CEA Industries Inc.
For the period ended Oct 31, 2025. Filed Dec 15, 2025.
View on SEC.govAbout this filing
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.
Oct 31, 2025 · Filed Dec 15, 2025
BNC$4.87+6.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-07-31; filed 2025-09-22.
0001493152-25-014503
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-31; filed 2025-12-15.
0001493152-25-027782
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 90 previous paragraphs and 67 current paragraphs.
28 unchanged; 17 reworded; 17 added; 45 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 4 previous and 7 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 (17)
Current report
CEA Industries Inc. (the “Company”) was incorporated under the laws of the State of Nevada on October 14, 2009, and is headquartered in Louisville, Colorado. Historically, the Company operated a portfolio of consumer and commercial businesses, including climate control systems for controlled environment agriculture and retail operations in the vaping industry.
Current report
In August 2025, the Company initiated a strategic transformation by adopting a digital asset treasury strategy focused exclusively on Binance Coin (“BNB”), the native token of the BNB Chain blockchain. Through its wholly owned subsidiary, BNB Network Company (“BNC”), the Company seeks to build and manage the largest corporate treasury of BNB, providing institutional-grade exposure to blockchain infrastructure and decentralized finance (DeFi).
Current report
The Company’s treasury operations include acquiring and holding BNB on its condensed consolidated balance sheet and generating income through activities such as validation services, lending, and other DeFi protocols. This strategy commenced on August 5, 2025, following the closing of a private placement that raised approximately $500 million, with up to $750 million in additional proceeds available through warrant exercises. This capital raise supports the implementation of the Company’s BNB-focused Digital Asset Treasury (“DAT”) strategy, under which BNB serves as the primary treasury reserve asset. The Company has publicly stated its goal to own approximately 1% of BNB’s total supply by year-end 2025.
Current report
To support this strategy, the Company established CEA BRS LLC, a Delaware limited liability company, as a special purpose entity to hold and manage certain cryptocurrency assets in accordance with the DAT strategy. Additionally, the Company formed BNB Network Company (BNC) and BNB Cayman Sponsor, an exempted company organized under the laws of the Cayman Islands, to facilitate international operations and treasury management. These entities are wholly owned subsidiaries of the Company.
Current report
In connection with this strategic shift, the Company changed its Nasdaq ticker symbol from “VAPE” to “BNC” on August 6, 2025, reflecting its new identity as the BNB Network Company. The Company continues to operate its legacy business while building out its digital asset treasury platform, which is reflected in financial results beginning in the second fiscal quarter ending October 31, 2025.
Current report
Additionally, on June 6, 2025, the Company completed the acquisition of Fat Panda Ltd. and related entities (“Fat Panda), central Canada’s largest retailer and manufacturer of e-cigarettes, vape devices and e-liquids. This acquisition aligns with the Company’s strategy to focus on high-growth, regulated consumer markets and provides a vertically integrated infrastructure to support retail expansion and e-commerce capabilities.
Current report
Revenue for the three months ended October 31, 2025 was $7,143,485, compared to $7,436,751 for the three months ended October 31, 2024, representing a decrease of $293,266, or 4%. The decrease was primarily due to the discontinuation of one of the product lines.
Current report
Total Operating Income(Expenses)
Current report
Operating income was $87,712,091 for the three months ended October 31, 2025, compared to operating expenses of $2,468,446 for the three months ended October 31, 2024, representing an increase of $90,180,537 to, or 3653%.
Current report
The increase was primarily driven by an unrealized gain of $114,033,718 on the remeasurement of digital assets during the current quarter. This gain was partially offset by higher selling, general and administrative expenses, which increased by $ 19,382,131 to $ 21,666,564. The increase in SG&A was mainly attributable to a one-time warrant issuance cost of $14,551,125 and accrued asset management fees of $1,798,357, an increase of $825,684 in professional fees, and $875,886 in additional insurance costs associated with BNB treasury operations. Advertising and marketing expenses also increased by $ 4,471,050 from $184,013 during the three months ended October 31, 2024 to $4,655,063 during the three months ended October 31, 2025 as the Company incurred additional marketing costs in connection with PIPE transaction and ATM sales during the current quarter.
