UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~OCTOBER~~JANUARY 31, ~~2025~~2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-41266

CEA INDUSTRIES INC.

(Exact name of registrant as specified in its charter)

Nevada

27-3911608

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

385 South Pierce Avenue, Suite C
Louisville, Colorado		80027
(Address of principal executive offices)		(Zip code)

(303) 993-5271

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00001 par value	BNC	Nasdaq Capital Market
Warrants to purchase common stock	BNCW	Nasdaq Capital Market
Preferred stock purchase rights		Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of ~~December~~March 1213, ~~2025~~2026, the number of outstanding shares of common stock of the registrant was 4442,~~062~~895,~~938~~841.

CEA Industries Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended ~~October~~January 31, ~~2025~~2026

Table of Contents

	Page
Cautionary Statement	ii
PART I — FINANCIAL INFORMATION	2
Item 1. Financial Statements (Unaudited)	2
Condensed Consolidated Balance Sheets as of October 31, 2025 (Successor) (Unaudited) and April 30, 2025 (Predecessor) ( Audited)	2
Condensed Consolidated Balance Sheets as of January 31, 2026 (Successor) (Unaudited) and April 30, 2025 (Predecessor) (Audited)	2
Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended October 31, 2025 and the Three Months Ended October 31, 2024 (Predecessor), for the Period from June 7, 2025 through October 31, 2025 (Successor), the Period from May 1, 2025 through June 6, 2025 (Predecessor), and the Six Months Ended October 31, 2024 (Predecessor) (Unaudited)	3
Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended January 31, 2026 (Successor) and the Three Months Ended January 31, 2025 (Predecessor), for the Period from June 7, 2025 through January 31, 2026 (Successor), the Period from May 1, 2025 through June 6, 2025 (Predecessor), and the Nine Months Ended January 31, 2025 (Predecessor) (Unaudited)	3
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended October 31, 2025,for the Period from June 7, 2025 through October 31, 2025 (Successor), the Period from May 1, 2025 through June 6, 2025 (Predecessor), the Three Months Ended October 31, 2024 (Predecessor) and the Six Months Ended October 31, 2024 (Predecessor) (Unaudited)	4
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended January 31, 2026, for the Period from June 7, 2025 through January 31, 2026 (Successor), the Period from May 1, 2025 through June 6, 2025 (Predecessor), the Three Months Ended January 31, 2025 (Predecessor) and the Nine Months Ended January 31, 2025 (Predecessor) (Unaudited)	4
Condensed Consolidated Statements of Cash Flows for the Period from June 7, 2025 through October 31, 2025 (Successor), the Period from May 1, 2025 through June 6, 2025 (Predecessor), and the Six Months Ended October 31, 2024 (Predecessor) (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Period from June 7, 2025 through January 31, 2026 (Successor), the Period from May 1, 2025 through June 6, 2025 (Predecessor), and the Nine Months Ended January 31, 2025 (Predecessor) (Unaudited)	5
Notes to the Condensed Consolidated Financial Statements	6
Notes to the Condensed Consolidated Unaudited Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2928
Item 3. Quantitative and Qualitative Disclosures About Market Risk	3635
Item 4. Controls and Procedures	3635
PART II — OTHER INFORMATION	3736
Item 1. Legal Proceedings	3736
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 1A. Risk Factors	37
Item 6. Exhibits	39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 5. Other Information	41
Item 6. Exhibits	41

In this Quarterly Report on Form 10-Q, unless otherwise indicated, the “Company”, “we”, “us” or “our” refer to CEA Industries Inc. and, where appropriate, its wholly owned subsidiaries.

CAUTIONARY STATEMENT

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical fact but are based on current management expectations that involve substantial risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these terms or other similar words. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements including, but not limited to, any projections of revenue, gross profit, earnings or loss, tax provisions, cash flows or other financial items; any statements of the plans, strategies or objectives of management for future operations; any statements regarding current or future macroeconomic or industry-specific trends or events and the impact of those trends and events on us or our financial performance; any statements regarding pending investigations, legal claims or tax disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: about our digital asset treasury strategy, our expectations regarding the market price and adoption of BNB, the native utility token of the Binance ecosystem, a community-driven, decentralized blockchain network originally initiated by the Binance exchange, the regulatory environment applicable to digital assets, our ability to manage risks associated with holding digital assets, and statements about:

● the ~~longevity of the~~ Company’s ~~position~~digital asasset treasury strategy, including expectations regarding the ~~largest~~acquisition, holding, and potential disposition of BNB ~~treasury~~and inother ~~the~~digital ~~world~~assets; ● the long-term growth, adoption, and ~~adoption~~value of the ~~BNB~~Binance ecosystem; ●and ~~BNC’s~~BNB ~~role~~tokens; in● ~~advancing~~the ~~BNB~~Company’s ~~global~~ability ~~adoption;~~to ●maintain ~~the~~or ~~growth~~grow ofits ~~interest~~position ~~from~~as ~~institutional~~a ~~partners~~significant ~~and~~holder ~~investors~~of ~~worldwide~~BNB; ● ~~BNC being~~ the ~~most~~volatility ~~trusted~~of ~~and strategically positioned~~ digital asset ~~treasury;~~prices, ●including ~~progress~~BNB, and ~~achievement~~the impact of such volatility on the Company’s ~~goals~~financial ~~regarding~~condition ~~BNB~~and ~~acquisition~~results ~~and~~of ~~staking,~~operations; ● the ~~long-term~~regulatory ~~value~~environment offor ~~BNB~~digital assets, ~~continued~~including ~~growth~~potential classification of digital assets as securities and ~~advancement~~the impact of regulatory developments on the Company’s ~~BNB~~digital ~~treasury~~asset ~~strategy~~holdings and ~~the~~operations; ~~applicable~~● ~~benefits~~the toliquidity ~~the~~of ~~Company;~~digital ~~and;~~assets, ●including ~~BNC~~the Company’s ability to ~~scale~~convert ~~its~~digital ~~holdings~~assets ~~and~~to ~~introduce~~fiat ~~innovative~~currency ~~structures,~~on ~~which~~acceptable ~~result~~terms; in● ~~lasting~~the ~~value~~performance toof ~~shareholders.;~~the ●Company’s ~~other~~operating ~~factors~~businesses, ~~that~~including ~~could~~the ~~cause~~Fat ~~actual~~Panda ~~results~~retail tovaping ~~differ~~operations ~~materially~~and ~~from~~our ~~those~~climate ~~expressed~~control insystems ~~any~~segment; ~~forward-looking~~● ~~statement~~the ~~made~~Company’s byability orto onremediate ~~behalf~~material ofweaknesses ~~BNC~~in internal control over financial reporting.

