UPEXI, INC.
For the period ended Mar 31, 2026. Filed May 12, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 12, 2026
UPXI$0.64-2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-10.
0001477932-26-000736
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-12.
0001477932-26-003001
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 47 current paragraphs.
16 unchanged; 26 reworded; 4 added; 65 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
We are a digital asset treasury company focused on acquiring, holding, and deploying Solana (“SOL”) as a core treasury asset in a disciplined and capital efficient manner. Our treasury strategy allocates capital to SOL and related activities with the objective of enhancing long-term shareholder value while maintaining appropriate liquidity and managing risk.
Current report
In addition to potential price appreciation of SOL, we seek to generate incremental returns through capital allocation strategies that include staking SOL, delegating SOL to validators, and selectively acquiring discounted locked token positions. We may also utilize equity or convertible debt issuances to support treasury growth when management determines such issuances are in the best interests of its shareholders. As of March 31, 2026, we held liquid and locked SOL tokens of approximately 1,383,079 and 978,852, respectively.
Current report
Realized loss on sale of digital assets increased by approximately $6.8 million as the Company began its investments in digital assets toward the end of fiscal year 2025 and there was no digital assets sold in the prior period.
Current report
Realized loss on sale of digital assets increased by approximately $6.8 million as the Company began its investments in digital assets toward the end of fiscal year 2025 and there was no digital assets sold in the prior period.
Removed paragraphs (65)
Previous report
Our Solana Treasury Strategy
Previous report
Early in 2025, we updated and modified our cash management and treasury strategy to include holding digital currency assets directly on our balance sheet. This was a shift from before when we held excess cash primarily in FDIC-insured interest-bearing accounts. The change to adopt this strategy results from our intention to obtain the highest yield on excess cash. Under our new approach, our treasury policy focuses primarily on Solana (“SOL”). The approach involves applying a public-market treasury model to an asset that is considered earlier in its lifecycle, with respect to both development and usage, as well as institutional adoption, than Bitcoin. Management will focus its resources on this digital asset strategy and a significant portion of the balance sheet will be allocated to holding Solana in the Company’s digital asset treasury. Currently our treasury is exclusively dedicated to the SOL digital asset and currently we do not intend to dedicate any of the treasury allocated capital to other digital assets. We will stake the vast majority of the Solana in our treasury to earn a staking yield and turn the treasury into a productive asset. Currently we are staking approximately 95% of our SOL treasury, and intend to maintain a similar or higher percentage going forward. We do not hedge our SOL and do not have plans to hedge our SOL in the future.
Previous report
Our treasury is intended to bring value to our shareholders in these ways:
Previous report
Note that we are underpinned by Solana, which we believe is the leading high-performance blockchain and may see its price rise in the future. If this occurs, our Solana treasury will move up in value, also benefiting shareholders.
Previous report
Our Staking Program
Previous report
Pursuant to our treasury strategy, we will use our SOL in the treasury to generate a return through various opportunities with the most significant portion being allocated to our staking program. We will utilize several validators in the staking program to reduce our risk with a single validator and maximize the overall yield from the staking program. We will also dedicate a portion of the SOL in our staking program to utilize smaller validators to help improve the overall Solana ecosystem. These validators are scrutinized through our due diligence program and are initially only given a small amount of SOL for the Company to be able to verify the expected performance and yield, and to ensure that the validator should be included in our future allocation of SOL to validators. Management evaluates the validators on a routine basis around performance, yield, and economics, and makes monthly adjustments on the overall allocation of the SOL in the treasury based on our evaluation. Currently we have approximately 95% of our SOL treasury staked and target a similar or higher percentage in the future.
Previous report
We maintain possession and control of the SOL when it is staked at all times. Native staking is generally considered a safe activity, as it is done in-protocol (i.e. is built into Solana itself), and as, unlike other networks, Solana has not implemented “slashing” penalties for validators that either intentionally misbehave or perform their duties poorly. As such, the major risk with staking is that we choose a validator with poor performance who realizes a low staking yield. Additionally, as part of the “activating” and “exiting” processes of SOL staking, any staked SOL will be inaccessible for a period of time determined by a range of factors, resulting in certain liquidity risks that we manage.