Current report
Non-GAAP Combined Six Months Ended October 31, 2025
Current report
Total Operating (Income) Expenses
Current report
Total operating income was $80,703,010 for the six months ended October 31, 2025, compared to operating expenses of $ 4,512,657 for the six months ended October 31, 2024, an increase of $84,310,117, or 1868%. The increase was primarily driven by an unrealized gain of $114,033,718 on the remeasurement of digital assets during the six months ended October 31, 2025. This gain was partially offset by higher selling, general and administrative expenses, which increased by $25,230,917 to $28,604,021. The increase in SG&A was mainly attributable to stock-based compensation of $4,699,197 issued to directors and certain employees related to the implementation of our BNB treasury operations, a one-time warrant issuance cost of $ 14,551,125, accrued asset management fees of $1,798,357, an increase of $825,624 in professional fees, and $875,886 in additional insurance costs associated with BNB treasury operations. Advertising and marketing expenses also increased by $4,492,683 from $297,205 during the six months ended October 31, 2024 to $4,789,889 during the six months ended October 31, 2025 as the Company incurred additional marketing costs in connection with PIPE transaction and ATM sales during the current quarter.
Current report
Other Income (Expense)
Current report
Our primary sources of liquidity include cash and cash equivalents, and, beginning in August 2025, digital assets held in our treasury. As of October 31, 2025, we had cash and cash equivalents of $36.6 million, digital assets measured at fair value of $547.1 million and a digital asset receivable of $16.8 million, as presented in our condensed consolidated balance sheets. We did not have any borrowings outstanding under a credit facility as of October 31, 2025.
Current report
We hold a significant portion of our liquid assets in digital assets, which are measured at fair value with changes recognized in earnings. As further described in Note 3 – Digital Assets to our condensed consolidated financial statements, our digital assets consist primarily of BNB. A portion of our digital assets is held at third-party venues that do not permit us to control the private keys to the wallets; amounts held at such venues are recorded as a digital asset receivable. While these receivables are on balance sheet, they expose us to counterparty and custodial risks that could adversely affect our liquidity if those counterparties fail to perform.
Current report
Our liquidity and capital resources are subject to volatility in the market price of BNB. A decline in the market price of BNB would reduce the fair value of our digital assets and could adversely affect our ability to fund operations, invest in growth, or meet obligations as they come due. We manage this risk by maintaining fiat liquidity; however, these measures may not fully mitigate market, custodial or regulatory risks.
Removed paragraphs (45)
Previous report
CEA Industries is headquartered in Colorado. Our operating businesses consist of selling environmental control and other technologies and services to the Controlled Environment Agriculture (“CEA”) industry, primarily in the US, and manufacturing and retailing e- cigarettes, vape devices and e-liquids, primarily in Canada.
Previous report
We sell to the CEA industry through our subsidiary, Surna Cultivation Technologies LLC. The CEA industry aims tooptimize the use of horticultural resources such as water, energy, space, capital, and labor, to create an agriculture business that is more efficient and more productive than those that use traditional farming methods. Typically, the CEA industry is focused on indoor agriculture and vertical farming.
Previous report
We aim to provide customers with a variety of value-added technology solutions that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy the evolving state and local codes, permitting and regulatory requirements. We do this by offering our customers a variety of product offerings that include air handling equipment and systems for indoor cultivation.
Previous report
As Central Canada’s first dedicated vaping product retailer, Fat Panda’s inventory consists of high-quality vaping goods. This allows for dedicated investment of funds toward vaping products, yielding a market-leading catalogue of hundreds of various devices, and a countless array of flavors to suit a diverse clientele base. Over the years, Fat Panda has established a highly loyal customer base by curating a product lineup that considers multiple factors including familiarity with vaping systems, previous nicotine dependence, and ergonomics, among other product elements.
Previous report
Over the last decade, Fat Panda has invested heavily in its in-house manufacturing of e-liquids, allowing it to drastically reduce the cost of the highest value commodity in its product offering. With proprietary recipes, and exclusivity to only Fat Panda retail outlets (where applicable), consumer retention is high with the uptake of Fat Panda’s own house-line of products. Furthermore, wholesale of these goods are allowed to alternate retailers in regions where a Fat Panda is not located, which the company believes acts as a feeder for expanded representation and marketing of the Fat Panda brand.
Previous report
Located in the geographic center of Canada, Fat Panda’s headquarters in Winnipeg, Manitoba also acts as the central distribution hub for all locations in the retail chain. Each satellite location receives at minimum one shipment from the warehouse per week for all goods manufactured in-house. Third party goods are shipped direct from external suppliers and can occur as often as necessary, allowing for enhanced turnover and manageable inventory levels per location.
Previous report
Fat Panda’s webstore similarly operates from the warehouse, with an ever-expanding catalogue, online sales have increased significantly in recent years, currently grossing over $250,000.00 (CAD) per month with a dedicated employee and other shared resources with warehousing.