Forward-looking statements in this Quarterly Report also include statements regarding: the effects of the shareholder rights agreement on potential change of control transactions; the Company’s liquidity and capital resources; the Company’s ability to fund operations from its digital asset holdings; expectations regarding custodial and counterparty risks associated with third-party exchanges; the integration and performance of the Fat Panda acquisition; and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company.

These factors should not be construed as exhaustive and should be read with the other cautionary statements in this report.

Although we believe that we use reasonable assumptions for these forward-looking statements, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in “Item 1A – Risk Factors” in our Transitional Annual Report on Form 10-KT for the four months ended April 30, 2025 and in Part II, Item 1A of this Quarterly Report on Form 10-Q, as updated from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”). You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The forward-looking statements and projections contained in this Quarterly Report on Form 10-Q are intended to be within the meaning of “forward-looking statements” in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CEA Industries Inc.

Condensed Consolidated Balance Sheets

	Successor			Predecessor
	October 31, 2025			April 30, 2025
	January 31, 2026			April 30, 2025
	(Unaudited)			(Audited)
ASSETS
Current Assets
Current assets
Cash and cash equivalents	$	3211,~~535~~323,~~255~~024		$	2,148,606
Digital asset receivable		20,879,068			-
Accounts receivable, net		66,016			228,507
Accounts receivable, net		83,680			228,507
Related parties receivables, net		-			668,301
Related party receivables, net		-			668,301
Receivables, net		-			668,301
Contract assets, net		233,274			-
Inventory, net		3,488,357			3,293,947
Digital assets, current		6,343,853
Prepaid expenses and other		873,408			119,012
Inventory, net		3,864,974			3,293,947
Total Current Assets		58,093,042			6,458,373
Prepaid expenses and other		442,063			119,012
Noncurrent Assets
Income tax receivable		185,202			-
Property and equipment, net		272,172			322,880
Total current assets		22,458,406			6,458,373
Goodwill		4,032,316			-
Non-current assets
Digital assets		547,108,026			-
Property and equipment, net		270,133			322,880
Intangible assets, (net of accumulated amortization of $208,992)		4,908,861			-
Intangible assets, net		4,917,213			-
Deposits		228,887			217,379
Digital assets, net of current portion		402,836,035			-
Goodwill		4,170,151			-
Deposits		235,037			217,379
Deferred tax assets		-			154,951
Operating lease right-of-use asset		1,~~821~~886,~~417~~600			1,890,013
Total Non-Current Assets		558,371,679			2,585,223
Total non-current assets		414,315,169			2,585,223
TOTAL ASSETS	$	~~616~~436,~~464~~773,~~721~~575		$	9,043,596
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	56,~~505~~283,~~055~~380		$	2,255,445
Deferred revenue		~~739~~501,~~643~~182			-
Note payable		3,973,720			-
Related party note payable		367,150			-
Related party note payable, net of discount		356,900			-
Income taxes payable		13,054			105,476
Note payable		356,900
Current portion of operating lease liability		709,245			528,914
Income taxes payable		-			105,476
Promissory note payable		694,684			-
Current portion of operating lease liability		671,520			528,914
Royalty liabilities		-			18,051
Total Current Liabilities		11,246,838			2,907,886
Total current liabilities		8,568,695			2,907,886
Noncurrent Liabilities
Non-current liabilities
Operating lease liability, net of current portion		1,~~187~~236,~~373~~830			1,374,639
Deferred tax liabilities		191,~~623~~263,~~329~~118			-
Related party convertible note payable		727,922			-
Convertible promissory note payable		750,022			-
Related party note payable, net of discount		657,095			-
Warrant liabilities - stapled warrants		60,070,872			-
Warrant Liabilities - Stapled Warrants		98,132,639			-
Total non-current liabilities		63,320,842			1,374,639
Total Noncurrent Liabilities		120,328,358			1,374,639
TOTAL LIABILITIES		71,889,537			4,282,525
TOTAL LIABILITIES		131,575,196			4,282,525
Commitments and contingencies (Note 12)
Commitments and Contingencies (Note 12)		-			-
SHAREHOLDERS’ EQUITY
Successor
Common stock $0.00001 par value; 200,000,000 authorized; 45,321,002 shares issued and outstanding		454			-
Common stock $0.00001 par value; 200,000,000 authorized; 43,673,955 shares issued and outstanding		437			-
Common stock, unlimited authorized; 1,410 shares issued and outstanding		-			401
Additional paid-in capital		~~248~~235,~~946~~422,~~201~~023			-
Retained earnings		~~235~~129,~~992,~~420,280			4,837,746
Accumulated comprehensive Income (Loss)		(49,550	)		(77,076	)
Accumulated other comprehensive income (loss)		41,298			(77,076	)
Total Shareholders’ Equity		484,889,525			4,761,071
Total shareholders’ equity		364,884,038			4,761,071
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	~~616~~436,~~464~~773,~~721~~575		$	9,043,596