Previous report
Process of Staking
Previous report
Management has bi-weekly meetings to evaluate treasury operations, including the staking of the Company’s SOL. Based on these meetings, management determines the allocation of the SOL treasury to the staking program and determines the amount of allocation to each validator, ensuring that no single validator has such a large percentage of our stake that it represents concentration risk.
Previous report
If it is determined to reduce the amount of the SOL dedicated to the staking program or it is determined to change the allocation of SOL to a validator, we will initiate an unstaking process and notify the validator of the change, which effectively reverses the delegation of the SOL from the applicable validator node.
Previous report
Solana has a cooldown period known as the “deactivation period,” which is the time it takes for the unstaked SOL to become fully liquid. During this period, the tokens are not actively earning rewards, but they are also not yet available for transfer or use. The length of this period can vary based on network conditions, but is generally expected to be 48 hours or less. Once the cooldown period is complete, the Company will have complete control over the SOL, including the ability to sell the SOL or transfer it as determined by management.
Previous report
Liquidity Management
Previous report
The Company’s staking program involves the temporary loss of the ability to transfer, assign a new validator or otherwise dispose of the SOL. Under normal conditions, the Company will regain complete control over its unstaked SOL within two days of initiating the unstaking. However, there can be no guarantee that such process will result in the Company regaining complete control of its SOL in time to satisfy its current obligations. We maintain a certain amount of liquid SOL in the treasury, classified as current digital assets at fair value and a certain amount of cash to ensure that the Company is able to satisfy its current obligations.
Previous report
How We Earn Staking Rewards
Previous report
To earn staking rewards, we delegate our SOL to leading Solana validators via Solana’s in-protocol delegation system. This means we deposit our SOL tokens into a staking account, which is then delegated to a validator’s vote account. We utilize native staking only, and stake to top validators who have demonstrated a track record of high performance, high yield generation, and attractive delegator economics. We use multiple validators to both maximize the return on our Solana treasury and to mitigate the risk of having only one or two validators for our treasury staking.
Previous report
SOL and the Solana Network
Previous report
SOL is a digital asset that is created and transmitted through the operations of the peer-to-peer Solana network (the “Solana blockchain” or “Solana network”), which is a decentralized network of computers operating the implementation of the Solana protocol. While certain entities such as Solana Labs, Inc. and the Solana Foundation have influence over the Solana network’s development and governance (which was particularly true during the network’s early years), no single entity owns or operates the Solana network, the infrastructure of which is collectively maintained by a decentralized user base. The Solana network allows the creation and exchange of tokens, including SOL, which are recorded on the Solana network. SOL can be used to pay for goods and services, including to send a transaction on the Solana network, or it can be swapped to other tokens or converted to fiat currencies, such as the U.S. dollar, at rates determined on digital asset trading platforms or in individual end-user-to-end-user transactions under a market-based system. Furthermore, the Solana network allows users to write and implement general purpose code known as smart contracts or programs that create decentralized applications, and for users to openly interact with said decentralized applications. Using programs, users can create decentralized applications covering a variety of categories and subsectors, including borrow/lend protocols, decentralized exchanges, social applications, web3 gaming, tokenized assets, AI agents, decentralized physical infrastructure networks, and many more. As such, the Solana network expands blockchain use well beyond just a peer-to-peer money system.
Previous report
The Solana protocol introduced the proof-of-history timestamping mechanism. Proof-of-history is not a consensus mechanism, but a cryptographic clock that enables greater organization without extensive communication, thereby increasing throughput. Proof-of-history enables leaders to know when it’s their turn to produce a block, rather than requiring the entire network to first come to an agreement on the prior block before the leader can begin their work.
Previous report
In addition to the proof-of-history mechanism, the Solana network uses a proof-of-stake consensus mechanism to incentivize SOL holders to validate transactions. Unlike proof-of-work, in which miners expend computational and energy resources to be the miner to propose a block and receive the block reward, in proof-of-stake, validators pledge or “stake” coins, perform duties such as proposing or validating blocks, and receive staking rewards generally in proportion to the amount of coins staked. A validator that performs its duties poorly, whether maliciously or unintentionally, would receive fewer or no rewards. Proof-of-stake is viewed as more energy efficient and scalable than proof-of-work. Proof-of-history combined with a proof-of-stake consensus model are some of the components on Solana that enable high throughput and low-latency transaction processing.