Previous report
Acquisition of Fat Panda
Previous report
On February 7, 2025, we entered into a purchase agreement with the several owners of all the equity of a group of Manitoba corporations that own all the assets used in the business of Fat Panda Ltd.”).
Previous report
The acquisition included all the assets of Fat Panda, including among other things, the leases for the retail outlets, intellectual property, inventory, government licenses and permits, franchise agreements, manufacturing facilities and supply agreements, which are necessary for the ongoing manufacturing and retail operations of Fat Panda. The acquisition will continue the employment of the current management and of the production and retail staff, for the uninterrupted, continuous operations of the business. The Company will enter into non-competition agreements at closing. Certain of the senior management persons will enter into employment agreements for their continued employment after the closing of the acquisition.
Previous report
CEA closed the acquisition of Fat Panda on June 6, 2025.
Previous report
The purchase price was CAD$18,000,000 (approximately USD$12,900,000), paid in cash, securities and our loans. Cash payments totaled CAD$14,627,500, of which CAD$1,375,000 was paid into a joint escrow account to be held for 120 days after closing as a working capital adjustment and CAD$1,240,000 was paid into a joint escrow account to be held for 18 months after closing for possible general indemnity claims. CEA also issued 39,000 shares of the common stock of CEA with an agreed aggregate value of CAD$700,000 (approximately CAD$18.00 per share). CEA also issued notes in the aggregate principal amount of CAD$2,560,000, of which the aggregate principal amount of CAD$1,030,000 is convertible into the common stock of CEA at a conversion rate of USD$19.00 per share and up to the aggregate principal amount of CAD$500,000 is forgivable against possible tax indemnity claims. CEA also had an adjustment to reduce the purchase price in the amount of CAD$112,500 in relation to employee obligation claims under Canadian employment law.
Previous report
Private Placement Offering
Previous report
On July 28, 2025, CEA Industries Inc. entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain accredited investors (the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement offering (the “Offering”) (i) an aggregate of 41,754,478 shares of Common Stock, at an offering price of $10.10 per share, (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 7,750,510 shares of Common Stock (the “Pre-Funded Warrant Shares”) at an offering price of $10.09999 per Pre-Funded Warrant, and (iii) stapled warrants (the “Stapled Warrants”) to purchase an aggregate of 49,504,988 shares of Common Stock (the “Stapled Warrant Shares”) at an exercise price of $15.15 per Stapled Warrant. In the Offering, the Purchasers tendered U.S. dollars to the Company as consideration for the Common Stock, Stapled Warrants and Pre-Funded Warrants. The Company closed the Offering on August 5, 2025. The Offering delivered $500,000,000 in gross proceeds. Up to an additional $750,000,000 may be received by the Company from the exercise of the Stapled Warrants.
Previous report
The Company intends to use the net proceeds from the Offering primarily to acquire the native cryptocurrency of the BNB Chain blockchain commonly referred to as “BNB” and contribute the BNB to the Company’s treasury operations. The Company further intends to engage in income producing activities from the BNB held in treasury, including but not limited to, validation services, lending or other decentralized finance services.
Previous report
In connection with entering into the Securities Purchase Agreements, on July 28, 2025, the Company and the Purchasers entered into a Registration Rights Agreement, pursuant to which the Company agreed to file a registration statement with the U.S. Securities and Exchange Commission, within 30 days of the closing of the Offering registering the resale of the Common Stock sold in the Offering, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Stapled Warrants, the Stapled Warrant Shares and certain securities to be issued to the Company’s Strategic Advisors (as defined below).
Previous report
Asset Management Agreement
Previous report
In connection with the Offering, on August 5, 2025, the Company entered into an asset management agreement (the “Asset Management Agreement”) with 10X Capital Partners LLC (the “Asset Manager”) pursuant to which the Company appointed the Asset Manager to provide asset management and related services with respect to the Company’s digital assets in accordance with a defined treasury strategy (the “Treasury Strategy”). The Treasury Strategy is primarily focused on BNB and BNB equivalents, primarily within the BNB ecosystem.
Previous report
The assets subject to the Asset Management Agreement consist of the net proceeds from the Offering as well as any other cash or digital assets designated by the Company as part of its treasury (the “Treasury Assets”). The Treasury Assets are held in cryptocurrency wallets established and controlled by the Company’s Asset Manager (or an affiliate), with custody maintained by a custodian acceptable to the Company’s Strategic Committee.