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

CEA Industries Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

	Successor			Predecessor			Successor			Predecessor		Predecessor
	Successor			Predecessor			Successor			Predecessor
	Three Months Ended October 31, 2025			Three Months Ended October 31, 2024			Period from June 7 through October 31, 2025			Period from May 1 through June 6, 2025		Six Months Ended October 31, 2024
	Three Months Ended January 31, 2026			Three Months Ended January 31, 2025			Period from June 7, 2025 through January 31, 2026			Period from May 1 through June 6, 2025		Nine Months Ended January 31, 2025
Revenue	$	7,~~143~~334,~~485~~626		$	76,~~436~~908,~~751~~817		$	1119,~~720~~055,~~973~~752		$	2,927,689	$	1421,~~405~~313,~~418~~671
Cost of revenue		5,~~050~~571,~~228~~329			45,~~591~~146,~~637~~901			813,~~256~~827,~~041~~593			2,001,537		813,~~652~~824,~~017~~712
Gross profit		21,~~093~~763,~~257~~297			21,~~845~~761,~~114~~916			35,~~464~~228,~~932~~159			926,152		57,~~753~~488,~~401~~959
Operating (income) expenses:
Operating expenses
Advertising and marketing expenses		4284,~~655,063~~366			~~184~~191,~~013~~531			45,~~726~~010,~~687~~953			63,202		~~297~~490,~~205~~008
Product development costs		-			-						-		-
Unrealized loss on digital assets		159,791,308			-			45,757,590			-		-
Unrealized (gain)/loss on digital assets		(114,033,718	)		-			(114,033,718	)		-		-
Selling, general and administrative expenses		5,997,657			612,731			34,599,188			842,348		4,798,756
Selling, general and administrative expenses		21,666,564			2,284,433			28,604,021			842,348		4,215,452
Total operating expenses		166,073,331			804,262			85,367,731			905,550		5,288,764
Total operating (income) expenses		(87,712,091	)		2,468,446			(80,703,010	)		905,550		4,512,657
Operating income (loss)		(164,310,034	)		957,654			(80,139,572	)		20,602		2,200,195
Operating income (loss)		89,805,348			376,668			84,167,942			20,602		1,240,744
Other income (expense), net
Airdrop income		51,~~827~~265,~~578~~452			-			57,~~827~~093,~~578~~030			-		-
Gain on change in fair value of warrant liability		~~206~~38,~~818~~061,~~087~~767			-			~~206~~244,~~818~~879,~~087~~854			-		-
Interest expense/amortization of debt discount		(392,228	)		-			(664,257	)		-		-
Interest expense		(158,330	)		-			(822,607	)		-		-
Other income (expense), net		~~(254~~176,~~515~~792	)		-			(~~254~~80,~~513~~223	)		-		-
Total other income (expense)		211,998,922			-			211,726,895			-		-
Total other income, net		39,345,681			-			251,070,054			-		-
Income before provision for income taxes		301,804,270			376,668			295,894,837			20,602		1,240,744
Income (loss) before income tax expense (benefit)		(124,964,353	)		957,654			170,930,482			20,602		2,200,195
Provision for income taxes		18,161,497			85,051			18,100,461			1,589		240,704
Income tax expense (benefit)		(18,392,213	)		184,337			(291,754	)		1,589		426,838
Net income (loss)	$	~~283~~(106,~~642~~572,~~773~~140	)	$	~~291~~773,~~617~~317		$	~~277~~171,~~794~~222,~~376~~236		$	19,013	$	1,~~000~~773,~~040~~357
Other comprehensive income (loss)
Foreign currency translation adjustment		(290,~~686~~848	)	$	(21248,~~447~~695	)		~~(49~~41,~~550~~298	)		34,825		10(237,~~784~~911	)
Other comprehensive income (loss), net of tax	$	283,640,087		$	270,170		$	277,744,826		$	53,838	$	1,010,824
Total comprehensive income (loss)	$	(106,481,292	)	$	524,622		$	171,263,534		$	53,838	$	1,535,446
Net income per share of common stock attributable to common stockholders
Net income (loss) per share of common stock attributable to common stockholders
Basic	$	5(2.3900	)	$	~~206~~548.8245		$	8.4729		$	13.48	$	~~709~~1,257.2570
Diluted	$	5(2.3600	)	$	~~206~~548.8245		$	8.4323		$	13.48	$	~~709~~1,257.2570
Weighted average number of common shares outstanding					-
Basic		5253,~~586~~180,~~930~~317			1,410			3220,~~780~~666,~~642~~014			1,410		1,410
Diluted		5253,~~901~~180,~~925~~317			1,410			3220,~~960~~800,~~249~~037			1,410		1,410

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

CEA Industries Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

	Number of Shares			Amount			Paid in Capital			Retained Earnings			Comprehensive Income (Loss)			Total
	Common Stock						Additional Paid in			Retained			Accumulated Other Comprehensive
	Number of Shares			Amount			Capital			Earnings			Income (Loss)			Total
Successor
	Common Stock
Balance, November 1, 2025		45,321,002		$	454		$	248,946,201		$	235,992,420		$	(49,550	)	$	484,889,525
	Number of Shares			Amount			Additional Paid in Capital			Retained Earnings			Accumulated Comprehensive Income (Loss)			Total
Repurchase of common stock		(1,647,047	)		(17	)		(8,883,941	)					-			(8,883,958	)
Successor
Stock based compensation expense		-						(4,640,237	)								(4,640,237	)
Balance, July 31, 2025		860,457		$	9		$	54,597,106		$	(47,650,353	)	$	(46,864	)	$	6,899,898
Foreign currency translation adjustment														90,848			90,848
Issuance of common stocks and warrants in private offering, net of issuance costs of $9,308,741		41,754,478			418			185,775,901			-			-			185,776,319
Net loss											(106,572,140	)					(106,572,140	)
Issuance of common stocks via ATM, net of issuance costs		856,275			8			12,928,313			-			-			12,928,321
Balance, January 31, 2026		43,673,955		$	437		$	235,422,023		$	129,420,280		$	41,298		$	364,884,038
Exercise of warrants		2,376,302			24			-			-			-			24
Repurchase of common stock		(529,170	)		(5	)		(4,385,566	)		-			-			(4,385,571	)
Stock based compensation expenses for options		-			-			3,799			-			-			3,799
Common shares issued to directors on settlement of restricted stock units		2,660			-			26,648			-			-			26,648
Foreign Currency Translations		-			-			-			-			(2,686	)		(2,686	)
Net income		-			-			-			283,642,773			-			283,642,773
Balance, October 31, 2025		45,321,002		$	454		$	248,946,201		$	235,992,420		$	(49,550	)	$	484,889,525