Previous report
Overview of the Solana Network
Previous report
In order to own, transfer or use SOL directly on the Solana network on a peer-to-peer basis (as opposed to through an intermediary, such as a custodian or centralized exchange), a person generally must have internet access to connect to the Solana network and set up a wallet, which is the software that safeguards a user’s keypair (public key plus secret key). SOL transactions may be made directly between end-users without the need for an intermediary. To transact on the Solana network, a user, typically through an application such as a wallet or smart contract, will board the transaction to the current leader, who will organize the transactions into shards before the network processes and validates such transactions. Using cryptography and its proof-of-stake consensus mechanism, the Solana network can come to a shared state of the network in a decentralized fashion and without a centralized leader. Blocks are built on top of prior ones by subsequent leaders, continuing the process.
Previous report
Prior to transacting on Solana, a user generally must first install on their computer or mobile device a software program that will allow the user to generate a private and public key pair such as a wallet. The wallet also enables the user to connect to the Solana network, interact with decentralized applications, and transfer or swap tokens with other users or applications.
Previous report
Each user has their own key pair that is stored in such software, like a wallet. To receive SOL in a peer-to-peer transaction, the SOL recipient must provide its public key to the party initiating the transfer. This activity is analogous to a recipient for a transaction in U.S. dollars providing a routing address in wire instructions to the payor so that cash may be wired to the recipient’s account. The payor approves the transfer to the address provided by the recipient by “signing” a transaction that consists of the recipient’s public key with the private key of the address from where the payor is transferring the SOL. The recipient, however, does not make public or provide to the sender its private key (though the network can still verify the validity of the signature – i.e. that it was signed by the holder of the private key – using cryptography). With cold storage, our custodian maintains all of the private keys.
Previous report
Neither the recipient nor the sender reveal their private keys in a peer-to-peer transaction because the private key authorizes transfer of the funds in that address to other users. Therefore, if a user loses their private key, the user may permanently lose access to the SOL contained in the associated address. Likewise, SOL is irretrievably lost if the private key associated with them is deleted and no backup has been made. When sending SOL, a user’s Solana network software program must validate the transaction with the sender’s associated private key. In addition, since every computation on the Solana network requires processing power, there is a mandatory transaction fee involved with the transfer that is paid by the payor. The resulting digitally validated transaction is sent by the user’s Solana network software program to the Solana network validators to allow transaction confirmation.
Previous report
Solana network validators record and confirm transactions when they validate and add blocks of information to the Solana blockchain. When a validator is selected to validate a block, it creates that block, which includes data relating to (i) the verification of newly submitted and accepted transactions and (ii) a reference to the prior block in the Solana blockchain to which the new block is being added. The validator becomes aware of outstanding, unrecorded transaction requests through peer-to-peer data packet transmission and distribution discussed above.
Previous report
Upon the addition of a block of SOL transactions, the Solana network software program of both the spending party and the receiving party will show confirmation of the transaction on the Solana blockchain and reflect an adjustment to the SOL balance in each party’s Solana network public key, completing the SOL transaction. Once a transaction is confirmed on the Solana blockchain, it is irreversible.
Previous report
Some SOL transactions are conducted “off-blockchain” and are therefore not recorded on the Solana blockchain. These “off-blockchain” transactions involve the transfer of control over, or ownership of, a specific digital wallet holding SOL or the reallocation of ownership of certain SOL in a pooled-ownership digital wallet, such as a digital wallet owned by a digital asset trading platform. If a transaction takes place through a centralized digital asset exchange or a custodian’s internal books and records, it is not broadcast to the Solana network or recorded on the Solana blockchain. In contrast to on-blockchain transactions, which are publicly recorded on the Solana blockchain, information and data regarding off-blockchain transactions are generally not publicly available. Therefore, off-blockchain transactions are not truly SOL transactions in that they do not involve the transfer of transaction data on the Solana network and do not reflect a movement of SOL between addresses recorded on the Solana blockchain. For these reasons, off-blockchain transactions are not immutable or irreversible as any such transfer of SOL ownership is not cryptographically protected by the protocol behind the Solana network or recorded in, and validated through, the blockchain mechanism.
Previous report
Since inception, transaction fees on the Solana Network have comprised of a fixed rate of 0.000005 SOL per transaction, plus a variable fee component based on the computation resources used during the transaction. SOL holders can also pay an additional prioritization fee to expedite their transaction.