Previous report
The Asset Manager is compensated according to a management fee schedule set forth in the Asset Management Agreement and is also entitled to a one-time issuance of warrants to purchase shares of the Company’s Common Stock equal to 2% of the aggregate number of shares and Pre-Funded Warrants issued in the Offering. The Company is responsible for all reasonable and documented expenses related to the operation of the Treasury Strategy, including custodial, banking, brokerage, transaction, and other related fees. The Asset Manager does not provide advice regarding securities, and the arrangement is structured to avoid the inclusion of securities as defined under the Investment Advisers Act of 1940.
Previous report
The Asset Management Agreement has a term of twenty years. If the Company terminates the Asset Management Agreement prior to the end of the term, or if the Asset Manager terminates due to a material breach by the Company, the Company is required to pay the Asset Manager all fees and other compensation that would have accrued through the end of the term as liquidated damages, paid monthly. The Asset Manager may terminate the agreement at any time for any reason with at least 120 days’ prior written notice.
Previous report
The Asset Manager is not authorized to act as custodian of the Company’s assets, nor to take possession or title to any assets, except for the direct withdrawal of fees as provided in the Asset Management Agreement. The Asset Manager may provide similar services to other clients, and the Asset Manager or its affiliates may engage in transactions for their own accounts. The Asset Management Agreement contains customary representations, warranties, confidentiality, indemnification and limitation of liability provisions, and is governed by the laws of the State of Delaware.
Previous report
Strategic Advisor Agreements
Previous report
On August 5, 2025, the Company entered into two Strategic Advisor Agreements (the “Strategic Advisor Agreements”) with each of 10X BNB Cayman Sponsor and YZi Management Labs Ltd. (the “Strategic Advisors”) pursuant to which the Company engaged the Strategic Advisors to provide strategic advice and guidance relating to the Company’s business, operations, growth initiatives and industry trends in the crypto technology sector for an initial term of six months, which may be extended by mutual written agreement of the Company and the Strategic Advisors. Either the Company or the Strategic Advisors may terminate the Strategic Advisor Agreements upon 90 days’ prior written notice or for cause, as such term is defined in the Strategic Advisor Agreements. Pursuant to the terms of the Strategic Advisor Agreements, the Company issued to the Strategic Advisors warrants (the “Strategic Advisor Warrants”) to purchase an aggregate of 6,930,697 shares of Common Stock. The exercise price per share of the Strategic Advisor Warrants is equal to the par value of the Common Stock. The Strategic Advisor Warrants are exercisable, in whole or in part, at any time and from time to time, for a period of seven years from the date of issuance. The Strategic Advisor Agreements also contain customary representations and warranties, confidentiality provisions and limitations on liability.
Previous report
Non-GAAP Combined Three Months Ended July 31, 2025
Previous report
The higher material costs, increased revenue, and the impact of the acquisition drove a decrease in gross profit of $605,000, or 21%, from $2,904,000 for the three months ended July 31, 2024 to $2,299,000 for the three months ended July 31, 2025. Our gross margin decreased by 11 percentage points, from 42% for the three months ended July 31, 2024 to 31% for the three months ended July 31, 2025
Previous report
Operating Expenses
Previous report
Operating expenses increased to $7,919,000 for the three months ended July 31, 2025, from $2,040,000 for the three months ended July 31, 2024, an increase of $5,879,000, or 288%. The operating expense increase consisted of (i) an increase in selling, general and administrative expenses (“SG&A expenses”) of $5,895,000, (ii) an increase advertising and marketing expenses of $54,000, and (iii) a decrease in product development costs of $71,000.
Previous report
Our increase in SG&A expenses for the three months ended July 31, 2025, compared to the three months ended July 31, 2024, was primarily due to (i) a one-time increase of $4,670,000 for stock-based compensation to directors and certain employees, related to the implementation of our Treasury operations, (ii) higher accounting and legal fees of $1,018,000, related to the Fat Panda acquisition, and (iii) approximately $200,000 in salaries and other expenses due to the acquisition.
Previous report
The increase in advertising and marketing expenses was primarily due to an increase in free product giveaways and in store promotions.
Previous report
The decrease in product development was due to a management decision regarding product development investment.
Previous report
Operating Loss
Previous report
We recognized an operating loss of $5,620,000 for the three months ended July 31, 2025, as compared to an operating profit of $864,000 for the three months ended July 31, 2024, a decrease in profit of $6,484,000 or 751%. The operating loss for the three months ended July 31, 2025 included $4,670,000 of non-cash, stock-based compensation, $60,000 for the income tax provision, $28,000 for debt related costs, and $18,000 in depreciation, compared to $0 in non-cash stock-based compensation and $27,000 of depreciation expense for the three months ended July 31, 2024. Excluding these non-cash items, our operating profit decreased by $1,708,000.