	Common Stock						Additional Paid in			Retained			Accumulated Other Comprehensive
	Number of Shares			Amount			~~Additional Paid in~~ Capital			~~Retained~~ Earnings			~~Accumulated Comprehensive~~ Income (Loss)			Total
Successor
Balance, June 7, 2025		802,346		$	8		$	49,613,146		$	(41,801,956	)	$	-		$	7,811,198
Common shares issued on settlement on vesting of restricted stock units issued to directors		4,189			-			33,226			-			-			33,226
Common shares issued to directors on settlement of restricted stock units		4,189			-			49,379			-			-			49,379
Stock based compensation expenses for options		-			-			7,854			-			-			7,854
Stock based compensation expense		-			-			10,841			-			-			10,841
Fair value of restricted stock units issued to directors		-			-			2,329,698			-			-			2,329,698
Fair value of restricted stock units issued to employees		-			-			2,329,679			-			-			2,329,679
Common shares issued on acquisition of Fat Panda		39,000			1			313,950			-			-			313,951
Issuance of common stocks and warrants in private offering, net of issuance costs of $9,308,741		41,754,478			418			185,775,901			-			-			185,776,319
Issuance of shares and warrants in private offering, net of issuance costs of $18,530,076		41,754,478			418			185,775,901			-			-			185,776,319
Issuance of shares via ATM, net of issuance costs		856,275			8			12,928,313			-			-			12,928,321
Issuance of 856,275 shares via ATM, net of issuance costs		856,275			8			12,928,313			-			-			12,928,321
Issuance of shares via ATM, net of issuance costs		856,275			8			12,928,313			-			-			12,928,321
Exercise of warrants		2,393,884			24						-			-			24
Exercise of warrants		2,393,884			24			-			-			-			24
Repurchase of common stock		(2,176,217	)		(22	)		(13,269,507	)		-			-			(13,269,529	)
Repurchase of common stock		(529,170	)		(5	)		(4,385,566	)		-			-			(4,385,571	)
Foreign currency translation adjustment		-			-			-			-			41,298			41,298
Foreign currency translation		-			-			-			-			(49,550	)		(49,550	)
Net income		-			-			-			171,222,236			-			171,222,236
Net profit (loss)		-			-			-			277,794,376			-			277,794,376
Balance, January 31, 2026		43,673,955		$	437		$	235,422,023		$	129,420,280		$	41,298		$	364,884,038
Balance, October 31, 2025		45,321,002		$	454		$	248,946,201		$	235,992,420		$	(49,550	)	$	484,889,525

	Common Stock
	Shares		Amount		Capital		Earnings		Income (Loss)			Total
	Shares		Amount		Additional Paid in Capital		Retained Earnings		Accumulated Comprehensive Income (Loss)			Total
	Common Stock				Additional Paid in		Retained		Accumulated Other Comprehensive
	Shares		Amount		Capital		Earnings		Income (Loss)			Total
Predecessor
Balance, May 1, 2025		1,410	$	401	$	-	$	4,837,746	$	(77,076	)	$	4,761,071
Foreign Currency Translations		-		-		-		-		34,825			34,825
Foreign currency translation adjustment		-		-		-		-		34,825			34,825
Net income		-		-		-		19,013		-			19,013
Balance, June 6, 2025		1,410	$	401	$	-	$	4,856,759	$	(42,251	)	$	4,814,909

	Common Stock				Additional Paid in		Retained		Accumulative Other Comprehensive
	Shares		Amount		~~Additional Paid in~~ Capital		~~Retained~~ Earnings		~~Accumulative Comprehensive~~ Income			Total
Predecessor
Balance, August 1, 2024		1,410	$	401	$	-	$	4,976,240	$	(43,926	)	$	4,932,715
Balance, November 1, 2024		1,410	$	401	$	-	$	5,267,857	$	(65,373	)	$	5,202,885
Foreign Currency Translations		-		-		-		-		(21,447	)		(21,447	)
Foreign currency translation adjustment		-		-		-		-		(248,695	)		(248,695	)
Net income		-		-		-		~~291~~773,~~617~~317		-			~~291~~773,~~617~~317
Balance, October 31, 2024		1,410	$	401	$	-	$	5,267,857	$	(65,373	)	$	5,202,885
Balance, January 31, 2025		1,410	$	401	$	-	$	6,041,174	$	(314,068	)	$	5,727,507

	Common Stock				Additional Paid in		Retained		Accumulative Other Comprehensive
	Shares		Amount		~~Additional Paid in~~ Capital		~~Retained~~ Earnings		~~Accumulated Comprehensive~~ Income ~~(Loss)~~			Total
Predecessor
Balance, May 1, 2024		1,410	$	401	$	-	$	4,267,817	$	(76,157	)	$	4,192,061
Foreign Currency Translations		-		-		-		-		10,784			10,784
Foreign currency translation adjustment		-		-		-		-		(237,911	)		(237,911	)
Net income		-		-		-		1,~~000~~773,~~040~~357		-			1,~~000~~773,~~040~~357
Net income (loss)		-		-		-		1,~~000~~773,~~040~~357		-			1,~~000~~773,~~040~~357
Balance, October 31, 2024		1,410	$	401	$	-	$	5,267,857	$	(65,373	)	$	5,202,885
Balance, January 31, 2025		1,410	$	401	$	-	$	6,041,174	$	(314,068	)	$	5,727,507