Previous report
Validators
Previous report
In proof-of-stake, validators risk or stake coins to be randomly selected to validate transactions and are rewarded for performing their responsibilities and behaving in accordance with protocol rules. Malfunctions that cause validators to go offline and, in turn, inhibit them from performing their duties can result in financial penalties. Any malicious activity, such as making incorrect attestations or otherwise violating protocol rules may result in lower rewards or the lost opportunity to gain rewards. The penalty varies depending on the type of offense and correlation to potential offenses by other validators.
Previous report
Validators are typically professional operations that design and build dedicated machines and data centers, including “clusters,” which are groups of validators that act cohesively and combine their processing to confirm transactions. When a validator confirms a transaction, the validator and any associated stakers receive a fee. During the course of ordering transactions and validating blocks, validators may be able to prioritize certain transactions in return for increased transaction fees, an incentive system known as “Maximal Extractable Value” or “MEV.” For example, in blockchain networks that facilitate decentralized finance “DeFi” protocols in particular, such as the Solana network, users may attempt to gain an advantage over other users by offering greater transaction fees.
Previous report
Validators less commonly capture MEV in the Solana network because, unlike the Ethereum network, it does not publicly expose transactions before they are accepted by a validator.
Previous report
Staking rewards on the Solana network are determined by the protocol and are distributed to validators and their associated stakers based on the proportion of their stake relative to the total active stake in the network. The rewards are funded by inflationary issuance of new tokens and transaction fees collected on the network. The specific amount each validator and staker receives depends on, among other things, their share of the total stake, the validator’s uptime and performance, and the overall network conditions.
Previous report
The historical range of staking rewards on the Solana network has varied due to differing levels of network congestion and protocol parameters. The actual annualized reward rate has fluctuated over time, reflecting changes in network activity, inflation rates, and protocol adjustments.
Previous report
Staking rewards on Solana are distributed at regular intervals. At the end of each epoch, with one epoch being roughly two days, the reward is calculated. The reward is automatically distributed at the beginning of the subsequent epoch. This regular reward frequency ensures that participants receive their share of rewards in a timely manner, reflecting their contribution to network security and transaction validation.
Previous report
How We Purchase or Sell Digital Assets
Previous report
Our management team reviews the Company’s short-term obligations and excess cash available to dedicate to the treasury strategy. When it is determined that the Company has excess cash available to dedicate to the treasury strategy, we deploy that capital into one of our custodians and through acquisition strategies with the custodians and our asset manager. We acquire the SOL over several days or weeks to maximize the number of SOL that is acquired with the capital deployed. If it is determined that the treasury needs to liquidate part of its SOL, the same process of selling the SOL into the market would be used. The Company has not reduced its treasury or sold any of its SOL staking rewards to date.
Previous report
Use of Custodians and Storage of SOL Tokens
Previous report
We do not self-custody and only utilize third-party qualified custodians to hold our Solana. We use qualified custodians that utilize risk management and operational best practices around items like hot vs. cold storage, access controls, custody technology, insurance, etc. Our primary custodian is BitGo Trust Company, Inc. (“BitGo”). We also maintain a custodial relationship with Coinbase, Inc. (“Coinbase”) and are in the process of distributing our treasury to different custodians and onboarding other qualified custodians to ensure that we mitigate our Solana treasury risk through the use of several qualified custodians.
Previous report
Storage of Our Digital Assets in our SOL Treasury
Showing the first 40 of 65 passages. Open the source sections for the rest.
Reworded paragraphs (26)
Previous wording
Upexi, Inc., a Delaware corporation, originally formed as a Nevada corporation in September of 2018. The Company has seven active subsidiaries that are part of the Company. We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused in Solana tokens and staking of those tokens. We continue to be a brand owner specializing in the development, manufacturing, and distribution of consumer products.
Current wording
Upexi, Inc., a Delaware corporation, originally formed as a Nevada corporation in September of 2018. The Company has seven active subsidiaries that are part of the Company. We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused in Solana tokens and staking of those tokens. We also operate as a brand owner specializing in the development, manufacturing, and distribution of consumer products.
Previous wording
The following summary of the Company’s operations should be read in conjunction with its unaudited condensed consolidated financial statements for the three and six months ended December 31, 2025 and 2024, which are included herein.
