BNB PLUS CORP.

Item 1 - Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTE A — NATURE OF THE BUSINESS

BNB Plus Corp. (formerly Applied DNA Sciences, Inc.) (the “Company”) is a digital asset treasury company that has adopted BNB, the native cryptocurrency of the Binance blockchain ecosystem as its primary reserve asset. By using proceeds from financings, as well as potential cashflow from the Company’s operations, the Company seeks to strategically accumulate BNB and utilize the accumulated BNB as a productive treasury asset to produce yield via Binance native and other decentralized (“DEFi”) finance opportunities (“BNB Strategy”). 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 the Company’s LineaRx, Inc. subsidiary (“LineaRx”), it is commercializing proprietary nucleic acid production solutions for the biopharmaceutical and diagnostics markets. The Company’s 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.

Historically, the Company has operated intwo additional business markets: (i) the manufacture and detection of DNA for industrial supply chains and security services (“DNA Tagging and Security Products and Services”), which the Company is in the process of winding down; and (ii) the detection of DNA and RNA in molecular diagnostics and genetic testing services (“MDx Testing Services”), which the Company exited on June 30, 2025.

On September 16, 2002, the Company was incorporated under the laws of the State of Nevada. Effective December 2008, the Company reincorporated from the State of Nevada to the State of Delaware.

Company Restructuring and Stock Splits

On October 6, 2025, the Company’s Board of Directors authorized, and its officers implemented, a restructuring plan pursuant to which the Company reduced overall operating expenses to focus resources on its BNB Strategy. The restructuring plan included a reduction of the Company’s workforce by sixteen (16) employees, or approximately 60%. During June 2026, the Company further reduced its workforce by two (2) employees and as of June 30, 2026, the Company has a total of 9 employees. The Company incurred aggregate pre-tax charges in connection with the reduction-in-force, primarily consisting of severance payments, employee benefits, and related costs. The reduction-in-force was substantially completed by December 31, 2025 and associated charges of approximately $183 thousand and $1.6 million were recorded in the three and nine months ended June 30, 2026, respectively.

On March 13, 2025, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment of its Certificate of Incorporation that effected aone-for-fifty (1:50) reverse stock split of its common stock, effective at 12:01 a.m. Eastern Time on March 14, 2025 (the “March 2025 Reverse Split”). In addition, on June 1, 2025, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment of its Certificate of Incorporation that effected aone-for-fifteen (1:15) reverse stock split of its common stock effective at 12:01 a.m. Eastern Time on June 2, 2025 (the “June 2025 Reverse Split”) (collectively the “2025 Reverse Splits”).

All warrant, option, share, and per share information in these financial statements gives retroactive effect to the 2025 Reverse Splits.

NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

Interim Financial Statements

The accompanying condensed consolidated financial statements as of June 30, 2026, and for the three and nine-months ended June 30, 2026 and 2025, are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Regulation S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.

Interim Financial Statements continued

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended September 30, 2025 and footnotes thereto included in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission (“SEC”) on December 22, 2025. The condensed consolidated balance sheet as of September 30, 2025 contained herein has been derived from the audited consolidated financial statements as of September 30, 2025 but does not include all disclosures required by GAAP.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, APDN (B.V.I.) Inc., Applied DNA Sciences India Private Limited (which currently has no operations), Applied DNA Clinical Labs, LLC (“ADCL”) (see Discontinued Operations below), Spindle Biotech, Inc., Applied DNA Sciences Europe Limited (which currently has no operations) and its majority-owned subsidiary, LineaRx, Inc. (“LRx”). Significant inter-company transactions and balances have been eliminated in consolidation.

On October 19, 2025, the Company formed Build & Build, LLC, a Delaware limited liability company and a 100% owned subsidiary of the Company (“Build & Build”), in connection with the Company’s BNB Strategy. Pursuant to its BNB Strategy, Build & Build is used to house certain of the cryptocurrency assets of the Company.

On November 26, 2025, the Company formed BNBX Ltd., a British Virgin Islands business company and a 100% owned subsidiary of the Company. Pursuant to the Company’s BNB Strategy, BNBX Ltd. is used to house certain of the Company’s cryptocurrency assets.

Liquidity and Management’s Plan

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 gross proceeds. 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 defined 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.

Discontinued Operations

The condensed consolidated financial statements separately report discontinued operations and the results of continuing operations (see Note K). All footnotes exclude discontinued operations unless otherwise noted.

Use of 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 significant estimates include revenue recognition, 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, contingencies, and management’s anticipated liquidity. Management reviews its estimates on a regular basis and the effects of any material revisions are reflected in the condensed consolidated financial statements in the period they are deemed necessary. Accordingly, actual results could differ from those estimates.

Revenue Recognition

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codifications (“ASC”), Revenue Recognition (“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.

Authentication Services

The Company recognizes revenue for authentication services upon satisfying its promises to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company services are complete, which in nearly all cases is when the authentication report is released to the customer.

Revenue Recognition continued

Research and Development Services

The Company’s revenues 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.

Disaggregation of Revenue

The following table presents revenues disaggregated by our business operations and timing of revenue recognition:

The following table presents revenues disaggregated by our business operations and timing of revenue recognition:

Contract balances

As of June 30, 2026, the Company has entered into contracts with customers for which revenue has not yet been recognized. Consideration received from a customer prior to revenue recognition is recorded to a contract liability and is recognized as revenue when the Company satisfies the related performance obligations under the terms of the contract. The deferred revenue as of June 30, 2026 consists of authentication services under a contract where consideration has been received and the services have not been fully performed. The Company’s contract liabilities, which are reported as deferred revenue on the condensed consolidated balance sheet as of June 30, 2025, consisted almost entirely of research and development contracts where consideration has been received and the development services had not yet been performed, as well as authentication services under contracts where consideration had been received and the services had not been fully performed.