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

CEA Industries Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Successor			Predecessor			Predecessor
	Consolidated			Fat Panda group			Fat Panda group
	Period from June 7 through January 31, 2026			Period from May 1 through Jun 6, 2025			Period from May 1 through January 31, 2025
	USD			USD			USD
Cash flows from operating activities
	Period from June 7 through October 31, 2025			Period from May 1 through Jun 6, 2025			Period from May 1 through October 31, 2024
Net income	$	171,222,236		$	19,013		$	1,773,357
Cash flows from operating activities:
Net income	$	277,794,376		$	19,013		$	1,000,040
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization		~~257~~396,~~168~~947			13,258			5082,~~307~~668
Share-based compensation		460,~~700,457~~220			-			-
Amortization of debt discount		94112,~~826~~750			-			-
Non-cash income from airdrops		(57,~~827~~093,~~578~~030	)		-			-
Unrealized gain on digital assets		(114,033,718	)
Non-cash fees paid in digital assets		604,155
Gain on change in fair value of warrant liability		(206,818,087	)
Unrealized loss on digital assets		45,757,590			-			-
Gain/Loss on disposal of assets		581			-			-
Change in fair value of warrant liabilities		(244,879,854	)		-
Loss on disposal of assets		580			-			-
Changes in operating assets and liabilities:
Digital Assets-AR		(27,406	)		-			-
Accounts receivable		67,051			53,226			39,578
Accounts receivable		48,925			53,226			524
Income taxes payable		(276,404	)		1,589			363,326
Income taxes payable		(295,014	)		1,589			(129,283	)
Inventory		(160,671	)		(362,569	)		135,280
Inventory		112,365			(362,569	)		(586,407	)
Prepaid expenses		1,183,283			6,632			(66,065	)
Prepaid expenses		992,638			6,632			(16,426	)
Accounts payable and accrued liabilities		837,435			35,336			(2,501,351	)
Accounts payable and accrued liabilities		212,505			35,336			50,103
Lease liabilities		24,347			256			49,548
Lease Liabilities		3,319			256			59,343
Deferred revenue		34,967			-			-
Deferred Revenue		273,558			-			-
Royalty		-			(5,183	)		(21,988	)
Royalty		-			(5,183	)		(17,731	)
Related parties		-			-			(19,493	)
Contract Assets		1,054			-			-
Contract assets		1,054			-			-
Deferred tax asset (liabilities)		18,395,475			-			(142,667	)
Deferred tax asset		-			-			(140,869	)
Net cash provided by (used in) operating activities		(24,114,556	)		(238,442	)		267,803
Net cash used in operating activities		(32,107,342	)		(238,442	)		(306,009	)
Cash from investing activities
Cash flows from investing activities
Cash paid for acquisitions of Fat Panda		(10,~~325~~398,~~769~~134	)		-			-
Purchase of Digital Assets		(174,900,038	)		-			-
Purchase of digital assets		(175,250,249	)		-			-
Purchases of property and equipment		(9,~~314~~437	)		-			(1956,~~749~~153	)
Net cash used in investing activity		(185,~~235~~657,~~121~~820	)		-			(1956,~~749~~153	)
Cash from financing activities
Cash flows from financing activities
Proceeds from note payable		3,910,282			-			-
Proceeds from notes payable		3,910,282			-			-
Proceeds from issuance of common stock and warrants in private offering		226,837,431			-			-
Proceeds from issuance of common stock and warrants in PIPE offering		226,837,431			-			-
Issuance cost of common stock and warrants in private offering		(9,308,741	)		-			-
Issuance cost of common stock and warrants in PIPE offering		(9,308,741	)		-			-
Warrants exercised		24
Proceeds from issuance of common stock		12,928,321			-			-
Proceeds from issuance of common stocks (ATM Sales)		12,928,330			-			-
Warrants exercised		24			-			-
Repurchase of shares (Treasury shares)		(4,000,000	)		-			-
Repurchase of shares		(12,774,165	)		-			-
Net cash used in financing activity		230,367,326			-			-
Repayments from notes payable		(3,972,088	)
Net change in cash		21,017,649			(238,442	)		248,054
Net cash provided by financing activity		217,621,064			-			-
Effect of exchange rate changes on cash		70,195			13,620			(27,424	)
Net decrease in cash and cash equivalents		(144,098	)		(238,442	)		(362,162	)
Cash, beginning of period		11,447,411			2,148,606			-
Effect of exchange rate changes on cash and cash equivalents		12,076			13,620			(90,835	)
Cash, end of period	$	32,535,255		$	1,923,784		$	220,630
Cash and cash equivalents, beginning of period		11,455,046			2,148,606			2,076,614
Non-cash investing and financing activities:
Cash and cash equivalents, end of period	$	11,323,024		$	1,923,784		$	1,623,617
Issuance of common stock for Fat Panda acquisition	$	313,950
Non-cash Investing and Financing Activities:
CRA Indemnity Note		356,900
Proceeds from issuance of common stock for Fat Panda acquisition	$	(313,950	)	$	-		$	-
Issuance of related party notes for Fat Panda acquisition		1,245,768
Accrued share repurchase liability	$	(495,365	)	$	-		$	-
In-kind digital assets contribution received against issuance of equity and warrants in private offerings		273,198,354
CRA indemnity note	$	361,596		$	-		$	-
In-kind digital assets acquired from PIPE offering proceeds		(273,198,354	)
Issuance of related party notes for Fat Panda acquisition	$	1,262,158		$	-		$	-
Repurchase of shares outstanding payment to sales agent		(385,572	)
In-kind digital assets contribution received against issuance of equity and warrants in PIPE offerings	$	273,198,354		$	-		$	-
In-kind digital assets acquired from PIPE offerings proceeds	$	(273,198,354	)	$	-		$	-
Supplemental cash flow information
Cash paid for interest	$	600,000		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	570,644

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

CEA Industries Inc.

Notes to Condensed Consolidated Statements Financial Statements

(Unaudited)

Note 1 – Nature of Operations

Description of Business

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

In August 2025, the Company initiated a strategic transformation by adopting a digital asset treasury strategy focused exclusively on ~~Binance Coin (“~~BNB”), the native token of the BNB Chain ~~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~~ Company seeks to build and manage the largest corporate treasury of BNB, providing institutional-grade exposure to blockchain infrastructure ~~and~~ and decentralized finance (DeFi).

The Company’s treasury operations currently include acquiring and holding BNB onand the Company may generate income from airdrops received in connection with its ~~condensed~~BNB ~~consolidated~~holdings. ~~balance~~The ~~sheet~~Company ~~and~~may ~~generating~~in ~~income~~the future generate returns through additional digital asset-related activities such as validation services, lending, and other ~~DeFi~~decentralized finance protocols, though no BNB is currently staked or pledged. ~~This~~The ~~strategy~~Company’s ~~commenced~~BNB-focused Digital Asset Treasury (“DAT”) strategy was on August 5, 2025, following the closing of a private placement that raised approximately $500 million (the “PIPE Transaction”), with up to $750 million in additional proceeds available through warrant exercises. ~~This~~Under ~~capital raise supports~~ the ~~implementation of the Company’s BNB-focused Digital Asset Treasury (“~~DAT”) strategy, ~~under which~~ BNB ~~serves~~is as the primary treasury reserve asset.

