CEA Industries Inc.
For the period ended Jan 31, 2026. Filed Mar 16, 2026.
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.
Jan 31, 2026 · Filed Mar 16, 2026
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 2025-10-31; filed 2025-12-15.
0001493152-25-027782
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-01-31; filed 2026-03-16.
0001493152-26-010296
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.
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Tables are not compared: 7 previous and 3 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 (47)
Current report
Overview of Digital Asset Treasury Strategy
Current report
The Company has recently implemented a treasury strategy focused on acquiring and holding digital assets, primarily BNB. As of January 31, 2026, the Company held 515,544 BNB tokens with an aggregate fair value of $402.8 million. These digital asset holdings represent the substantial majority of the Company’s total assets. Management views BNB as a strategic treasury asset and intends to continue evaluating opportunities to acquire additional digital assets as part of its capital allocation strategy.
Current report
The Company’s strategy represents a significant departure from traditional corporate treasury strategies, which typically involve holding cash, cash equivalents, and short-term investments. Instead, the Company’s financial condition and results of operations are now significantly influenced by changes in the market price of BNB. Digital asset markets have historically exhibited significant volatility and are subject to evolving regulatory frameworks and technological risks. As a result, fluctuations in the market price of BNB will have a material impact on the Company’s financial condition, results of operations, and the market price of its common stock. Investors should carefully consider the risks associated with the Company’s digital asset holdings and treasury strategy described under “Part II, Item 1A – Risk Factors” in this Quarterly Report on Form 10-Q.
Current report
The Company may in the future generate returns through additional digital asset-related activities such as validation services, lending, and other decentralized finance protocols, though no BNB is currently staked or pledged. The Company’s BNB-focused DAT strategy was launched on August 5, 2025, following the closing of the PIPE Transaction that raised approximately $500 million in cash and digital assets, with up to $750 million in additional proceeds available through warrant exercises. Under the DAT strategy, BNB is the primary treasury reserve asset.
Current report
The Company’s BNB holdings are held in custody through Ceffu, an institutional digital asset custody platform operating within the Binance ecosystem. Ceffu utilizes multi-party computation wallet infrastructure and maintains segregated account structures designed for institutional holders. While Ceffu operates as a separate entity from the Binance exchange, our custody arrangement creates concentration exposure to the broader Binance ecosystem. Disruptions to Ceffu’s operations, changes in its regulatory status, or adverse developments affecting the Binance ecosystem could materially impact our ability to access, transfer, or liquidate our BNB holdings.
Current report
As a result of the implementation of our BNB focused DAT strategy, digital assets, primarily BNB, now represent 93.7% of our total assets, while our Retail and Industry segment operating businesses represent a significantly smaller portion of our overall asset base on economic exposure.
Current report
Key Drivers of Results of Operations
Current report
The Company’s results of operations are influenced by several key factors, including: changes in the market price of BNB and other ancillary digital assets held by the Company; fair value adjustments recognized under applicable accounting standards for digital assets; the generation of airdrop income; operating expenses associated with maintaining the Company’s public company infrastructure; and strategic decisions regarding the acquisition, holding, or disposition of digital assets. Because the Company holds a substantial quantity of digital assets, particularly BNB, changes in the market price of BNB may significantly affect the Company’s reported earnings. These fluctuations may not reflect changes in the Company’s operating performance but instead reflect market-driven changes in the value of its digital asset holdings.
Current report
During the period from October 31, 2025 to January 31, 2026, the Company’s BNB token holdings increased modestly by 0.7%, from 511,932 tokens to 515,544 tokens, reflecting incremental change of 3,612 tokens in holdings during the period. During this same period, the market price of BNB declined significantly by 28.3%, from $1,089 per token, to $781 per token. As a result, the aggregate fair value of the Company’s BNB holdings decreased from $557.4 million to $402.8 million, driven by market price volatility rather than changes in the token quantity. The decline in BNB market prices had a materially greater impact on the carrying value of digital assets than the operating results of the Company’s retail and industry business during the same period.