Current wording
The following summary of the Company’s operations should be read in conjunction with its unaudited condensed consolidated financial statements for the three and nine months ended March 31, 2026 and 2025, which are included herein.
Previous wording
Revenue declined by approximately $1.1 million, or 27.4%, as compared with the same period last year. Management’s focus is on the digital asset strategy and resources are allocated accordingly. We do not expect significant increases to these revenue sources in future quarters.
Current wording
Revenue declined by approximately $2.1 million, or 66.8%, as compared with the same period last year, primarily due to the Company’s shift away from legacy health, wellness and other consumer-product lines and the exit of certain manufacturing and distribution operations. Management’s focus is on the digital asset strategy and resources are allocated accordingly. We do not expect significant increases to these revenue sources in future quarters.
Previous wording
Digital asset revenue increased by approximately $5.1 million as compared with the same period last year as the Company began its investments in digital assets toward the end of fiscal year 2025. The Company earns staking revenue by delegating its digital assets to third-party validators on proof-of-stake blockchain networks. The digital asset revenue is expected to increase as the number of SOL tokens the Company has staked increases, the overall increase in the price of SOL and the Company’s continued expansion of its digital asset strategy.
Current wording
Digital asset revenue increased by approximately $3.5 million as compared with the same period last year as the Company began its investments in digital assets toward the end of fiscal year 2025. The Company earns staking revenue by delegating its digital assets to third-party validators on proof-of-stake blockchain networks. The digital asset revenue is expected to increase as the number of SOL tokens the Company has staked increases, the overall increase in the price of SOL and the Company’s continued expansion of its digital asset strategy.
Previous wording
Cost of revenue increased by approximately $0.3 million, or 30%, as compared with the same period last year. The gross margin was approximately 53.9% and 74.3% for the three months ended December 31, 2025 and 2024, respectively, a decrease of approximately 20%, as compared with the same period last year, mainly due to inventory valuation adjustments.
Current wording
Cost of revenue decreased by approximately $1.4 million, or 87.1%, as compared with the same period last year. The gross margin was approximately 80.4% and 49.3% for the three months ended March 31, 2026 and 2025, respectively, an increase of approximately 31%, as compared with the same period last year, mainly due to the elimination of the manufacturing and distribution operations.
Previous wording
Sales and marketing expenses decreased by approximately $34,000, or 3.6%, as compared with the same period last year. Management expects the sales and marketing expenses to significantly decline, quarter over quarter for the year remainder of the year as less marketing expenses are spent on the remaining products and several of the fixed sales and marketing expenses have been eliminated.
Current wording
Sales and marketing expenses decreased by approximately $0.5 million, or 46.8%, as compared with the same period last year. Management expects the sales and marketing expenses to significantly decline, quarter over quarter for the remainder of the year as less marketing expenses are spent on the remaining products and several of the fixed sales and marketing expenses have been eliminated.
Previous wording
Distribution costs decreased by approximately $0.3 million, or 27.6%, as compared with the same period last year. The decrease in distribution costs was primarily related to the overall decline in revenue and is expected to continue to decline for the remainder of the year.
Current wording
Distribution costs decreased by approximately $0.4 million, or 40.5%, as compared with the same period last year. The decrease in distribution costs was primarily related to the overall decline in revenue and is expected to continue to decline for the remainder of the year.
Previous wording
General and administrative expenses increased approximately $4.0 million, or 257%, as compared with the same period last year. The increase is mainly a result of expenses in connection with the change in the business strategy to hold digital assets as parts of its treasury. The increase was primarily due to the $1.5 million increase in public company expenses, $0.4 million increase in professional fees and the $1.5 million increase in compensation to employees.
Current wording
General and administrative expenses increased approximately $2.3 million, or 86.6%, as compared with the same period last year. The increase is mainly a result of expenses in connection with the change in the business strategy to hold digital assets as parts of its treasury. The increase was primarily due to the $0.3 million increase in public company expenses, $0.3 million increase in professional fees and the $2.1 million increase in compensation to employees.
Previous wording
Unrealized losses on digital assets increased by approximately $164.5 million as the Company began its investments in digital assets toward the end of fiscal year 2025. The changes mainly result from the price changes on SOL over the recorded cost of SOL during the three months ended December 31, 2025. There were no digital assets in the Company’s treasury in the same period one year ago.