Revenue Recognition continued

The opening and closing balances of the Company’s contract liability balances are as follows:

For the three and nine months ended June 30, 2026, the Company recognized$0 and$12,285 of revenue that was included in Contract liabilities as of October 1, 2025.

The opening and closing balances of the Company’s contract asset balances are as follows:

Cash, Cash Equivalents, and Restricted Cash

For the purpose of the accompanying condensed consolidated financial statements, all highly liquid investments with a maturity of three months or less from when purchased are considered to be cash equivalents. The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows.

Inventories

Inventories, which consist primarily of raw materials, work in progress and finished goods, are stated at the lower of cost or net realizable value, with cost determined by using the first-in, first-out (FIFO) method.

Net Loss Per Share

The Company presents net loss per share utilizing a dual presentation of basic and diluted loss per share. Basic loss per share includes no dilution and has been calculated based upon the weighted average number of common shares outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon the exercise of the Company’s stock options, restricted stock units and warrants.

As disclosed in Note G below, as part of the October 2025 Private Placement, the Company issued pre-funded warrants to purchase shares of common stock at an exercise price of $0.0001 per share. These warrants are exercisable and have no expiration date. As the exercise price is negligible and the warrants are exercisable for little or no cash consideration, the shares underlying the pre-funded warrants are considered outstanding and are included in the weighted-average number of shares used to calculate basic and diluted net loss per share for the three and nine months ended June 30, 2026.

Net Loss Per Share continued

The Company's Series B-1 and B-2 Preferred Stock are considered a participating security under ASC 260; however, because the Series B-1 and B-2 Preferred Stock has no contractual obligation to participate in the Company's losses, no portion of the Company's net loss for the three and nine months ended June 30, 2026 was allocated to the Series B-1 Preferred Stock under the two-class method. In computing net loss available to common stockholders, the Company deducted cumulative dividends on the Series B-1 and Series B-2 Preferred Stock of $19,634 for the period, whether or not declared.

The following table presents the calculation of weighted-average shares used in computing basic and diluted net loss per share for the indicated periods ended June 30, 2026:

Securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the three and nine months ended June 30, 2026 and 2025 are as follows:

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 third-party exchanges to facilitate trading activities. Assets held on these exchanges are maintained in accounts under the Company’s exclusive control. The Company also transfers certain BNB tokens to third-party custodians in connection with written call option arrangements. Under these arrangements, legal title to the transferred tokens passes to the custodian, who retains rehypothecation rights over the tokens. As the Company does not retain control over these transferred tokens, such tokens are derecognized from the Company’s digital assets balance upon transfer. The Company records a receivable representing its contractual right to receive equivalent BNB tokens upon expiration of the underlying call option. The receivable is measured at the fair value of the underlying BNB tokens at each reporting date, with changes in fair value recognized in net loss consistent with the Company’s digital asset fair value policy.

Digital Assets continued

The activity from remeasurement of digital assets at fair value is reflected in the condensed consolidated statements of operations within loss from change in fair value of digital assets. Remeasurement of the BNB receivable from custodians is similarly reflected within loss

from change in fair value of digital assets as an unrealized gain/loss. Realized gains and losses from the derecognition of digital assets, including transfers to custodians that meet the criteria for derecognition, are included in the realized loss from change in fair value of digital assets (see Note D). Although the Company has not disposed of any digital assets during the reporting period, other than transfers to custodians in connection with written call option arrangements, as described above, 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.

The digital asset receivable balance is evaluated for credit losses in accordance with ASC 326, Financial Instruments – Credit Losses. The allowance for credit losses on digital asset receivables under the current expected credit loss (“CECL”) model is determined by utilizing the probability of default (“PD”) loss given default (“LGD”) approach. At June 30, 2026, the Company did not record an allowance for credit losses as it was deemed insignificant to the financial statements as a whole.

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.

Derivative Instruments

The Company uses derivative instruments, including call option contracts to manage exposure to price fluctuations and to generate yield on its digital asset holdings. All of the Company’s call option contracts are for 4 weeks or less and are considered short-term. The Company accounts for these call option contracts in accordance with ASC 815. The derivatives are recognized on the condensed consolidated balance sheet at fair value. The Company recognized $40,272 and $61,845 for the three and nine months ended June 30, 2026, as a realized gain on its covered call option contracts.

Concentrations

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and cash equivalents with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. As of June 30, 2026, the Company had cash and cash equivalents of $3.5 million in excess of the FDIC insurance limit.

The Company’s revenues earned from the sale of products and services for the three months ended June 30, 2026 was 93% fromone customer within the Therapeutic DNA Production Services segment. The Company’s revenue earned from the sale of products and services for the nine months ended June 30, 2026 was 83%, fromone customer within the Therapeutic DNA Production Services segment.

The Company’s revenues earned from sale of products and services for the three months ended June 30, 2025 included an aggregate of 53% and 12% fromtwo customers within the Therapeutic DNA Production Services and the DNA Tagging and Security Products and Services segments, respectively. The Company’s revenue earned from the sale of products and services for the nine months ended June 30, 2025 included an aggregate of 26% fromone customer within the Therapeutic DNA Production Services segment, and 23%, and 12%, fromtwo customers, respectively, within the DNA Tagging and Security Products and Services segment.

Three customers accounted for 94% of the Company’s accounts receivable at June 30, 2026 andthree customers accounted for 99% of the Company’s accounts receivable at September 30, 2025.

Offering Costs

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. Offering costs consist principally of professional and underwriting fees incurred. Accordingly, in relation to the ATM (See Note G), offering costs in the aggregate of $296,826 were incurred, and were recorded to deferred offering costs on the condensed consolidated balance sheet as of June 30, 2026.