Current report
In addition to changes in token prices during this period, the Company recognized a substantial decrease in airdrop-related income associated with its digital asset holdings. The Company holds the majority of its BNB assets in Ceffu, an institutional custodian operating within the Binance ecosystem, which enables the Company to maintain eligibility to receive airdrops distributed within the Binance ecosystem. During the three months ended January 31, 2026, airdrop income totaled $1.3 million, representing a decrease of 77.6% compared to $5.8 million recognized during the three months ended October 31, 2025. This substantial decline in airdrop-related income reflects reduced airdrop activity within the Binance ecosystem during the current period. While airdrop income contributed positively to results, it did not offset the impact of the decline in BNB market prices during the quarter.
Current report
In addition to airdrops, a portion of our BNB treasury yield has historically been generated through participation in Binance Launchpool and HODLer Airdrops – platform programs through BNB holders receive newly issued tokens by locking or holding BNB. During the quarter ended January 31, 2026, the frequency and scale of these programs declined materially compared to prior periods, contributing to a reduction in platform-delivered yield. Taken together with the decline in airdrop activity described above, these trends reflect a broader moderation in yield generation during the period. The Company cannot predict the timing, frequency, or magnitude of future Launchpool or HODLer Airdrop allocations, and continued reduction in these programs may adversely affect our treasury yield and results of operations.
Current report
Digital Asset Market Conditions
Current report
Our treasury strategy is designed to accumulate and compound BNB over time, with a focus on growing value of our digital asset holdings on a per-share basis as a key long-term measure of shareholder value creation. Digital asset markets are inherently cyclical, and short-term price fluctuations — while material to our GAAP-reported results in any given quarter — do not alter our management’s conviction in the long-term trajectory of BNB and the broader Binance ecosystem. We believe our disciplined approach to treasury management positions the Company to benefit from market recoveries while managing risk through custody, yield optimization, and strategic capital allocation.
Current report
During the three months ended January 31, 2026, digital asset markets experienced periods of significant price volatility. The market price of BNB fluctuated in response to a variety of factors, including macroeconomic conditions, investor sentiment toward digital assets, developments affecting cryptocurrency exchanges and blockchain networks, and regulatory developments in the United States and other jurisdictions. Because the Company holds a significant quantity of BNB, changes in the market price of BNB had and will continue to have a substantial impact on the Company’s balance sheet and results of operations. Investors should consider that fluctuations in the Company’s financial results during the period were driven primarily to changes in digital asset market prices and airdrop yield rather than changes in the Company’s operating activities.
Current report
Our Retail & Industry Business
Current report
The Company operates its controlled environment agriculture (“CEA”) business within the Retail and Industry segment, which includes the provision of climate control systems for CEA industry. In June 2025, the Company acquired Fat Panda which also operates within this segment. As of January 31, 2026, Fat Panda operates 34 retail locations, including 30 Fat Panda branded stores and 4 Electric Fog branded outlets, along with an e-commerce platform. Fat Panda also manufactures a proprietary line of premium e-liquids in-house and maintains a portfolio of trademarks and related intellectual property. Revenue from CEA equipment and systems represents a relatively small portion of consolidated revenue, totaling $1.1 million for the nine months ended January 31, 2026 and $0.7 million for the three months ended January 31, 2026.
Current report
Subsequent to the quarter end, the Board of Directors has taken steps to reconstitute all four of its standing committees – the Audit, Compensation, Nominating and Governance, and Strategic Committees - with three fully independent directors. The Board believes this action reinforces its commitment to strong corporate governance and shareholder accountability and reflects the Board’s ongoing focus on aligning its structure with best practices for public companies.