Current wording
Unrealized losses on digital assets increased by approximately $92.3 million as the Company began its investments in digital assets toward the end of fiscal year 2025. The changes mainly result from the price changes on SOL over the recorded cost of SOL during the three months ended March 31, 2026. There was a minimal amount of digital asset activity during the same period one year ago.
Previous wording
Realized losses on digital asset revenue converted into USD increased by approximately $0.3 million as the Company began its investments in digital assets toward the end of fiscal year 2025 and there was no staking revenue converted into USD in the prior period. The losses were a result of the price changes on SOL from the period the digital assets were recorded as staking revenue and the price the staking revenue was converted into USD during the three months ended December 31, 2025. The digital assets sales are recorded on a first in first out basis.
Current wording
Realized losses on digital asset revenue converted into USD increased by approximately $1.9 million as the Company began its investments in digital assets toward the end of fiscal year 2025 and there was no staking revenue converted into USD in the prior period. The losses were a result of the price changes on SOL from the period the digital assets were recorded as staking revenue and the price the staking revenue was converted into USD during the three months ended March 31, 2026. The digital assets sales are recorded on a first in first out basis.
Previous wording
Other operating expenses increased by approximately $9.6 million, or 3,527%, as compared with the same period last year. The increase was primarily due to increased stock compensation of approximately $8.3 million. The increase was primarily related to the $4.4 million increase related to the warrants for the asset management agreement, the $1.4 million impairment of assets from manufacturing shutdown and approximately $3.8 million increase in the amortization of stock-based compensation related to restricted stock units.
Current wording
Other operating expenses increased by approximately $3.6 million as compared with the same period last year. The increase was primarily due to increased stock compensation of approximately $3.5 million.
Previous wording
Other expenses increased by approximately $5.4 million, or 1,051%, as compared with the same period last year. The increase was primarily due to increased debt used in the purchase of SOL for the digital asset treasury and partially offset by gains from cash management.
Current wording
Other expenses increased by approximately $2.3 million as compared with the same period last year. The increase was primarily due to increased debt used in the purchase of SOL for the digital asset treasury.
Previous wording
Revenue declined by approximately $2.3 million, or 27.5%, as compared with the same period last year. Management’s focus is on the digital asset strategy and resources are allocated accordingly. We do not expect significant increases to these revenue sources in future periods.
Current wording
Revenue declined by approximately $4.4 million, or 38.2%, as compared with the same period last year, primarily due to the Company’s shift away from legacy health, wellness and other consumer-product lines and the exit of certain manufacturing and distribution operations. Management’s focus is on the digital asset strategy and resources are allocated accordingly. We do not expect significant increases to these revenue sources in future periods.
Previous wording
Digital asset revenue increased by approximately $11.2 million as compared with the same period last year as the Company began its investments in digital assets toward the end of fiscal year 2025. The Company earns staking revenue by delegating its digital assets to third-party validators on proof-of-stake blockchain networks. The digital asset revenue is expected to increase as the number of SOL tokens the Company has staked increases, the overall increase in the price of SOL and the Company’s continued expansion of its digital asset strategy.
Current wording
Digital asset revenue increased by approximately $14.7 million as compared with the same period last year as the Company began its investments in digital assets toward the end of fiscal year 2025. The Company earns staking revenue by delegating its digital assets to third-party validators on proof-of-stake blockchain networks. The digital asset revenue is expected to increase as the number of SOL tokens the Company has staked increases, the overall increase in the price of SOL and the Company’s continued expansion of its digital asset strategy.
Previous wording
Cost of revenue decreased by approximately $0.2 million, or 6.5%, as compared with the same period last year. The gross margin was approximately 62.1% and 70.6% for the six months ended December 31, 2025 and 2024, respectively, a decrease of approximately 8%, as compared with the same period last year, mainly due to inventory valuation adjustments.
Current wording
Cost of revenue decreased by approximately $1.6 million, or 38.3%, as compared with the same period last year. The gross margin was approximately 64.8% for the nine months ended March 31, 2026 and 2025.
Previous wording
Sales and marketing expenses decreased marginally by approximately $8,000, or 0.4%, compared with the same period last year. Management expects the sales and marketing expenses to significantly decline, quarter over quarter for the remainder of the year as less marketing expenses are spent on the remaining products and several of the fixed sales and marketing expenses have been eliminated.