Segment Reporting

Historically, the Company operated inthree reportable segments: (1) Therapeutic DNA Production Services; (2) MDx Testing Services; and (3) DNA Tagging and Security Products and Services. As a result of the strategic restructuring during the fiscal year ended September 30, 2025, regarding the closure of its clinical laboratory, effective June 27, 2025, the Company’s MDx Testing Services segment is being reported in discontinued operations. Also, as a result of launching the Company’s DAT strategy in October 2025, the Company has added a new reportable segment; Digital Asset Treasury. Resources are allocated by the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) whom, collectively, the Company has determined to be its Chief Operating Decision Maker (“CODM”). The following is a brief description of the Company’s reportable segments.

**Digital Asset Treasury —**Segment operations consist of managing the Company’s digital assets and implementing its DAT strategy.

**Therapeutic DNA Production Services —**Segment operations consist of the Company’s nucleic-acid production solutions for the biopharmaceutical and diagnostics industries including LineaDNA, LineaRNAP and LineaIVT.

DNA Tagging and Security Products and Services — Segment operations consist of the manufacture and detection of DNA for industrial supply chains and security services. As discussed above, on February 13, 2025, the Company announced it was exiting its DNA Tagging and Security Products and Services business segment. The Company continues to strategically exit contracts relating to this segment and currently plans to continue to service certain of its existing DNA Tagging and Security Products and Services customer contracts.

The Company evaluates the performance of its segments and allocates resources to them based on revenues and operating income (losses). Operating income (loss) includes intersegment revenues, as well as a charge allocating all corporate headquarters costs. Since each vertical has shared employee resources, payroll and certain other general expenses such as rent, and utilities were allocated based on an estimate by management of the percentage of employee time spent in each vertical. Segment assets are not reported to, or used by, the CODM to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed.

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.

Fair Value of Financial Instruments

The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related asset or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities.

The Company utilizes observable market inputs (quoted market prices) when measuring fair value whenever possible.

The Company’s BNB are held by its wholly-owned subsidiaries; Build & Build, LLC and BNBX, Ltd.. The Company has designated a principal market for BNB based on the market that it has access to and has the greatest volume and level of orderly transactions for BNB. The Company reassesses its principal market when facts and circumstances change, including but not limited to when new markets become accessible, or the volume/activity in the current principal market declines. Because BNB trades continuously across global markets, the Company applies a consistent valuation cut-off at midnight UTC on the reporting date to determine fair value.

The Company’s digital assets are measured at fair value on a recurring basis using quoted prices in its principal market (Level 1 inputs) as of the reporting date.

The Company’s OBNB Trust Units are measured at fair value on a recurring basis using quoted prices in its principal market (Level 1 inputs) as of the reporting date.

The Company’s call option contracts are measured at fair value on a recurring basis using industry-standard models (Black-Scholes) with observable market inputs such as spot prices and implied volatility (Level 2 inputs).

The Company's Series B-2 Prefunded Warrants are classified as liability and are measured at fair value on a recurring basis using an option pricing model (Level 3 inputs), as no observable market exists for the Series B-2 Preferred Stock issuable upon exercise.

The Company's Series B-1 Preferred Stock and Series B-2 Preferred Stock were measured at fair value on a nonrecurring basis as of their respective issuance dates using an option pricing model or similar valuation technique (Level 3 inputs), as no observable market exists for either series.

For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, which reports to the CFO, determine its valuation policies and procedures.

As of June 30, 2026, there were no transfers between Levels 1, 2 and 3 of the fair value hierarchy.

Recent Accounting Standards

In May 2025, the FASB issued ASU 2025-03,Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. This standard clarifies the guidance in determining the acquirer in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business. The amendments require that an entity consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. This guidance is effective for fiscal years beginning after December 15, 2026, and therefore will be effective beginning with the Company’s financial statements issued for the fiscal year ending September 30, 2028, with early adoption permitted. The amendments are required to be applied prospectively to any acquisition transaction that occurs after the initial application date. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, that enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied prospectively with the option of retrospective application. The Company adopted this ASU as of October 1, 2025. The adoption of this ASU did not have a significant impact on its disclosures.

NOTE C — INVENTORIES

Inventories consist of the following:

NOTE D — DIGITAL ASSETS

The following table sets forth for the units held, costs basis, and fair value of digital assets held, as shown on the condensed consolidated balance sheet as of June 30, 2026:

Cost basis is equal to the cost of the digital asset, net of any transaction fees, if any, at the time of purchase or upon receipt. Digital assets are measured at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement, using a quoted price in active markets (Level 1 inputs). Fair Value presents the quoted prices on a principal market at midnight UTC on the measurement date.

NOTE D — DIGITAL ASSETS, continued

The following table summarizes the Company's digital asset holdings as of:

During the nine months ended June 30, 2026, the Company transferred 6,077 BNB tokens to Hex Trust in connection with a written call option arrangement. Under the terms of the custody agreement, legal title to the tokens transferred to the custodian, who retains rehypothecation rights. The Company retains the right to receive equivalent tokens upon expiration of the underlying option. Accordingly, the BNB tokens have been derecognized and a receivable has been recorded representing the Company's right to the return of equivalent tokens. During the nine months ended June 30, 2026, the Company recorded $2,496,609 as a realized loss for the derecognition of the digital assets that were transferred to the custodian. During the three and nine months ended June 30, 2026, the Company recorded $369,635 as an unrealized loss for the change in fair value of the receivable. These amounts are included in Loss from change in fair value of digital assets in the accompanying condensed consolidated statement of operations.