Previous report
Net Loss
Previous report
Overall, we recognized a net loss of $5,829,000 for the three months ended July 31, 2025, as compared to a net profit of $708,000 for the three months ended July 31, 2024, a decrease in profit of $6,537,000 or 923%. The net loss for the three months ended July 31, 2025 included $4,670,000 of non-cash stock-related compensation, $60,000 for the income tax provision, $28,000 for debt related costs, and $18,000 in depreciation, compared to $0 in non-cash stock-related compensation and $27,000 of depreciation expense for the three months ended July 31, 2024. Excluding these non-cash items, our net profit decreased by $1,761,000.
Previous report
Cash, Cash Equivalents
Previous report
As of July 31, 2025 (Successor), we had cash and cash equivalents of $3,020,000, compared to cash and cash equivalents of $2,149,000 as of April 30, 2025 (Predecessor). Our cash is held in bank depository accounts in financial institutions. As of July 31, 2025, we held deposits in this financial institution that exceeded the federally insured amount.
Previous report
As of July 31, 2025, we had accounts receivable (net of allowance for doubtful accounts) of $189,000, contract assets (net of allowance for doubtful accounts) of $233,000, inventory (net of excess and obsolete allowance) of $3,375,000, and prepaid expenses and other assets of $480,000 (Successor).
Previous report
As of July 31, 2025 we had total accounts payable and accrued expenses of $2,989,000, short term notes payable of $4,163,000, deferred revenue of $433,000, income tax payable of $47,000, current portion of operating lease liability of $662,000, and royalty liabilities of $13,000 (Successor). As of July 31, 2025, we had a working capital deficit of $1,011,000 (Successor), compared to working capital of $3,550,000 as of April 30, 2025 (Predecessor). The decrease in our working capital was primarily related to notes payable and higher deferred revenue, both as a result of the acquisition of Fat Panda.
Previous report
We currently intend to retain all available funds and any future earnings for use in the operation of our business. We have never declared or paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future.
Showing the first 40 of 45 passages. Open the source sections for the rest.
Reworded paragraphs (17)
Previous wording
The Company is also central Canada’s largest retailer and manufacturer of e-cigarettes, vape devices and e-liquids, with a market share exceeding 50% in the region. The Company entered this business through the acquisition of Fat Panda Limited (Fat Panda) which closed June 6, 2025. Fat Panda operates 33 retail locations, including 29 Fat Panda branded stores and four Electric Fog branded vape outlets, in the provinces of Manitoba, Ontario and Saskatchewan. Fat Panda also serves a wide range of customers through its online e-commerce platform. Its retail footprint is complemented by a comprehensive portfolio of products, including its own line of premium e-liquids manufactured in-house, along with a robust portfolio of trademarks and intellectual property.
Current wording
Fat Panda operates 33 retail locations, including 29 Fat Panda branded stores and four Electric Fog branded vape outlets, in the provinces of Manitoba, Ontario and Saskatchewan. Fat Panda also serves a wide range of customers through its online e-commerce platform. Its retail footprint is complemented by a comprehensive portfolio of products, including its own line of premium e-liquids manufactured in-house, along with a robust portfolio of trademarks and intellectual property.
Previous wording
CEA growers currently face a challenging business environment that includes high energy costs, water usage and conservation issues, continuously evolving waste removal regulations, inflationary pressures, and labor shortages. The part of the CEA industry focused on by the Company has been food related crops, a segment that is facing disruption from evolving market demand, competition, and reorganization, including the lack of growth capital and several noteworthy bankruptcies.
Current wording
The Company also continues to provide climate control systems for the controlled environment agriculture (“CEA”) industry. CEA growers currently face a challenging business environment that includes high energy costs, water usage and conservation issues, continuously evolving waste removal regulations, inflationary pressures, and labor shortages.
Previous wording
During the period from June 7, 2025 through July 31, 2025, we executed new sales contracts with a total contract value of $61,000. During this same period, there were no change orders or cancellations. Consequently, our net bookings were $61,000, representing a decrease of $24,000 (or 28%) from net bookings of $85,000 for the May 1, 2025 through June 6, 2025 period.
Current wording
We generate backlog through our Retail and Industry segment. During the period from June 7, 2025 through October 31, 2025, we executed new sales contracts with a total contract value of$587,000. During this same period, there were no change orders or cancellations. Consequently, our net bookings were $587,000, representing a decrease of $502,000 (or 24%) from net bookings of $85,000 for the May 1, 2025 through June 6, 2025 period.