~~To support~~In connection with this ~~strategy,~~strategic shift, the Company ~~established~~changed ~~CEA~~its ~~BRS~~Nasdaq ~~LLC,~~ticker asymbol ~~Delaware~~from ~~limited~~“VAPE” ~~liability~~to ~~company~~“BNC” on August 6, as2025, areflecting the ~~special~~Company’s ~~purpose~~strategic ~~entity~~focus toon ~~hold and~~BNB ~~manage~~as ~~certain~~its ~~cryptocurrency~~primary ~~assets~~treasury asset inwhile ~~accordance~~continuing ~~with~~its ~~the~~core ~~DAT~~business ~~strategy~~operations. ~~Additionally,~~While the Company ~~formed~~continues ~~BNC~~to ~~BNB~~operate ~~Cayman,~~its anlegacy ~~exempted company~~business ~~organized~~and ~~under~~beginning in the ~~laws~~second fiscal ofquarter ~~the~~ended ~~Cayman~~October ~~Islands~~31, to2025, ~~facilitate~~its ~~international~~financial ~~operations~~results ~~and~~also ~~treasury~~reflect ~~management.~~the ~~These~~implementation ~~entities are wholly owned subsidiaries~~ of ~~the~~its ~~Company~~DAT.

InAdditionally, ~~connection~~on ~~with~~June ~~this~~6, ~~strategic~~2025 ~~shift~~(the “Acquisition Date”), the Company ~~changed~~completed ~~its~~the ~~Nasdaq~~acquisition ~~ticker~~of ~~symbol~~Fat ~~from~~Panda ~~“VAPE”~~Ltd. ~~to “BNC”~~and onits ~~August~~related 6,entities ~~2025,~~(“Fat ~~reflecting~~Panda”) ~~its~~(the ~~new~~“Fat ~~identity~~Panda asAcquisition”), entering the ~~BNB~~Canadian ~~Network~~nicotine ~~Company~~vape ~~while~~industry. ~~continuing~~This ~~its~~acquisition ~~core~~aligned ~~business~~with ~~operations. The~~the Company’s ~~continues~~strategy toat ~~operate~~that ~~its~~time ~~legacy~~to ~~business,~~focus ~~and~~on ~~beginning~~high-growth, regulated inconsumer ~~the~~markets ~~second~~and ~~fiscal~~provide ~~quarter~~a ~~ending~~vertically ~~October~~integrated ~~31,~~infrastructure ~~2025,~~to ~~its~~support ~~financial results~~retail ~~also~~expansion ~~reflect~~and ~~the build~~e-~~out~~commerce ~~of its digital asset treasury platform~~capabilities.

Additionally, on June 6, 2025, the Company completed the acquisition of Fat Panda Ltd. and related entities (“Fat Panda”), entering the Canadian nicotine vape industry. 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.

Note 2 – Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting ~~principles~~ principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the ~~six~~successor ~~months~~period ~~ended~~from ~~October~~June 7, 2025 to January 31, 2026 and the predecessor period from May 1, 2025 to June 6, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending April 30, 2026.

The balance sheet information as of April 30, 2025, has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Transitional Annual Report on Form 10-KT for the four months ended April 30, 2025.

On ~~June 6, 2025 (~~the “Acquisition Date”), ~~CEA~~the ~~Industries~~Company ~~Inc.~~ completed ~~its acquisition of~~ the Fat Panda ~~Group of Companies (“Fat Panda”) (the “Fat Panda~~ Acquisition”). As described in Note 4 – Business Combination, ~~CEA~~ ~~Industries~~the ~~Inc.~~Company has been identified as the accounting acquirer (the “Successor”) and Fat Panda as the accounting predecessor (the “Predecessor”) in accordance with the acquisition method of accounting under ASC 805, Business Combinations. As a result of this designation, the financial statements reflect a change in reporting entity. Financial information for periods prior to the Acquisition Date represents the historical operations of Fat Panda and is labelled as “Predecessor.” Financial information for periods beginning on and after the Acquisition Date reflects the operations of the combined entity under the control of ~~CEA~~the ~~Industries Inc.~~Company and is labelled as “Successor” since ~~CEA~~the ~~Industries~~company ~~Inc.’s~~ operations prior to the acquisition were insignificant relative to those of Fat Panda. The merger was accounted for as a business combination using the acquisition method of accounting. The Successor financial statements reflect a new basis of accounting based on the fair value of the identifiable net assets acquired. Determining the fair value of certain assets and liabilities assumed involves significant judgment and the use of estimates and assumptions. See Business Combinations below for additional information on the fair values of assets and liabilities recorded in connection with the Fat Panda Acquisition.

As a result of applying the acquisition method of accounting as of the Acquisition Date, the accompanying condensed consolidated financial statements include a black line division to distinguish between the Predecessor and Successor reporting entities. These entities are presented on different bases and are therefore not comparable. The lack of comparability is primarily due to the impacts of the Fat Panda Acquisition, including the remeasurement of acquired assets and assumed liabilities at fair value in the Successor condensed consolidated financial statements.

AsUse ~~a result~~ of ~~applying~~Estimates ~~the acquisition method of accounting as of the Acquisition Date, the accompanying consolidated financial statements include a black line division to distinguish between the Predecessor~~ and Successor reporting entities. These entities are presented on different bases and are therefore not comparable. The lack of comparability is primarily due to the impacts of the Fat Panda Acquisition, including the remeasurement of acquired assets and assumed liabilities at fair value in the Successor consolidated financial statements.Assumptions

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements and the notes. Actual results may ultimately differ materially from those estimates.

Digital Assets

In December 2023, the FASB issued ASU 2023-08, Digital Assets, which provides guidance on the recognition, measurement, presentation, and disclosure of digital assets through the creation of ASC 350-60, – Intangibles – Goodwill and Other – Crypto Assets (“ASC 350-60”). ASU 2023-08 became effective for all entities for fiscal years beginning after December 15, 2024. The standard became effective for the Company on May 1, 2025, and no cumulative-effect adjustment was required. The Company accounts for its digital assets, including BNB tokens, in accordance with ASC 350 ~~– Intangibles – Goodwill and Other~~-60. The Company has determined its digital assets meet the scoping criteria of ASC 350-60, which requires eligible crypto assets to be measured at fair value, with changes in fair value recognized in net income. Fair value is determined in accordance with ASC 820, – Fair Value Measurement, using quoted prices in active markets. The Company has designated athe Binance exchange as its principal market ~~based~~as onit is the market that the Company has access to and has the greatest volume and level of activity of BNB for determining the fair value of BNB tokens.