NOTE E — INVESTMENT IN DIGITAL ASSET TRUST

Investment in digital asset trust measured at fair value consist of the following as of June 30, 2026:

The following table summarizes the Company's OBNB Trust Units investment holdings as of:

NOTE F — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities are as follows:

NOTE G — CAPITAL STOCK

Nasdaq Ticker Change

Effective October 7, 2025 the Company changed its ticker symbol on the Nasdaq Capital Market from “APDN” to “BNBX”.

Nasdaq Delisting

On July 13, 2026, the Company received a delisting determination from a Nasdaq Hearing Panel based on the Company's failure to maintain the minimum $1.00 bid price requirement under Nasdaq Listing Rule 5550(a)(2). Trading in the Company's common stock on The Nasdaq Stock Market was suspended at the open of trading on July 14, 2026. The Company has transitioned to trading on the OTCQB Venture Market operated by OTC Markets Group under the unchanged ticker symbol "BNBX" (the “Delisting Determination”). The Company filed a request for the Nasdaq Listing and Hearing Review Council to review the Delisting Determination, which is currently pending. See Note L for additional information.

At the Market Offering

On November 4, 2025 the Company entered into an At The Market Offering Agreement (the “ATM”) with Lucid Capital Markets, LLC, as sales agent (the “Agent”), pursuant to which the Company may, from time to time, offer and sell shares of its common stock with an aggregate offering price of up to $8,157,932 through the Agent. Subject to the terms and conditions of the Agreement, the Agent will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has no obligation to sell any of the Shares, and may at any time suspend sales under the Agreement or terminate the Agreement in accordance with its terms. The Company has provided the Agent with customary indemnification rights. The Agreement contains customary representations and warranties, and the Company is required to deliver customary closing documents and certificates in connection with sales of the Shares. During the three and nine months ended June 30, 2026, the Company sold 1,184,957 and 1,195,716 shares of common stock for net proceeds of $853,548 and $885,339, after deducting commissions of $26,399 and $27,382, respectively.

May 2026 Private Placement Offered Shares

During the three months ended June 30, 2026, the Company completed two private placements: a SPA Private Placement on May 28, 2026 and on July 20, 2026 (see the Subsequent events footnote below) (the “SPA Private Placement”), and an Inducement Private Placement on June 30, 2026 (the “Inducement Private Placement and collectively the “May 2026 Private Placement”).

In connection with the SPA Private Placement, we entered into the Securities Purchase Agreement and joinders to the Securities Purchase Agreement with a Selling Stockholder, pursuant to which we sold and issued to the Selling Stockholder, at an offering price of $1.05 per share,2,380,953 shares of Series B-1 Preferred, each of which is convertible intoone 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 1.5 x 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, the Company entered into the Inducement Private Placement via Warrant Inducement and Exchange Agreements (the "Inducement Agreements") with five Selling Stockholders that participated in its October 2025 Private Placements. 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 the Company 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 (including the 461,318 shares issued upon the exercise of the Series E Warrants and 1,000,005 shares that were issued in the October 2025 Private Placement) 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 forone share of Series B-2 Preferred at an exercise price of $0.0001 per share. The 1,461,318 shares of Common Stock that were exchanged in the Inducement Private Placement were retired from the Company’s outstanding Common Stock. The Series B-2 Preferred carries a liquidation preference of 1.0 x 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 intoone 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, the Company received $4.26 million in aggregate gross proceeds.

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 ofthree years from the date of issuance and may also be exercised on a cashless basis at any time beginningsix 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.

The Series B-1 and B-2 Preferred Stock have been classified as temporary equity because, upon the occurrence of a Fundamental Transaction or a Redemption Event (each as defined in the applicable Certificate of Designations), the Company may be required to settle the Series B-1 or B-2 Preferred Stock, as applicable, for cash in a manner that is not solely within the Company control. A Redemption Event includes the occurrence of a Fundamental Transaction, a Delisting Event, a Treasury Value Event, a Warrant Ratchet Event, or an Event of Default, in each case as defined in the applicable Certificate of Designations.

The Series B-2 Pre-Funded Warrants have been classified as a liability. Although the Series B-2 Pre-Funded Warrants are a warrant to purchase shares rather than an outstanding share themselves, the shares of Series B-2 Preferred Stock issuable upon their exercise are contingently redeemable for cash outside the Company's control (see discussion of the Series B-1 and Series B-2 Preferred Stock above). A warrant on shares that are redeemable outside the issuer's control is required to be classified as a liability under ASC 480-10-25-8, even where the underlying redemption feature is conditional on a defined contingency. Accordingly, the Series B-2 Pre-Funded Warrants are recognized as a liability, initially and subsequently measured at fair value, with changes in fair value recognized in earnings each reporting period. As of June 30, 2026, the fair value of the Series B-2 Pre-Funded Warrant liability was $1,059,604. See Note L, Fair Value Measurements, for the valuation methodology and significant inputs used.

The Company accounted for the Inducement Private Placement as an extinguishment of the equity instruments surrendered by the Selling Stockholders (i.e., the shares of Common Stock, the Series E Warrants exercised, and the October Pre-Funded Warrants exchanged), by analogy to the guidance in ASC 505-30 governing repurchases of an entity's own equity instruments. The Series B-1 Preferred Stock, Series B-2 Preferred Stock, and Series B-2 Pre-Funded Warrants issued in the transaction were measured at their respective fair values as of the Closing Date and treated collectively as the consideration transferred to extinguish the surrendered instruments. An amount equal to the fair value of the equity instruments surrendered immediately prior to the transaction, net of cash proceeds received, was recognized as a reduction of additional paid-in capital. Because the aggregate fair value of the consideration issued exceeded the fair value of the instruments surrendered, and because the transaction was negotiated with, and consummated on a non-pro-rata basis with, a discrete group of Selling Stockholders rather than effected pro rata with the Company's stockholders generally, the excess of $1,439,652 ** **was recognized as an expense in the condensed consolidated statements of operations for the three and nine months ended June 30, 2026. See Note L, Fair Value Measurements, for the valuation methodology and significant inputs used.