Current wording
Sales and marketing expenses decreased marginally by approximately $0.5 million, or 16.3%, compared with the same period last year. Management expects the sales and marketing expenses to significantly decline, quarter over quarter for the remainder of the year as less marketing expenses are spent on the remaining products and several of the fixed sales and marketing expenses have been eliminated.
Previous wording
Distribution costs decreased by approximately $0.9 million, or 33.7%, as compared with the same period last year. The decrease in distribution costs was primarily related to the overall decline in revenue and is expected to continue to decline for the remainder of the year.
Current wording
Distribution costs decreased by approximately $1.3 million, or 35.5%, as compared with the same period last year. The decrease in distribution costs was primarily related to the overall decline in revenue and is expected to continue to decline for the remainder of the year.
Previous wording
General and administrative expenses increased approximately $11.9 million, or 407%, as compared with the same period last year. The increase is mainly a result of expenses in connection with the change in the business strategy to hold digital assets as parts of its treasury. The increase was primarily due to the $3.8 million increase in public company expenses, $0.8 million increase in professional fees, $1.7 million in digital asset treasury fees, $0.6 million in travel related expenses and $4.5 million increase in compensation to employees.
Current wording
General and administrative expenses increased approximately $14.2 million, or 254.6%, as compared with the same period last year. The increase is mainly a result of expenses in connection with the change in the business strategy to hold digital assets as parts of its treasury. The increase was primarily due to the $4.2 million increase in public company expenses, $0.7 million increase in professional fees, $1.8 million in digital asset treasury fees, $0.9 million in travel related expenses and $6.7 million increase in compensation to employees.
Previous wording
Unrealized losses on digital assets increased by approximately $86.5 million as the Company began its investments in digital assets toward the end of fiscal year 2025. The changes mainly result from the price changes on SOL over the recorded cost of SOL during the six months ended December 31, 2025.
Current wording
Unrealized losses on digital assets increased by approximately $178.8 million as the Company began its investments in digital assets toward the end of fiscal year 2025. The changes mainly result from the price changes on SOL over the recorded cost of SOL during the nine months ended March 31, 2026.
Previous wording
Realized losses on digital asset revenue converted into USD increased by approximately $0.3 million as the Company began its investments in digital assets toward the end of fiscal year 2025 and there was no staking revenue converted into USD in the prior period. The losses were a result of the price changes on SOL from the period the digital assets were recorded as staking revenue and the price the staking revenue was converted into USD during the six months ended December 31, 2025. The digital assets sales are recorded on a first in first out basis.
Current wording
Realized losses on digital asset revenue converted into USD increased by approximately $2.2 million as the Company began its investments in digital assets toward the end of fiscal year 2025 and there was no staking revenue converted into USD in the prior period. The losses were a result of the price changes on SOL from the period the digital assets were recorded as staking revenue and the price the staking revenue was converted into USD during the nine months ended March 31, 2026. The digital assets sales are recorded on a first in first out basis.
Previous wording
Other operating expenses increased by approximately $15.1 million, or 2,247%, as compared with the same period last year. The increase was primarily due to increased stock-based compensation of approximately $9.2 million related to restricted stock units, $4.7 million increased stock-based compensation related to the warrants for the asset management agreement, and $1.4 million impairment of assets from manufacturing shutdown.
Current wording
Other operating expenses increased by approximately $18.7 million as compared with the same period last year. The increase was primarily due to increased stock-based compensation of approximately $12.6 million related to restricted stock units, $4.7 million increased stock-based compensation related to the warrants for the asset management agreement, $1.8 million in digital asset service fees, and $1.6 million impairment of assets from manufacturing shutdown.
Previous wording
Other expenses increased by approximately $3.3 million, or 1,461%, as compared with the same period last year. The increase was primarily due to increased debt used in the purchase of SOL for the digital asset treasury and partially offset by gains from cash management.
Current wording
Other expenses increased by approximately $7.8 million as compared with the same period last year. The increase was primarily due to increased interest expense for the debt used in the purchase of SOL for the digital asset treasury and partially offset by gains from cash management.
Previous wording
On December 31, 2025, the Company had cash of $1,616,765, a decrease of $1,358,385 from June 30, 2025. The primary changes resulted from financing obtained to implement and grow the Company’s digital asset strategy that was deployed to acquire digital assets.