The Company ~~deposits~~may deposit certain digital assets with certain third-party exchanges to facilitate ~~trading~~digital asset treasury activities. Assets that would be held on these exchanges ~~are~~ may not be maintained in segregated wallets under the Company’s exclusive control and ~~are~~could be pooled with assets of other customers. Due to the lack of sufficient regulatory oversight and the Company’s inability to prevent ~~the~~such an exchange from using ~~these~~such assets for purposes other than those directed by the Company, the Company has concluded it ~~does~~would not have complete control over the deposited assets. Accordingly, such amounts ~~are~~would be recorded as receivables from the exchange within current assets, rather than as digital assets on the condensed consolidated balance sheet, as the Company does not expect tothat it would hold these receivables for more than 12 months.

The Company holds its BNB digital assets with a non-U.S. Binance-ecosystem custodial provider and periodically receives airdrops from blockchain projects within the Binance ecosystem. Airdrops are distributed randomly without consideration or contractual agreement; therefore, they do not meet the criteria for revenue recognition under ASC 606. The Company records the fair value of airdrops upon receipt and classifies the income as non-operating, presented within ~~Other~~other ~~Income~~income in the condensed consolidated statements of operations.

The activity from remeasurement of digital assets at fair value is reflected in the condensed consolidated statements of operations within unrealized gain/loss on digital assets. Realized gains and losses from the derecognition of digital assets would be included in the realized gain/loss on digital assets in the condensed consolidated statements of operations. ~~Although~~During the period, the Company has converted digital assets (such as airdrops) into stablecoins and BNB as part of its regular operations. The Company has not disposed of ~~any~~ digital assets for fiat currency during the reporting period, in the event there are disposals in the future, the Company will use the specific identification method to calculate the realized gains/losses on digital assets.

Sales and purchases of digital assets are reflected as cash flows from investing activities in the condensed consolidated statements of cash flows. Contributions of digital assets received as part of the consideration received in a private placement (~~through~~referred to as PIPE ~~offerings~~Transaction as discussed in Note 13 – Shareholders’ Equity) are presented within supplemental information for non-cash ~~investing~~ investing and financing activities in the condensed consolidated statements of cash flows.

Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents.

Cash includes deposits held in financial institutions which are insured by the Canada Deposit Insurance Corporation (CDIC) which automatically insures eligible deposits separately up to $100,000 Canadian dollars (“CAD”) per depositor, per insured bank, for each ownership category.

As of October 31, 2025 (Successor), the Company had approximately $1,341,947 CAD in cash deposits in excess of the CDIC insurance limits at certain financial institutions.

The Company maintains deposits in U.S. financial institutions that exceed the federally insured amount of $250,000. As of October 31, 2025 (Successor), the Company had approximately $31,255,989 in cash deposits in excess of the FDIC insurance limits at one financial institution.

The Company periodically monitors the financial condition of its financial institutions and considers strategies to mitigate credit risk exposure related to uninsured balances. The Company has not experienced any losses to date on depository accounts. The Company maintains its cash accounts with high credit quality financial institutions and therefore believes that its loss exposure is minimal.

~~Fair~~As ~~value~~of ~~measurement~~January 31, 2026 (Successor), the Company had approximately $10.0 million in cash deposits in excess of the Federal Deposit Insurance Corporation insurance limits of $0.3 million at one financial institution and approximately $1.0 million or $1.3 million Canadian dollars (“CAD”) in cash deposits in excess of the Canada Deposit Insurance Corporation insurance limits of $0.1 million CAD at certain financial institutions.

Fair Value Measurement

The Company accounts for fair value measurements in accordance with ASC 820, Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company uses a three-level hierarchy to prioritize the inputs used in measuring fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or other market-corroborated inputs.

Level 3 – Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

~~All the~~The Company’s ~~BNB~~has ~~are~~designated ~~held~~the byBinance ~~BNC~~exchange ~~BNB~~as ~~Cayman,~~its aprincipal ~~wholly~~market for ~~owned~~its ~~subsidiary~~digital ~~organized~~assets ~~under~~as ~~the~~it ~~laws~~is of the ~~Cayman Islands. The Company has designated a principal~~ market ~~for~~to ~~BNB~~which ~~based~~its onwholly ~~the~~owned ~~market~~subsidiary, ~~that~~ BNC BNB Cayman, has access to and ~~has~~that provides the greatest volume and level of orderly transactions ~~for BNB~~. The Company reassesses its principal market when facts and circumstances change, including but not limited to when new markets become accessible, or the volume/activity in the current principal market declines. ~~Because~~For ~~BNB~~digital ~~trades~~assets that trade continuously across global markets, the Company applies a consistent valuation cut-off at midnight UTC on the reporting date to determine fair value. All digital assets are measured at fair value using quoted prices in their respective principal markets, which are classified as Level 1 inputs under ASC 820.

~~The~~All of the Company’s digital assets, including BNB, BTC, USDT, and USDC, are held by BNC BNB Cayman, and the principal market for each asset is determined based on the market accessible to this subsidiary. The Company has elected the Fair Value Option for its USDC holdings to align with the treatment of its other digital assets. USDC is measured at fair value on a recurring basis using quoted prices in ~~its~~the Company’s principal market ~~(Level~~on ~~1 inputs)~~the asdate of ~~the reporting date~~recognition.

The Company’s ~~has~~Stapled ~~elected~~Warrants, ~~the~~issued ~~Fair~~in ~~Value~~October ~~Option~~2025, ~~for~~are ~~its~~liability ~~USDC~~classified, ~~holdings~~and tofair ~~align~~valued ~~with~~using ~~the~~a ~~treatment~~Monte-Carlo ofoption ~~its~~model using ~~other~~Level ~~digital~~3 ~~assets~~inputs. ~~USDC~~Information isrelated ~~measured at~~to ~~fair~~the ~~value~~Stapled onWarrants ais ~~recurring~~disclosed ~~basis~~in ~~using~~Note ~~quoted~~15 ~~prices~~– ~~in the Company’~~Investor Warrants.

The Company’s ~~Stapled~~financial ~~Warrants~~assets and liabilities consist of cash, ~~issued~~accounts inreceivable, ~~October~~accounts ~~2025~~payable, ~~are~~accrued ~~liability~~expenses ~~classified~~and debt. The carrying value of cash, accounts receivable, accounts payable, and ~~fair~~accrued ~~valued~~expenses ~~using~~approximates afair ~~Monte-Carlo~~value ~~option~~due ~~model~~to the short-term ~~using~~nature ~~Level~~of 3those ~~inputs~~instruments. ~~Information~~The ~~related~~carrying tovalue ~~the~~of ~~Stapled~~debt ~~Warrants~~approximates isfair ~~disclosed~~value indue ~~Note~~to 15the –variable ~~Warrants~~rate nature of the debt.