As of June 30, 2026, the Company had accrued dividends of $19,634 associated with Series B-1 and Series B-2 Preferred Stock. These accrued dividends were recorded as a reduction to additional paid in capital, as the Company has an accumulated deficit and no retained earnings against which to charge such dividends.

Guaranty Agreement

In connection with the Securities Purchase Agreement and the Inducement Agreements, 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 (each a “DAT Subsidiary”) agreed to enter into a guaranty agreement (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 Series B-2 Pre-Funded 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 Series B-2 Pre-Funded 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:

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.

In addition to certain covenants and restrictions set forth in the DATS Guaranty, the DAT Subsidiaries have agreed to comply with the “Digital Asset Treasury Procedures”, which means the procedures governing the management, custody, transfer, and disposition of assets held in the Digital Asset Treasury, as defined in the DATS Guaranty, to be set forth in a separate instrument agreed upon by the Company and the holders representing a majority of the outstanding shares of Series B-1 Preferred, not later than thirty (30) days following the Initial Closing of the Securities Purchase Agreement, which shall include both (a) the initial procedures for the establishment and contribution of assets to the Digital Asset Treasury and (b) ongoing procedures for the maintenance, monitoring, and administration thereof

The DATS Guaranty will terminate when all Guaranteed Obligations have been satisfied in full and no shares of Preferred Stock remain outstanding.

In conjunction with the May 2026 Private Placement, we entered into a strategic advisory engagement with GlobalStake Infrastructure, LLC ("GlobalStake"), a Delaware limited liability company, effective June 17, 2026. Under the engagement, GlobalStake will conduct a comprehensive strategic review of our business, assets, and capital structure over an initial four-month term. The review will be led by Richard Shorten, Founder of Silvermine Capital Advisors, LLC and Chairman of GlobalStake, who brings more than 30 years of experience across institutional finance, corporate law, and digital asset sectors. We paid GlobalStake a pre-paid advisory fee of $300,000 for the initial term. GlobalStake is affiliated with Comstock MultiChain Fund, LP, a current shareholder of the Company and participant in the May 2026 Private Placement.

October 2025 Private Placement Offering

The Company completed two private placements: a Cash Private Placement on October 3, 2025, and a Cryptocurrency Private Placement on October 21, 2025 (collectively the “ October 2025 Private Placement”).

In Cash Private Placement, the Company issued 4,620,485 shares of the Company’s common stock and/or pre-funded warrants in lieu thereof at an offering price of $3.32 per share, to purchase shares of the Company’s common stock at a per share exercise price of $0.0001 (the “Cash Pre-Funded Warrants”), and anequal number of Series E-1 Warrants (the “Series E-1 Warrants”) to purchase shares of our common stock at a per share exercise price of $3.82.

In the Cash Private Placement, consideration included U.S. dollars or the cryptocurrency stablecoin issued by Circle Internet Group, Inc. commonly referred to as “USDC” paid to the Company as consideration for the Shares and/or Cash Pre-Funded Warrants and the Series E-1 Warrants. In the Cryptocurrency Private Placement, the Cryptocurrency Purchasers tendered units of Osprey BNB Chain Trust (OTCMKTS: OBNB) as consideration, with the Company receiving 0.126 units per Cryptocurrency Pre-Funded Warrant together with accompanying Series E-2 Warrant sold. Lucid Capital Markets acted as sole placement agent for the Private Placement.

In the Cryptocurrency Private Placement, the Company issued 3,444,191 pre-funded warrants (“the Cryptocurrency Pre-Funded Warrants” and together with the Cash Pre-Funded Warrants, the “Pre-Funded Warrants”) at an offering price of $3.32 per share, to purchase the Company’s common stock at a per share exercise price of $0.0001 per share and anequal number of Series E-2 Warrants (the “Series E-2 Warrants” and, together with the Series E-1 Warrants, the “Series E Warrants”) to purchase shares of common stock at a per share exercise price of $3.82. The Series E Warrants and the Pre-Funded Warrants were classified as equity in the accompanying condensed consolidated balance sheet.

The Company received a total of $24.9 million in net proceeds after deducting placement agent fees and offering costs, which consisted of $7.6 million in cash, net of placement agent fees and offering costs, $5.9 million in USDC and $11.4 million in OBNB Trust Units

The Pre-Funded Warrants are exercisable at $0.0001 per share, and the Series E Warrants are exercisable at $3.82 per share over afive-year term and expire on October 3, 2030. Exercise of the Cryptocurrency Pre-Funded Warrants was contingent upon obtaining stockholder approval and the delivery of unencumbered subscription funds. Stockholder Approval was obtained on December 12, 2025.

The Company entered into registration rights agreements with the accredited investors, committing to file an SEC registration statement for the resale of the securities within 30 days of the closing dates. In compliance with the Registration Rights Agreements, the Company filed the required resale registration statement on October 30, 2025 and it was declared effective by the SEC on December 29, 2025. Lucid Capital Markets acted as the sole placement agent.

During the three and nine months ended June 30, 2026,344,802 and 1,446,802, respectively, of the Pre-Funded Warrants were exercised.