Current report
As a result of these governance enhancements and with the termination of an agreement between 10X Capital Partners LLC (“10X Capital Partners”) and YZi Labs Management Ltd. (“YZi Labs”), the Company, through the Strategic Committee, is currently engaged in the process of renegotiating the terms of the Company’s Asset Management Agreement with 10X Capital Partners (the “AMA”) with the goal of achieving market standard arms-length terms, including reduced management fees, for the benefit of all shareholders. The Company believes that amending the AMA to better align its terms with the Company’s current scale and asset profile is in the best interest of shareholders, and is committed to completing this process in an expeditious manner. There can be no assurance, however, that the renegotiation will be completed on terms acceptable to the Company.
Current report
On March 13, 2026, the Company received a letter from YZi Labs Management Ltd. (“YZi Labs”) that requested that the Company fix a record date for determining the stockholders entitled to consent to (1) repeal any provision of the Company’s Amended and Restated Bylaws (the “Bylaws”), in effect at the time such proposal becomes effective, including any amendments thereto, which were not included in the Bylaws that were in effect and were filed with the SEC on July 25, 2025, (2) increase the size of the Board by seven (7) directors to thirteen (13) directors in total pursuant to Article II, Section .02 of the Bylaws, (3) amend Article II, Section .04 of the Bylaws to clarify and affirm stockholders’ ability to fill vacancies on the Board, including those resulting from an increase in the size of the Board by the vote or written consent of the Company’s stockholders or by court order, and (4) elect YZi Labs’ seven (7) nominees: Max S. Baucus, David J. Chapman, Teresa Marie Goody Guillén, Jiajin “Jane” He, Alex Odagiu, Matthew Roszak and Ling “Ella” Zhang, to serve as directors of the Company. The Board will review YZi Labs’ letter to evaluate its validity under the Bylaws, and if such letter is valid the Company will disclose the record date for determining the stockholders entitled to consent to YZi Labs’ proposals.
Current report
Because fair value changes in digital assets are recorded through our consolidated statements of operations, our BNB Treasury Management segment results—and consequently our consolidated net income—will be subject to significant volatility based on fluctuations in the market price of BNB. Investors should expect material period-to-period variations in our reported net income that may bear no relationship to the operating performance of our Retail and Industry segment.
Current report
Revenue for the three months ended January 31, 2026 was $7.3 million, compared to $6.9 million for the three months ended January 31, 2025, representing an increase of $0.4 million, or 6%. The increase in revenue was primarily driven by the CEA equipment and system sales, which contributed $0.6 million during the quarter. This increase was partially offset by $0.2 million reduction in sales from the discontinuation of one product as well as pricing adjustments implemented to recover Canadian excise tax.
Current report
Cost of revenue increased by $0.5 million or 8%, from $5.1 million for the three months ended January 31,2025 to $5.6 million for the three months ended January 31, 2026. The increase was primarily driven by $1.0 million of costs associated with CEA equipment and system revenues, including $0.4 million increase in warranty costs. This increase was partially offset $0.5 million or 5% improvement in margin, resulting from the discontinuation of one lower margin product.
Current report
Total operating expenses
Current report
Total operating expense was $166.1 million for the three months ended January 31, 2026, compared $0.8 million for the three months ended January 31, 2025, representing an increase of $165.3 million, or 20549%. The increase was primarily driven by an unrealized loss of $159.8 million on the remeasurement of digital assets during the current quarter, and higher selling, general and administrative expenses (“SG&A”).
Current report
During the period from October 31, 2025 to January 31, 2026, the Company’s BNB holdings increased modestly by 0.7%, while the market price of BNB declined by 28.3%, from $1,089 per token to $781 per token, resulting in an unrealized loss of $159.8 million. As a result, the unrealized loss recognized during the quarter was driven primarily by market price volatility, rather than changes in the quantity of digital assets held. Management believes this performance reflects broader digital asset market conditions rather than any deterioration in BNC’s underlying business or strategy.
