volatility. Order book depth in digital asset markets may be insufficient to support large transactions without materially affecting market prices. Because we hold a substantial quantity of BNB, any attempt by us to sell a significant portion of our holdings could exert downward pressure on the market price of BNB. In addition, a significant portion of the outstanding supply of BNB may be held by a relatively small number of market participants, and sales by large holders could also adversely affect market prices. If market liquidity were to decline, we may be unable to liquidate our digital asset holdings at favorable prices or within desired timeframes. Large sales of BNB by us or other significant holders could adversely affect the market price of BNB, and we may not be able to liquidate our holdings without significant losses. We maintain fiat cash reserves of $11.3 million to support day-to-day operations, but these reserves represent a small fraction of our total assets and may be insufficient to fund our operations, capital expenditures, or other obligations if we are unable to liquidate our digital assets on acceptable terms. Any inability to convert our digital assets to fiat currency when needed could have a material adverse effect on our liquidity, financial condition, and ability to continue as a going concern.

***Fair value accounting for digital assets may cause significant volatility in our financial statements.***

Under applicable accounting standards, including ASC 350-60, digital assets such as BNB are measured at fair value, with changes in fair value recognized in earnings during each reporting period. As a result, fluctuations in the market price of BNB may result in significant unrealized gains or losses in our financial statements. These fair value adjustments may cause substantial volatility in our reported earnings and may not reflect the underlying performance of our operations. Investors may find it difficult to evaluate our financial performance because our results may be significantly affected by changes in the market price of BNB that are unrelated to our operating activities.

### Risks Related to Shareholder Rights Plan and Activist Investors

***Shareholder activism has caused and will continue to cause us to incur substantial costs and divert management’s attention and resources and could disrupt our operations and the trading price of our common stock.***

A stockholder of the Company, YZi Labs has launched a shareholder activism campaign against the Company . Among other public actions, YZi has filed preliminary consent materials indicating its intent to solicit consents of our stockholders to expand the size of our Board of Directors (the “***Board”***) and elect seven candidates identified by YZi Labs to fill the vacancies (the “***Consent Solicitation”***). In addition, YZi Labs has indicated its intent to nominate candidates at the Company’s next annual meeting of stockholders.

On March 13, 2026, the Company received a letter from YZi Labs Management Ltd. (“YZi Labs”) that requested that the Company fix a record date for determining the stockholders entitled to consent to (1) repeal any provision of the Company’s Amended and Restated Bylaws (the “Bylaws”), in effect at the time such proposal becomes effective, including any amendments thereto, which were not included in the Bylaws that were in effect and were filed with the SEC on July 25, 2025, (2) increase the size of the Board by seven (7) directors to thirteen (13) directors in total pursuant to Article II, Section .02 of the Bylaws, (3) amend Article II, Section .04 of the Bylaws to clarify and affirm stockholders’ ability to fill vacancies on the Board, including those resulting from an increase in the size of the Board by the vote or written consent of the Company’s stockholders or by court order, and (4) elect YZi Labs’ seven (7) nominees: Max S. Baucus, David J. Chapman, Teresa Marie Goody Guillén, Jiajin “Jane” He, Alex Odagiu, Matthew Roszak and Ling “Ella” Zhang, to serve as directors of the Company. The Board will review YZi Labs’ letter to evaluate its validity under the Bylaws, and if such letter is valid the Company will disclose the record date for determining the stockholders entitled to consent to YZi Labs’ proposals.

While we welcome input from all our stockholders, including YZi Labs, and desire to have a constructive relationship with them as our largest stockholder and a key business partner, YZi Labs’ campaign has adversely affected and may continue to adversely affect our business.

Our business has been negatively affected and the trading price of our common stock could be negatively affected by YZi Labs’ campaign because, among other things:

- responding to YZi Labs’ campaign has required and may continue to require substantial attention from our Board and management team that has distracted and may continue to distract their attention from our operations and strategic plans, which has disrupted and may continue to disrupt our operations;
- responding to YZi Labs’ campaign and managing the resulting impact on the Company has required us to engage legal, strategic and communications advisors, the costs of which have been and may continue to be significant and could negatively impact our financial results;
- YZi Labs’ campaign has created and may continue to create perceived uncertainties as to our future direction, strategy or leadership and may result in the loss of potential business opportunities, make it more difficult to attract and retain qualified directors, executives, other employees, investors and commercial and financial providers, and cause our stock price to experience periods of volatility or stagnation;
- claims made by YZi Labs have and may continue to harm our reputation, damage our relations with employees, investors and commercial and financial providers, or otherwise impair our business; and
- a deterioration in our relationship with YZi Labs, whose affiliates were involved in the creation of BNB and the BNB Chain, and who we believe continues to hold substantial amounts of BNB, could negatively impact our digital asset treasury strategy or damage our reputation and be an impediment to potential relationships or opportunities involving BNB.

In addition, if YZi Labs is successful in expanding the size of the Board and electing YZi Labs’ nominees to a majority of the Board seats, it may impact our business strategy and operations, and may result in a default, acceleration or result in other consequences under certain of our debt instruments, equity plans, employment agreements, and other agreements, which could negatively affect our business and the trading price of our common stock.

We cannot assure you as to the outcome or timing of any matters relating to actions by YZi Labs and our responses thereto or the ultimate impact on our business, results of operations or financial condition.

***Our Stockholder Rights Plan could delay or prevent a change of control, which could limit the market price of our common stock.***

On December 26, 2025, the Board of Directors adopted a stockholder rights plan (the “Rights Plan”), which is currently scheduled to expire on December 26, 2026. While in force or if otherwise extended, the Rights Plan may have certain anti-takeover effects. Specifically, the rights issued pursuant to the Rights Plan will cause substantial dilution to a person or group that acquires beneficial ownership of more than a specified percentage of our outstanding common stock without the prior approval of our Board of Directors. The Rights Plan is not intended to interfere with any merger or other business combination approved by the Board, but the Rights Plan may deter certain parties from pursuing strategic transactions involving us, including potential acquisitions.

Filed Mar 16, 2026.
Source: SEC EDGAR, the filing index for accession 0001493152-26-010296. Last ingested by Listed: Nov 5, 2026, 11:08 ET. No prices; not investment advice.