Strategic DAS Agreement

In connection with the Private Placement, on September 29, 2025, the Company entered into a Strategic Digital Assets Services Agreement (the “Strategic DAS Agreement”) with Cypress LLC, a Puerto Rico limited liability company, and a related party (the “Services Provider”), pursuant to which the Company appointed the Services Provider to provide discretionary asset management services (i) in compliance with the Company’s BNB Strategy, (ii) with respect to any other cryptocurrency or digital asset strategies subject to the Company’s approval, in each case, solely with respect to the Account Assets (as defined below) in the accounts or cryptocurrency “wallets” identified by the Company after consultation with the Services Provider.

As set forth in the Strategic DAS Agreement, the Company agreed to pay to the Services Provider a fixed-rate management fee accrued and payable monthly (prorated for partial months) in arrears, equal to 1/12 of 1.25% per annum multiplied by the net asset value of the Account as of the last day of each month, before taking into account the estimated accrued incentive fee (as described below), if any. The management fee was payable within fifteen days of the Company’s receipt of an invoice from the Services Provider after the end of each month. In addition, the Company agreed to pay to the Services Provider an incentive fee for each Incentive Period (as defined in the Strategic DAS Agreement) relating to the Account equal to 10% on net returns, multiplied by the amount, if any, by which the increase in net asset value of the Account during such Incentive Period (excluding any amounts contributed to or withdrawn from the Account during such Incentive Period) exceeded the sum of (x) net asset value for the Account as of the later of the effective date of September 29, 2025 and the last time an incentive fee was paid in respect of the Account and (y) the aggregate management fees, to the extent not included in the calculation of net asset value, to Services Provider during such Incentive Period.

The Strategic DAS Agreement had an initial term offive years.

Both Joshua Kruger, the Chairman of the Company’s Board of Directors, and Patrick Horsman, the Company’s Chief Investment Officer are affiliates of Cypress LLC.

During the three and nine months ended June 30, 2026, the Company incurred $17 thousand of expenses under this agreement.

Strategic Advisor Agreement

In connection with the October 2025 Private Placement, on September 29, 2025, the Company entered into a Strategic Advisor Agreement with Cypress Management LLC, a Puerto Rico limited liability company (the “Strategic Advisor”), and a related party, pursuant to which the Company appointed the Strategic Advisor to provide strategic advice, guidance and technical advisory services relating to the Company’s business, operations, growth initiatives and industry trends in the crypto technology sector for an initial term offive years.

Pursuant to the terms of the Strategic Advisor Agreement, the Company was to pay a monthly fee of $60,000 to the Strategic Advisor and issued to the Strategic Advisor five-year warrants to purchase shares of our common stock (the “Advisory Warrants”) in an aggregate amount equal to 1,986,634 shares of our common stock with an exercise price of $3.82 per share.

Both Joshua Kruger, the Chairman of the Company’s Board of Directors, and Patrick Horsman, the Company’s Chief Investment Officer are affiliates of Cypress LLC.

During the three and nine months ended June 30, 2026 the Company incurred $180,000 and $540,000 in fees under the Strategic Advisor Agreement, respectively. The Company also recorded $7,985,569 for the fair value of the Advisory Warrants, which was included in consulting expense for the nine months ended June 30, 2026.

CypressSettlement* Agreement*

On July 23, 2026 (the “Termination Date”), the Company and JR Pasch, Joshua Kruger, the former Chairman of the Company’s board of directors, Patrick Horsman, the Company’s former Chief Investment Officer, Cypress Management LLC, and Cypress LLC (collectivelythe “Cypress Parties”) entered into a Termination, Standstill, and Mutual Release Agreement (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 Strategic Advisor Agreement, and a Consulting Agreement between us and Mr. Horsman dated October 1, 2025.

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 intwelve 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 intwelve 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.

Consulting Arrangements

In order to support the implementation of its BNB-focused treasury strategy, on September 23, 2025, the Company entered into consulting arrangements with Ground Tunnel Capital LLC (the “Consultant”) and an additional consulting agreement (collectively, the “Consulting Arrangements”) with the Consultant, pursuant to which the Company (i) engaged the Consultant to provide certain advisory and marketing services and (ii) will receive premium sponsorship benefits at all SkyBridge Alternatives Conference (“SALT”) conferences globally for a period ofthirty-six months. The Consulting Arrangements have a term ofthree years and shall terminate on September 23, 2028. Pursuant to the Consulting Arrangements, the Consultant shall be paid a fee of (a) $1,000,000 and (b) $250,000 paid quarterly from December 2025 until September 2027. In addition, immediately following the closing of the Cash Private Placement, the Consultant received Consultant Warrants (the “Consultant Warrants”) exercisable for a number of shares of common stock equal to 1% of the fully diluted outstanding equity of the Company as of immediately following the closing of the Private Placement. The exercise price per share of the Consultant Warrants is equal to $3.82 and the Consultant Warrants have a term offive years from the date of issuance.

The Company recorded $840,585 for the fair value of the Consultant Warrants, which was included in consulting expense for the nine months ended June 30, 2026.

Chief Investment Officer

On October 1, 2025, Patrick Horsman, a principal of the Cypress Digital, was appointed as the Chief Investment Officer of the Company. In connection with the Cypress Settlement Agreement Mr. Horsman ceased to serve as our Chief Investment Officer effective as of the Termination Date, as detailed above. Prior to the Termination Date, Mr. Horsman received monthly compensation of $29,167 for serving as the Company’s Chief Investment Officer but was not an executive officer of the Company. Mr. Horsman is a principal of the Patrick Horsman IRA Investment Trust, which was a purchaser in the October 2025 Private Placement. Mr. Horsman is also a member of the Cypress Strategic Advisor, which together with its affiliates provided services to the Company for compensation of approximately $720,000 on an annual basis prior to the Cypress Settlement Agreement.

The Company recorded $92,722 and $298,927, respectively, in consulting and travel expenses under this agreement for the three and nine months ended June 30, 2026.