Current report
SG&A expenses increased primarily due to $2.0 million of asset management fees and a $4.7 million increase in professional and advisory fees, which was offset by $2.7 million net decrease in compensation expense. The increase in professional and advisory fees included $1.6 million related to outsourced accounting integration support and other legal fees incurred in connection with ongoing legal matters. The increases were partially offset by a net decrease of $2.7 million in compensation expense, which reflected $1.6 million increase in compensation costs, offset by $4.6 million reversal of stock-based compensation expenses as described inNote 2 – Correction of Error – RUS Compensation.
Current report
In addition, the Company incurred significant costs as a direct result of the shareholder activism campaign initiated by YZi Labs during the quarter ended January 31, 2026. In connection with YZi Labs’ filing of preliminary consent solicitation materials seeking to expand the size of the Board of Directors and elect its own slate of director candidates, and its stated intent to nominate candidates at the Company’s next annual meeting of stockholders, the Company engaged legal, strategic, and communications advisors across multiple disciplines, resulting in $3.1 million in incremental professional and advisory fees during the period. These matters have required significant time and resources from the Board and management and are expected to continue to do so, which could adversely affect the Company’s results of operations. The Company expects these activism-related costs to remain elevated in the near term in connection with these matters. For a more detailed discussion of the risks associated with YZi Labs’ activist campaign, including the potential impact on the Company’s business, operations, and stock price, see Part II, Item 1A,“Risk Factors — Shareholder activism has caused and will continue to cause us to incur substantial costs and divert management’s attention and resources and could disrupt our operations and the trading price of our common stock”.
Current report
Other income (expense), net
Current report
The Company holds the majority of its BNB tokens with Ceffu, an institutional custodian operating within the Binance ecosystem, which enables the Company to maintain eligibility for airdrops distributed within Binance ecosystem. During the three months ended January 31, 2026, the Company recognized $1.3 million of airdrop income, compared to $5.8 million recognized during the three months ended October 31, 2025. This decline reflects reduced airdrop activity within the Binance ecosystem during the current period, which contributed to lower non-operating income. The Company cannot predict the timing or magnitude of future airdrops, and continued reduction in airdrop frequency or size could have an adverse effect on our results of operations.
Current report
Non-GAAP Combined Nine Months Ended January 31, 2026
Current report
Revenues and Cost of revenue
Current report
Revenue for the nine months ended January 31, 2026, was $22.0 million, compared to $21.3 million for the nine months ended January 31, 2025, representing an increase of $0.7 million, or 3%. The increase was primarily driven by $1.1 million of revenue from CEA equipment and systems. This increase was partially offset by $0.4 million decrease in revenue resulting from the discontinuation of one product as well as pricing adjustments implemented to recover Canadian excise tax.
Current report
Cost of revenue increased by $2.0 million or 14%, from $13.8 million for the nine months ended January 31, 2025 to $15.8 million for the nine months ended January 31, 2026. The increase was primarily driven by $1.4 million of costs associated with CEA equipment and systems revenue, which included an additional $0.4 million in warranty costs and a net $0.6 million increase reflecting higher material costs resulting from increased cost per unit following the enactment of new Canadian federal and provincial excise taxes, partially offset by a modest improvement in margins from the discontinuation of one lower margin product.
Current report
Total operating expenses
Current report
Total operating expenses was $86.3 million for the nine months ended January 31, 2026, compared to operating expenses of $5.3 million for the nine months ended January 31, 2025, an increase of $81.0 million, or 1531%. The increase was primarily driven by an unrealized loss of $45.8 million on the remeasurement of digital assets during the nine months ended January 31, 2026, by higher selling, general and administrative expenses, which increased by $30.6 million to $35.4 million.
Current report
As of January 31, 2026, the Company held 515,544 BNB tokens. During the period, the market price of BNB experienced significant volatility, increasing by 32% from $825 per token in August 2025 to $1,089 per token as of October 31, 2025, before declining by 28.3% to $781 per token as of January 31, 2026. As a result, the unrealized loss recognized during the period was driven primarily by fluctuations in market price, rather than changes in the quantity of digital assets held.