Previous wording
Our backlog at July 31, 2025 was $630,000, a decrease of $96,000, or 13%, from our backlog of $726,000 at June 6, 2025. The increase in backlog is primarily the result of increased bookings in the first quarter that have not yet been fulfilled. While we expect to recognize all the revenue from the remaining backlog in 2025, there is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. Therefore, investors should not view backlog as earned revenue.
Current wording
Our backlog at October 31, 2025 was $902,000, an increase of $176,000, or 24%, from our backlog of $726,000 at June 6, 2025. The increase in backlog is primarily the result of increased bookings that have not yet been fulfilled. While we expect to recognize all the revenue from the remaining backlog in 2025, there is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. Therefore, investors should not view backlog as earned revenue.
Previous wording
The following table sets forth: (i) our beginning backlog (the remaining contract value of outstanding sales contracts for which we have received an initial deposit as of the previous period), (ii) our net bookings for the period (new sales contracts executed during the period for which we received an initial deposit, net of any adjustments including cancellations and change orders during the period), (iii) our recognized revenue for the period, and (iv) our ending backlog for the period (the sum of the beginning backlog and net bookings, less recognized revenue). Based on the current economic climate and our cost-cutting measures, there is no assurance that we will be able to continue to obtain the level of bookings that we have had in the past and or fulfill our current backlog, and we may experience contract cancellations, project scope reductions and project delays.
Current wording
(iii) our recognized revenue for the period, and (iv) our ending backlog for the period (the sum of the beginning backlog and net bookings, less recognized revenue). Based on the current economic climate and our cost-cutting measures, there is no assurance that we will be able to continue to obtain the level of bookings that we have had in the past and or fulfil our current backlog, and we may experience contract cancellations, project scope reductions and project delays.
Previous wording
We have provided an estimate in our condensed consolidated financial statements for when we expect to recognize revenue on our remaining performance obligations (i.e., our Q1 202 backlog). There continues to be significant uncertainty regarding the timing of our recognition of revenue on our Q1 202 backlog. Refer to theRevenue Recognition section ofNote 2 in our condensed consolidated financial statements, included as part of this Quarterly Report for additional information on our estimate of future revenue recognition on our remaining performance obligations.
Current wording
We have provided an estimate in our condensed consolidated financial statements for when we expect to recognize revenue on our remaining performance obligations (i.e., our Q2 2026 backlog). There continues to be significant uncertainty regarding the timing of our recognition of revenue on our Q2 2026 backlog. Refer to theRevenue Recognitionsection ofNote 9in our condensed consolidated financial statements, included as part of this Quarterly Report for additional information on our estimate of future revenue recognition on our remaining performance obligations.
Previous wording
Cost of revenue increased by $1,155,000 or 28%, from $4,054,000 for the three months ended July 31, 2024 to $5,209,000 for the three months ended July 31, 2025. The increase was primarily due to higher material costs of approximately $700,000 due to an increase in the cost per unit of many products for the newly enacted federal and provincial excise taxes. Additionally, the higher cost of sales was driven by an increase in revenue and approximately $200,000 was a result of the acquisition.
Current wording
Cost of revenue increased by $458,591 or 10%, from $4,591,637 for the three months ended October 31, 2024 to $5,050,228 for the three months ended October 31, 2025. The increase was primarily due to higher material costs due to an increase in the cost per unit of many products for the newly enacted federal and provincial excise taxes.
Previous wording
We recognized other expense of $267,000 for the three months ended July 31, 2025, compared to $0 for the three months ended July 31, 2024. Other expense for the current period consisted of interest and debt discount amortization on notes related to the acquisition.
Current wording
We recognized other income of $211,998,922 for the three months ended October 31, 2025, compared to $0 for the three months ended October 31, 2024. Other income for the current period consisted of airdrop income, gain on change in fair value of warrant liability, currency translation, interest expense and debt discount amortization on notes related to the acquisition.