Current wording
On March 31, 2026, the Company had cash of approximately $3.5 million, an increase of approximately $0.5 million from June 30, 2025. The primary changes resulted from financing obtained to implement and grow the Company’s digital asset strategy.
Previous wording
Net cash flows used in operating activities was $12,461,887 for the six months ended December 31, 2025, as compared to net cash flows used in operating activities of $3,358,636 for the six months ended December 31, 2024. The digital asset revenue was approximately $6.5 million non-cash as approximately $11.2 million was recognized as revenue, with approximately $4.7 million converted to USD. The unrealized losses of approximately $86.5 million, approximately $14.1 million in stock-based compensation, approximately $1.7 million in deferred financing cost amortization and approximately $1.4 million in impairment of manufacturing assets were all non-cash expenses offsetting the operational losses. Various costs were incurred in connection with beginning, implementing and growing the Company’s digital asset strategy and are expected to continue.
Current wording
Net cash flows used in operating activities was approximately $17.2 million for the nine months ended March 31, 2026, as compared to net cash flows used in operating activities of approximately $4.1 million for the nine months ended March 31, 2025. The approximately $221.5 million dollar net loss from operations was offset by approximately $178.8 million in unrealized losses on digital assets, net digital asset revenue not converted to USD of approximately $5.7 million, realized loss on sale of digital assets of approximately $6.8 million, loan amortization costs of approximately 2.7 million, the impairment of assets from the manufacturing shutdown of approximately $1.4 million and stock compensation expense of approximately $18.0 million and offset by approximately $1.3 million gain on the extinguishment of debt. The changes in assets and liabilities used approximately 2.9 million. Various costs were incurred in connection with beginning, implementing, and growing the Company’s digital asset strategy and are expected to continue.
Previous wording
Net cash flows used in investing activities was approximately $36.8 million for the six months ended December 31, 2025, as compared to net cash flows provided by investing activities of approximately $5.8 million for the six months ended December 31, 2024. The primary use of funds was on the acquisitions of SOL for the digital assets treasury during the six months ended December 31, 2025. In the six months ended December 31, 2024, the primary driver was the cash collected in connection with the sale of a building and the collection of the purchase price for E-core.
Current wording
Net cash flows used in investing activities was approximately $29.0 million for the nine months ended March 31, 2026, as compared to net cash flows provided by investing activities of approximately $5.8 million for the nine months ended March 31, 2025. The primary use of funds was on the acquisitions of SOL for the digital assets treasury during the nine months ended March 31, 2026. In the nine months ended March 31, 2025, the primary driver was the cash collected in connection with the sale of a building and the collection of the purchase price for E-core.
Previous wording
Net cash flows provided by financing activities was approximately $47.9 million for the six months ended December 31, 2025, as compared to net cash flows used in financing activities of approximately $2.7 million for the six months ended December 31, 2024. The primary driver of the change was the financing obtained from a capital raise occurring in each of July 2025 and November 2025 for purposes of executing the Company’s digital asset strategy in the six months ended December 31, 2025. This capital raise was offset by the expenses incurred for the capital raise and the expenses incurred for the convertible note obtained in a swap transaction for SOL Other notable drivers include the exercise of warrants that provided cash of $100,000 and cash used for common stock repurchases of approximately $800,000. In the six months ended December 31, 2024, the primary driver of cash used in financing activities was the payment on a note in connection with the sale of a building.
Current wording
Net cash flows provided by financing activities was approximately $46.7 million for the nine months ended March 31, 2026, as compared to net cash flows used in financing activities of approximately $2.1 million for the nine months ended March 31, 2025. The primary driver of the change was the financing obtained from a capital raise occurring in each of July 2025 and November 2025 for purposes of executing the Company’s digital asset strategy in the nine months ended March 31, 2026. This capital raise was offset by the expenses incurred for the capital raise and the expenses incurred for the convertible note obtained in a swap transaction for SOL Other notable drivers include the exercise of warrants that provided cash of approximately $0.1 million and cash used for common stock repurchases of approximately $2.8 million. In the nine months ended March 31, 2025, the primary driver of cash used in financing activities was the payment on a note in connection with the sale of a building.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We also operate as a brand owner specializing in the development, manufacturing, and distribution of consumer products.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused in Solana tokens and staking of those tokens. We continue to be a brand owner specializing in the development, manufacturing, and distribution of consumer products.