Current report
Other income (expense), net
Current report
A substantial portion of the Company’s assets consists of digital assets, primarily BNB. Although digital assets may be traded on various cryptocurrency exchanges, the liquidity of these assets may vary depending on market conditions. Periods of significant volatility or market stress may reduce liquidity, widen bid-ask spreads, and limit the Company’s ability to sell digital assets at favorable prices.
Current report
The Company’s ability to generate liquidity may depend in part on its ability to sell digital assets in the market. If the Company were required to liquidate a significant portion of its BNB holdings to meet liquidity needs, such sales could adversely affect the market price of BNB and reduce the value of the Company’s remaining holdings. Management evaluates the Company’s liquidity requirements on an ongoing basis and may determine to sell or otherwise utilize portions of its digital asset holdings to fund operations, pursue strategic opportunities, or satisfy other capital requirements.
Current report
Digital Asset Treasury Risk Management
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Removed paragraphs (30)
Previous 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.
Previous 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.
Previous 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.
Previous report
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 report
Fat Panda Group of Companies incorporated and commenced active operations on June 1, 2014 and its principal business activities include the manufacture, distribution and sale of vaping products and accessories. The Companies own and operate retail locations in Manitoba, Saskatchewan and Ontario. These locations have the following retail stores.
Previous report
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 report
Changes to United States tariff and import/export regulations may have a material adverse effect on our business, financial condition and results of operations.
Previous report
The United States has recently enacted and proposed to enact significant new tariffs. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our business, financial condition and results of operations. As the Peoples Republic of China (“PRC”) is a particular focus of the tariffs and trade policies, and the Company uses products from the PRC in its product offerings, we expect that there will be disruption in that aspect of our business. We are in the process of searching for alternative suppliers, but there is no assurance that we will be able to find other suppliers at a price that will be reasonable.
Previous report
Our Bookings, Backlog and Revenue- Successor
Previous report
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 report
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 report
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),
Previous report
(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 report
The completion of a customer’s new build facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for these customers to complete a new build project, which corresponds to when we are able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation systems; (vii) the availability of power; and (viii) delays that are typical in completing any construction project.
Previous report
As has historically been the case for the Company at each quarter-end, there remains significant uncertainty regarding the timing of revenue recognition of our backlog as of October 31, 2025.
Previous report
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 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.
Previous report
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 report
Total Operating Income(Expenses)
Previous 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%.
Previous report
Other Income (Expense)
Previous report
Non-GAAP Combined Six Months Ended October 31, 2025
Previous report
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 report
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.
Previous report
Total Operating (Income) Expenses
Previous 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.
Previous report
Other Income (Expense)
Previous report
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 report
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 report
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.
Reworded paragraphs (15)
Previous wording
To supplement our financial results on U.S. generally accepted accounting principles (“GAAP”) basis, we use non-GAAP measures including net bookings, backlog, as well as adjusted net income (loss) which reflects adjustments for certain non-cash expenses such as stock-based compensation, certain debt-related items and depreciation expense. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. For purposes of this Quarterly Report, (i) “adjusted net income (loss)” and “adjusted operating income (loss)” mean GAAP net income (loss) and operating income (loss), respectively, after adjustment for non-cash equity compensation expense, debt-related items and depreciation expense, and (ii) “net bookings” means new sales contracts executed during the quarter for which we received an initial deposit, net of any adjustments including cancellations and change orders during the quarter.
Current wording
To supplement our financial results on U.S. generally accepted accounting principles (“GAAP”) basis, we use non-GAAP measures including net bookings, backlog, as well as adjusted net income (loss) which reflects adjustments for certain non-cash expenses such as stock-based compensation, unrealized loss on digital assets, gain on change in fair value of warrant liability, airdrop income, certain debt-related items and depreciation and amortization expense. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. For purposes of this Quarterly Report, (i) “adjusted net income (loss)” and “adjusted operating income (loss)” mean GAAP net income (loss) and operating income (loss), respectively, after adjustment for non-cash equity compensation expense, unrealized loss on digital assets, airdrop income, certain debt-related items and depreciation & amortization expense, and (ii) “net bookings” means new sales contracts executed during the quarter for which we received an initial deposit, net of any adjustments including cancellations and change orders during the quarter.