NOTE H — WARRANTS, STOCK OPTIONS and RESTRICTED STOCK UNITS

Warrants

The following table summarizes the changes in warrants outstanding. These warrants were granted as part of financing transactions, as well as in lieu of cash compensation for services performed or as financing expenses in connection with the sales of the Company’s common stock.

During the nine months ended June 30, 2026,142,608 of the May 2024 Series A Warrants were exercised for proceeds of $731,764.

Stock Options

On December 12, 2025, at a special meeting of stockholders, the Company’s stockholders approved an amendment to the Company’s 2020 Equity Incentive Plan to increase the number of authorized shares of common stock reserved for issuance by 5,000,000 shares.

During the nine months ended June 30, 2026, the Company granted 724,018 stock options.462,227 of the options were granted to directors and have a strike price of $0.69 and vest 25% immediately on the grant date and 25% per quarter and become fully vested on thenine-month anniversary of the date of grant.93,000 of the stock options were granted to a director as incentive for joining the Board of Directors, they have a strike price of $1.31 and vest 25% per quarter and become fully vested on theone-year anniversary from the date of grant. The Company also granted 168,776 stock options to executive officers with a strike price of $2.52 and vest 25% per quarter and become fully vested on theone-year anniversary from the date of grant.

The fair value of options granted during the nine months ended June 30, 2026 was determined using the Black Scholes Option Pricing Model. For the purposes of the valuation model, the Company used the simplified method for determining the granted options expected lives. The simplified method is used since the Company does not have adequate historical data to utilize in calculating the expected term of options. The fair value for options granted was calculated using the following weighted average assumptions:

The Company recorded $227,077 as stock compensation expense within selling, general and administrative for the three months ended June 30, 2026. The Company recorded $1,195,141 as stock compensation expense within selling, general and administrative for the nine months ended June 30, 2026, which included $713,743 of expense related to the restricted stock units that vested during January 2026. The weighted average grant date fair value per share for options granted during the nine months ended June 30, 2026 was $1.13. As of June 30, 2026 there was $123,003 in compensation costs for non-vested awards not yet recognized and is expected to be recognized over a weighted average period of 4 months.

NOTE I — COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leased office space under an operating lease in Stony Brook, New York for its former corporate headquarters. The lease was for a 30,000 square foot building. The Company entered into an amended lease agreement on February 1, 2023. The initial term was forthree years and expired on February 1, 2026. The lease for the corporate headquarters required monthly payments of$48,861, which was adjusted annually based on the US Consumer Price Index and was adjusted to monthly payments of$52,440 commencing on February 1, 2025. In lieu of a security deposit, the Company provided a standby letter of credit of$750,000. The letter of credit expired when the Company vacated the premises. On January 20, 2026, the Company entered into a new lease agreement for a total of 2,095 square feet for its new corporate headquarters in Stony Brook, New York, which includes both office space andtwo laboratories for a combined monthly payment of$8,665. The new lease term commenced on February 1, 2026 and will expire on January 31, 2027. On September 19, 2025, the Company entered into a lease agreement for approximately 175 square feet of office space in Windermere, Florida. This lease expires on September 30, 2026, and has monthly payments of$1,489. The lease for our new corporate headquarters, as well as the office space lease in Florida are both considered short-term lease obligations. The total rent expense for the three and nine months ended June 30, 2026 was$30,462 and$266,487, respec tively.

On September 28, 2025, the Board approved new Employment Agreements (together, the “Employment Agreements”) with Mr. Shorrock and Ms. Jantzen. The Employment Agreements provide that Mr. Shorrock will be appointed as Chief Executive Officer and President and Ms. Jantzen will continue to serve in her role as Chief Financial Officer of the Company. The terms of the Employment Agreements began on September 29, 2025 and Mr. Shorrock and Ms. Jantzen will each hold office until the election and qualification of a successor or until either individual’s earlier death, resignation or removal.

Pursuant to the Employment Agreements, Mr. Shorrock’s and Ms. Jantzen’s annual base salary will each be $400,000. In October 2025, Mr. Shorrock was paid a one-time cash bonus of $175,000 and Ms. Jantzen was paid a one-time cash bonus of $150,000. Mr. Shorrock and Ms. Jantzen both received stock options to purchase shares of common stock with a grant-date fair value of $200,000 which will vest quarterly overone year. These options were granted on December 15, 2025 at anexercise price of $2.52. Mr. Shorrock and Ms. Jantzen will each be eligible for a performance bonus in the event the Company enters into a strategic transaction (such as, but not limited to a merger, sale or licensing of all or substantially all of the Company assets that existed prior to September 17, 2025), or a restructuring, equal to five percent (5.0%) of the net proceeds of the strategic transaction or net absolute cash retained at the time of the restructuring. The Board, acting in its discretion, may grant cash or equity/options/restricted stock units to Mr. Shorrock and Ms. Jantzen for achieving or progressing stated company goals.

The Employment Agreements also provide that upon termination without Cause (as defined in the Employment Agreements) or resignation for Good Reason (as defined in the Employment Agreements) of each of Mr. Shorrock’s and Ms. Jantzen’s employment then Mr. Shorrock and Ms. Jantzen will each be entitled to $400,000 or their then current annual base salary, together with all Accrued Benefits (as defined in the Employment Agreements). Upon a Change in Control (as defined in the Employment Agreements) or termination due to death or disability, Mr. Shorrock and Ms. Jantzen will each generally be entitled to receive the same payments and benefits they each would have received if their employment had been terminated by the Company without Cause (as described in the preceding paragraph), other than salary continuation payments.

Litigation

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the recorded liability includes probable and estimable legal costs associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. There is no pending litigation involving the Company at this time.