Previous wording
Our financial results for the periods from May 1, 2025 through June 6, 2025 and the three months ended July 31, 2024 are referred to as those of the “Predecessor” period. Our financial results for the period from June 7, 2025 through July 31, 2025 are referred to as those of the “Successor” period. Our results of operations as reported in our Condensed Consolidated Financial Statements and Comprehensive Income (Loss) for these periods are prepared in accordance with U.S. GAAP. Although U.S. GAAP requires that we report our results for the period from May 1, 2025 through June 6, 2025 and the period from June 7, 2025 through July 31, 2025 separately, management views our operating results for the three months ended July 31, 2025 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison of our results to prior periods. We believe we cannot adequately benchmark the operating results of the period from June 7, 2025 through July 31, 2025 against any of the previous periods reported in our Condensed Consolidated Financial Statements and Comprehensive Income (Loss) without combining it with the period from May 1, 2025 through June 6, 2025, and do not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding our overall operating performance. Management believes that the key performance metrics for the Successor period when combined with the Predecessor period provide more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, in addition to presenting our results of operations as reported in our Condensed Consolidated Financial Statements in accordance with U.S. GAAP, the tables and discussion below also present the combined results for the three months ended July 31, 2025. The combined results for the three months ended July 31, 2025 represent the sum of the reported amounts for the Predecessor period from May 1, 2025 through June 6, 2025 and the Successor period from June 7, 2025 through July 31, 2025. These combined results are not considered to be prepared in accordance with U.S. GAAP and have not been prepared as pro forma results per applicable regulations. The combined operating results do not reflect the actual results we would have achieved absent our acquisition of Fat Panda and are not necessarily indicative of future results. Accordingly, the results for the combined three months ended July 31, 2025 (prepared on a Non-GAAP basis) and three months ended July 31, 2024 (prepared on a GAAP basis) may not be comparable.
Current wording
Our financial results for the periods from May 1, 2025 through June 6, 2025 and the six months ended October 31, 2024 are referred to as those of the “Predecessor” period. Our financial results for the period from June 7, 2025 through October 31, 2025 are referred to as those of the “Successor” period. Our results of operations as reported in our Condensed Consolidated Financial Statements and Comprehensive Income (Loss) for these periods are prepared in accordance with U.S. GAAP. Although U.S. GAAP requires that we report our results for the period from May 1, 2025 through June 6, 2025 and the period from June 7, 2025 through October 31, 2025 separately, management views our operating results for the six months ended October 31, 2025 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison of our results to prior periods. We believe we cannot adequately benchmark the operating results of the period from June 7, 2025 through July 31, 2025 against any of the previous periods reported in our Condensed Consolidated Financial Statements and Comprehensive Income (Loss) without combining it with the period from May 1, 2025 through June 6, 2025, and do not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding our overall operating performance. Management believes that the key performance metrics for the Successor period when combined with the Predecessor period provide more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, in addition to presenting our results of operations as reported in our Condensed Consolidated Financial Statements in accordance with U.S. GAAP, the tables and discussion below also present the combined results for the six months ended October 31, 2025. The combined results for the six months ended October 31, 2025 represent the sum of the reported amounts for the Predecessor period from May 1, 2025 through June 6, 2025 and the Successor period from June 7, 2025 through October 31, 2025. These combined results are not considered to be prepared in accordance with U.S. GAAP and have not been prepared as pro forma results per applicable regulations. The combined operating results do not reflect the actual results we would have achieved absent our acquisition of Fat Panda and are not necessarily indicative of future results. Accordingly, the results for the combined six months ended October 31, 2025 (prepared on a Non-GAAP basis) and six months ended October 31, 2024 (prepared on a GAAP basis) may not be comparable.
Previous wording
Revenue for the three months ended July 31, 2025 was $7,507,000, compared to $6,958,000 for the three months ended July 31, 2024, representing an increase of $549,000, or 8%. The increase was primarily due to an increase in the price per unit of many products to cover the cost of newly enacted federal and provincial excise taxes along with an increase due to the acquisition.
Current wording
Revenue for the six months ended October 31,2025 was $14,648,662, compared to $14,405,418 for the six months ended October 31, 2024, representing an increase of $243,244, or 2%. The increase was primarily due to an increase in the price per unit of many products to cover the cost of newly enacted federal and provincial excise taxes, mitigated by a decrease due to the discontinuation of one of the product lines.
Previous wording
The following summarizes our approximate cash flows for the period from June 7, 2025 through July 31, 2025 (Successor), for the period May 1, 2025 through July 31, 2025 (Predecessor) and for the three months ended July 31, 2024 (Predecessor):
Current wording
The following summarizes our approximate cash flows for the period from June 7, 2025 through October 31, 2025 (Successor), for the period May 1, 2025 through Jun 6, 2025 (Predecessor) and for the six months ended October 31, 2024 (Predecessor):
Previous wording
Cash used in operations for the period from June 7, 2025 through July 31, 2025 (Successor) was $1,725,000 compared to cash used in operations of $238,000 for the period May 1, 2025 through June 6 (Predecessor), 2025 and cash used in operations of $2,000 for the three months ended July 31, 2024 (Predecessor).