Previous wording
Our backlog, remaining performance obligations and net bookings may not be indicative of future operating results, and our customers may attempt to renegotiate or terminate their contracts for a number of reasons, including delays in or inability to obtain project financing or licensing or abandonment of the project entirely. Accordingly, there can be no assurance that contracts included in the backlog or remaining performance obligations will actually generate revenues or when the actual revenues will be generated.
Current wording
Our backlog or remaining performance obligations and net bookings may not be indicative of future operating results, and our customers may attempt to renegotiate or terminate their contracts for a number of reasons, including delays in or inability to obtain project financing or licensing or abandonment of the project entirely. Accordingly, there can be no assurance that contracts included in the backlog or remaining performance obligations will actually generate revenues or when the actual revenues will be generated.
Previous wording
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 wording
In August 2025, the Company initiated a strategic transformation by adopting a digital asset treasury strategy focused on BNB, the native token of the Binance blockchain. Through its wholly owned subsidiary, CEA BRS LLC, a Delaware limited liability company and the sole stockholder of BNC BNB Cayman, a Cayman Islands exempt company, the Company seeks to build and manage a substantial corporate treasury of BNB, providing institutional-grade exposure to blockchain infrastructure.
Previous wording
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 wording
To support this strategy, the Company established CEA BRS LLC, a Delaware limited liability company, as a special purpose entity to hold and manage certain cryptocurrency assets in accordance with the DAT strategy. Additionally, the Company formed BNC BNB Cayman, an exempted company organized under the laws of the Cayman Islands, to facilitate international operations and treasury management. These entities are wholly owned subsidiaries of the Company.
Previous wording
Revenues and Cost of Goods Sold
Current wording
Revenues and Cost of revenue
Previous wording
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.
Current wording
The Company recognized other income of $39.3 million for the three months ended January 31, 2026, compared to $0 for the three months ended January 31, 2025. Other Income for the current period consisted of gain on change in fair value of warrant liability of $38.1 million, currency translation and interest expense on promissory notes related to the Acquisition and airdrop income.
Previous 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.
Current wording
Our financial results for the periods from May 1, 2025 through June 6, 2025, and the nine months ended January 31, 2025 are referred to as those of the “Predecessor” period. Our financial results for the period from June 7, 2025, through January 31, 2026 are referred to as those of the “Successor” period. Our results of operations as reported in our Condensed Consolidated Financial Statements and Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for these periods are prepared in accordance with U.S. GAAP. Although U.S. GAAP requires that we report our results for the period from May 1, 2025 through June 6, 2025 and the period from June 7, 2025 through January 31, 2026 separately, management views our operating results for the nine months ended January 31, 2026 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison of our results to prior periods. We believe we cannot adequately benchmark the operating results of the period from June 7, 2025 through January 31, 2026 against any of the previous periods reported in our Condensed Consolidated Financial Statements and Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) without combining it with the period from May 1, 2025 through June 6, 2025, and do not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding our overall operating performance. Management believes that the key performance metrics for the Successor period when combined with the Predecessor period provide more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, in addition to presenting our results of operations as reported in our Condensed Consolidated Financial Statements in accordance with U.S. GAAP, the tables and discussion below also present the combined results for the nine months ended January 31, 2026. The combined results for the nine months ended January 31, 2026, represent the sum of the reported amounts for the Predecessor period from May 1, 2025 through June 6, 2025 and the Successor period from June 7, 2025 through January 31, 2026. These combined results are not considered to be prepared in accordance with U.S. GAAP and have not been prepared as pro forma results per applicable regulations. The combined operating results do not reflect the actual results we would have achieved absent our acquisition of Fat Panda and are not necessarily indicative of future results. Accordingly, the results for the combined nine months ended January 31, 2026 (prepared on a non-GAAP basis) and nine months ended January 31, 2025 (prepared on a GAAP basis) may not be comparable.