NOTE J **—**SEGMENT INFORMATION

As detailed in Note B above, the Company currently hasthree reportable segments; (1) Therapeutic DNA Production Services, (2) Digital Asset Treasury, and (3) DNA Tagging and Security Products and Services. Resources are allocated by our CEO, and CFO whom, collectively the Company has determined to be our CODM. As a result of the strategic restructuring during the fiscal year ended September 30, 2025, regarding the closure of its clinical laboratory, effective June 27, 2025, the Company’s MDx Testing Services segment is being reported in discontinued operations.

Information regarding operations by segment for the three-months ended June 30, 2026 is as follows:

Information regarding operations by segment for the three-months ended June 30, 2025 is as follows:

NOTE J – SEGMENT INFORMATION, continued

Reconciliation of segment loss from operations to consolidated loss before provision for income taxes is as follows for the three months ended:

Information regarding operations by segment for the nine-months ended June 30, 2026 is as follows:

NOTE J — SEGMENT INFORMATION, continued

Information regarding operations by segment for the nine months ended June 30, 2025 is as follows:

Reconciliation of segment loss from operations to consolidated loss before provision for income taxes is as follows for the nine months ended:

(a) Segment operating loss consists of net sales, less cost of sales, specifically identifiable research and development, and selling, general and administrative expenses.

(b) General corporate expenses consist of Selling, general and administrative expenses that are not specifically identifiable to a segment.

NOTE K — DISCONTINUED OPERATIONS

On June 27, 2025, the Company implemented a strategic restructuring and realignment of resources to focus exclusively on its Therapeutic DNA Production Services business. As part of actions undertaken, the Company implemented a workforce reduction of approximately 27% of its then current headcount and has ceased operations at ADCL.

The following table presents the major classes of ADCL’s results within Net loss from discontinued operations, net of tax in the condensed consolidated statement of operations for the three and nine months ended June 30, 2025:

Assets and liabilities of discontinued operations associated with ADCL presented in the consolidated balance sheets as of June 30, 2026 and September 30, 2025 are included in the following table:

NOTE L — FAIR VALUE MEASUREMENTS

The Company measures certain financial instruments at fair value in accordance with ASC 820,Fair Value Measurement, which establishes a three-tier hierarchy based on the observability of inputs used in valuation: Level 1 (quoted prices in active markets for identical assets or liabilities), Level 2 (observable inputs other than quoted prices, either directly or indirectly), and Level 3 (unobservable inputs that reflect the Company's own assumptions).

Recurring Fair Value Measurements

The following table presents the Company's liabilities measured at fair value on a recurring basis as of June 30, 2026:

The Series B-2 Pre-Funded Warrants are classified as a liability because the shares of Series B-2 Preferred Stock issuable upon exercise are contingently redeemable for cash outside the Company's control (see Note G). Pursuant to ASC 480-10-25-13(a), a warrant to purchase shares that are puttable or otherwise redeemable outside the issuer’s control is classified as a liability regardless of the probability that the underlying redemption contingency will occur. The Company estimated the fair value of the Series B-2 Pre-Funded Warrant liability using a Goldman Sachs lattice model, given the multiple contingent redemption and conversion features embedded in the underlying Series B-2 Preferred Stock. Significant unobservable inputs used in the valuation as of June 30, 2026 were as follows:

The following table presents a rollforward of the Series B-2 Pre-Funded Warrant liability, which is measured at fair value on a recurring basis using Level 3 inputs, for the three months ended June 30, 2026:

The Series B-2 Pre-Funded Warrants were issued on June 24 and June 30, 2026, concurrently with the closing of the Warrant Inducement and Exchange Transaction; accordingly, no change in fair value was recognized between issuance and quarter end. Changes in the fair value of the Series B-2 Pre-Funded Warrant liability will be recognized within change in fair value of warrant liabilities in the condensed consolidated statements of operations.

NOTE L — FAIR VALUE MEASUREMENTS, continued

Nonrecurring Fair Value Measurements

In connection with the closing of the SPA Private Placement (see Note G), the Company measured the Series B-1 Preferred Stock and Series F Warrants at fair value in order to allocate the $2.5 million in gross proceeds between the two instruments on a relative fair value basis. In connection with the closing of the Warrant Inducement and Exchange Transaction, the Company similarly measured the Series B-1 Preferred Stock, Series B-2 Preferred Stock, and Series B-2 Pre-Funded Warrants issued therein at fair value, both to allocate the related cash proceeds and to measure the consideration transferred in the extinguishment accounting described in Note G. These fair value measurements were classified as Level 3 and the B-1 and B-2 Preferred Stock were estimated using a Goldman Sachs lattice model and the Series F warrants were estimated using a Monte Carlo simulation model, using the following significant unobservable inputs as of the applicable Closing Date:

NOTE M — SUBSEQUENT EVENTS

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On July 10, 2026, the Company 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, the Company requested that the Nasdaq Listing and Hearing Review Council (the “Listing Council”) review the Delisting Determination in light of the Company’s recently closed financing and further developments in connection with its 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 the Company’s Common Stock on Nasdaq was suspended at the open of trading on July 14, 2026.

NOTE M — SUBSEQUENT EVENTS, continued

There can be no assurance that the Listing Council will grant the Company’s request for the Listing Council Review, or that the Listing Council Review will result in the Company’s 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, the Company’s Common Stock began trading on the OTCQB Venture at the open of trading on July 14, 2026.

SPA Private Placement

During July 2026, the Company closed on an additional $200,000 of gross proceeds under the SPA Private Placement. The Company issued 190,476 Series B-1 Preferred shares and 190,476 Series F Warrants. See Note G for details on the SPA Private Placement.

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

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.