Current wording
Cash used in operations for the period from June 7, 2025 through October 31, 2025 (Successor) was $24,114,556 compared to cash used in operations of $238,000 for the period May 1, 2025 through June 6 (Predecessor), 2025 and cash provided in operations of $267,803 for the six months ended October 31, 2024 (Predecessor). The increase in cash used in operating activities was partially offset by unrealized gains on digital assets, gain on change in fair value of warrant liability, income from airdrop digital assets, changes in digital asset receivables and prepaid expenses.
Previous wording
Cash used for investing activities for the period from June 7, 2025 through July 31, 2025 (Successor) was $10,644,000 compared to cash used in investing activities of $2,000 for the period May 1, 2025 through June 6, 2025 (Predecessor) and $7,000 for the three months ended July 31, 2024. The increase was the result of cash paid for the acquisition of Fat Panda.
Current wording
Cash used in investing activities for the period from June 7, 2025 through October 31, 2025 (Successor) was $185,235,121 compared to cash used investing activities of $2,000 for the period May 1, 2025 through June 6 (Predecessor), 2025 and $19,749 for the six months ended October 31, 2024. The increase was the result of cash paid for the acquisition of Fat Panda and purchase of digital assets.
Previous wording
Cash provided by financing activities for the period from June 7, 2025 through July 31, 2025 (Successor) was $3,910,000. There were no cash flows from financing activities for the period May 1, 2025 through June 6, 2025 (Predecessor) or for the three months ended July 31, 2024 (Predecessor). The increase was the result of proceeds from the note payable in relation to the acquisition of Fat Panda.
Current wording
Cash provided by financing activities for the period from June 7, 2025 through October 31, 2025 (Successor) was $230,367,326. There were no cash flows from financing activities for the period May 1, 2025 through June 6, 2025 (Predecessor) or for the six months ended October 31, 2024 (Predecessor). The increase was primarily attributable to proceeds from a note payable related to the acquisition of Fat Panda, proceeds from the Company’s private placement and prefunded warrants, and proceeds from the Company’s ATM offering and cash used for share repurchases.
Previous wording
As of July 31, 2025, our contractual payment obligations consisted of a building lease. Refer toNote 4 –Leases of the notes to the condensed consolidated financial statements, included as part of this Quarterly Report for a discussion of our building lease.
Current wording
As of October 31, 2025, our contractual payment obligations consisted of a building lease. Refer toNote 5 –Leases of the notes to the condensed consolidated financial statements, included as part of this Quarterly Report for a discussion of our building lease.
Previous wording
Refer toNote 10 – Commitments and Contingencies of the notes to the condensed consolidated financial statements, included as part of this Quarterly Report for a discussion of commitments and contingencies.
Current wording
Refer toNote 12 – Commitments and Contingenciesof the notes to the condensed consolidated financial statements, included as part of this Quarterly Report for a discussion of commitments and contingencies.
Previous wording
We are required to disclose any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors. As of July 31, 2025, we had no off-balance sheet arrangements. During the three months ended July 31, 2025, we did not engage in any off-balance sheet financing activities other than those included in the discussed above and those reflected inNote 10 of our condensed consolidated financial statements.
Current wording
We do not have any off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our liquidity or capital resources. As further described in Note 3 – Digital Assets, certain digital assets are held at third-party venues and recorded as receivables; while not off-balance sheet, these arrangements expose us to counterparty and custodial risk. As of October 31, 2025, we had no off-balance sheet arrangements. During the quarter ended October 31, 2025, we did not engage in any off-balance sheet financing activities other than those included in the discussed above and those reflected inNote 12 – Commitments and Contingenciesof our condensed consolidated financial statements.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The following table sets forth: (i) our beginning backlog (the remaining contract value of outstanding sales contracts for which we have received an initial deposit as of the previous period), (ii) our net bookings for the period (new sales contracts executed during the period for which we received an initial deposit, net of any adjustments including cancellations and change orders during the period),
Current report — wording carried from elsewhere
Comparison of the Six Months Ended October 31, 2025 and October 31, 2024
Current report — wording carried from elsewhere
Revenues and Cost of Goods Sold
Current report — wording carried from elsewhere
Cost of revenue increased by $1,605,561 or 19%, from $8,652,017 for the six months ended October 31, 2024 to $10,257,578 for the six months ended October 31, 2025. The increase was primarily due to higher material costs due to an increase in the cost per unit of many products for the newly enacted federal and provincial excise taxes.
Current report — wording carried from elsewhere
We recognized other expense of $211,726,895 for the six months ended October 31, 2025, compared to $0 for the six months ended October 31, 2024. Other expense for the current period consisted of airdrop income, gain on change in fair value of warrant liability, currency translation, and interest and debt discount amortization on notes related to the acquisition.