Previous wording
Comparison of the Six Months Ended October 31, 2025 and October 31, 2024
Current wording
Comparison of the Nine Months Ended January 31, 2026, and January 31, 2025
Previous wording
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 wording
The increase in SG&A was mainly attributable to a one-time warrant issuance cost of $14.6 million, asset management fees of $3.8 million, an increase of $7.5 million in professional and contractor fees, and $0.5 million in additional insurance costs associated with BNB treasury operations. Of the increase in professional and advisory fees, $3.1 million is associated with our ongoing response to an activist shareholder campaign while $4.4 million is associated with accounting and other legal fees incurred in connection with the Fat Panda Acquisition and PIPE Transaction. Advertising and marketing expenses also increased by $4.6 million from $0.5 million during the nine months ended January 31, 2025 to $5.1 million during the nine months ended January 31, 2026 as the Company incurred additional marketing costs in connection with PIPE Transaction and ATM sales during the current quarter.
Previous 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.
Current wording
We recognized other income of $251.1 million for the nine months ended January 31, 2026, compared to $0 for the nine months ended January 31, 2025. Other Income for the current period consisted of airdrop income, gain on change in fair value of warrant liability, and interest and debt discount amortization on notes related to the Acquisition.
Previous wording
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 wording
Our primary sources of liquidity include cash and cash equivalents, and, beginning in August 2025, digital assets held in our treasury. As of January 31, 2026, we had cash and cash equivalents of $11.3 million and digital assets measured at fair value of $409.2 million, as presented in our condensed consolidated unaudited balance sheets. We did not have any borrowings outstanding under a credit facility as of January 31, 2026.
Previous wording
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 wording
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 inNote 3 – Digital Assets to our condensed consolidated financial statements, our digital assets consist primarily of BNB.
Previous wording
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.
Current wording
Our liquidity and capital resources are subject to volatility in the market price of BNB and other digital assets. A decline in the market price of BNB or other digital assets would reduce the fair value of our digital assets and could adversely affect our ability to fund operations, invest in growth, or meet obligations as they come due. We manage this risk by maintaining fiat liquidity; however, these measures may not fully mitigate market, custodial or regulatory risks. A 10% decline in the price of BNB as of January 31, 2026, holding all other factors constant, would have resulted in an additional unrealized loss of approximately $40.3 million. Conversely, a 10% increase would have resulted in an additional unrealized gain of approximately $40.3 million. These potential fluctuations significantly exceed the operating income or loss expected from our Retail and Industry segment.
Previous 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):
Current wording
The following summarizes our approximate cash flows for the period from June 7, 2025 through January 31, 2026 (Successor), for the period May 1, 2025 through June 6, 2025 (Predecessor) and for the nine months ended January 31, 2025 (Predecessor):
Previous 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.
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 of January 31, 2026, we had no off-balance sheet arrangements. During the quarter ended January 31, 2026, we did not engage in any off-balance sheet financing activities other than those included in the discussed above and those reflected inNote 12 – Commitments and Contingenciesof our condensed consolidated financial statements.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Our backlog, remaining performance obligations, and net bookings may not be indicative of future operating results, and our customers may attempt to renegotiate or terminate their contracts for a number of reasons, including delays in or inability to obtain project financing or licensing or abandonment of the project entirely. Accordingly, there can be no assurance that contracts included in backlog or remaining performance obligations will generate revenues or when the revenues will be generated. Net bookings and backlog are considered non-GAAP financial measures, and therefore, they should be considered in addition to, rather than as a substitute for, our GAAP measures for recognized revenue, deferred revenue, and remaining performance obligations. Further, we can provide no assurance as to the profitability of our contracts reflected in remaining performance obligations, backlog and net bookings.
Previous report — wording carried elsewhere
Revenues and Cost of Goods Sold