Basic and Diluted Earnings (Loss) per Share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per Share” (“ASC 260”). Basic EPS is computed by dividing undistributed earnings attributable to common stockholders by the weighted-average number of common shares outstanding during the period. ~~Diluted~~The diluted impact from potential common stock instruments is calculated using the treasury ~~stock~~ stock method, and if-converted method as applicable, unless the effect would be anti-dilutive.

Business Combinations

For acquisitions meeting the definition of a business combination, the acquisition method of accounting is used. The consideration transferred for the acquired business is allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets. Any excess of the amount paid over the estimated fair values of the identifiable net assets acquired is allocated to goodwill. Acquisition-related costs, such as professional fees, are excluded from the consideration transferred and are expensed as incurred. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies are initially recorded in connection with a business combination as of the acquisition date.

Goodwill

Goodwill represents the excess of the purchase price for an acquisition over the fair value of the identifiable net assets acquired. Goodwill is not amortized but rather is reviewed annually for impairment, at the reporting unit level, or when there is evidence that events or changes in circumstances indicate that the Company’s carrying amount may not be recovered. When testing goodwill for impairment, the Company first performs an assessment of qualitative factors. If qualitative factors indicate that it is more likely than not that the fair value of the relevant reporting unit is less than its carrying amount, the Company tests goodwill for impairment at the reporting unit level using a two-step approach. In step one, the Company determines if the fair value of the reporting unit exceeds the unit’s carrying value. If step one indicates that the fair value of the reporting unit is less than its carrying value, the Company performs step two, determining the fair value of goodwill and, if the carrying value of goodwill exceeds its implied fair value, an impairment charge is recorded.

~~Intangible assets~~Goodwill

Goodwill represents the excess of the purchase price for an acquisition over the fair value of the identifiable net assets acquired in a business combination. Goodwill recognized in connection with the acquisition is denominated in the functional currency of the acquired entity and was translated into U.S. dollars using the exchange rate as of the acquisition date. Goodwill is subsequently translated into U.S. dollars at each reporting date using the period-end exchange rate.

Goodwill is not amortized but is tested for impairment at least annually at the reporting unit level, or more frequently if events or changes in circumstances indicate that the Company’s carrying amount may not be recovered. The Company first performs a qualitative assessment to determine whether it is more likely than not that the fair value of the relevant reporting unit is less than its carrying amount. If a quantitative assessment is required, the Company compares the estimated fair value of the reporting unit with its carrying value. If the carrying value exceeds the reporting unit’s fair value, the Company recognizes an impairment loss in an amount equal to that excess, limited to the carrying amount of goodwill.

During the quarter ended January 31, 2026, the Company evaluated events and circumstances in accordance with the qualitative assessment guidance in ASC 350-20 to determine whether it was more likely than not that the fair value of the Fat Panda reporting unit was less than its carrying amount. Based on this evaluation, management concluded that it was not more likely than not that the fair value of the reporting unit was less than its carrying amount.

Intangible Assets

The Company has recognized two intangible assets: one with an indefinite useful life and one with a finite useful life. The indefinite-lived intangible asset, a trade name, is not subject to amortization. Instead, it is evaluated for impairment on an annual basis, or more frequently if events or changes in circumstances suggest that the asset may be impaired. The impairment assessment involves estimating the fair value of the trade name using discounted future cash flows and comparing it to its carrying amount. If the carrying amount exceeds the estimated fair value, an impairment charge is recorded for the difference.

The finite-lived intangible asset, also a trade name, is recorded at historical cost less accumulated amortization. Amortization is recognized on a straight-line basis over the asset’s estimated useful life of 10 years, which is determined based on the expected economic benefit and usage of the asset. This asset is reviewed for impairment whenever indicators of potential impairment arise. The evaluation compares the carrying value to the estimated future undiscounted cash flows expected to be generated by the asset. If the carrying value exceeds those cash flows, the asset is considered impaired, and the impairment loss is measured as the excess of the carrying amount over its fair value.

~~Debt~~Based ~~Discount~~on ~~and~~the ~~Debt~~carrying ~~Issuance~~value ~~costs~~of intangible assets at January 31, 2026, estimated amortization expense for the subsequent five years is as follows: remaining one quarter of 2026—$128 thousand; 2027—$526 thousand; 2028—$527 thousand; 2029—$526 thousand; 2030—$526 thousand; and thereafter—$2.7 million.

~~Debt~~Revenue issuance costs related to notes payables liability are directly deducted from the carrying amount of the notes payables. These costs, along with debt discounts, are deferred and amortized over the term of the debt using the effective interest method.Recognition

The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers, which requires revenue to be recognized ~~recognition~~as control of promised goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled.

~~The~~Fat ~~Company~~Panda ~~accounts~~revenues ~~for~~consist ~~revenue~~primarily inof ~~accordance~~retail ~~with ASC 606~~sales, ~~Revenue~~e-commerce ~~from~~and ~~Contracts~~phone ~~with~~orders, ~~Customers.~~factory-direct Awholesale ~~performance~~sales, ~~obligation~~and isfranchise aarrangements. ~~promise~~Retail insales arepresent ~~contract to transfer~~ a ~~distinct~~single ~~good or service. Most contracts include multiple~~ performance ~~obligations,~~obligation ~~such~~satisfied asat ~~engineering and~~the ~~technical~~point ~~services~~of ~~and~~sale. ~~delivery~~Revenue ofis ~~climate~~recognized ~~control~~upon ~~system~~payment ~~equipment~~ and ~~components~~delivery, ~~which may span phases from facility design to~~ ~~equipment~~net ~~delivery~~of ~~and~~sales ~~start-up~~taxes. ~~The~~Based ~~Company~~on ~~does~~historical ~~not~~data, ~~provide~~no ~~construction~~material orliability ~~installation~~for ~~services.~~returns ~~Certain~~was ~~contracts~~recorded ~~contain~~for athe ~~single performance~~periods ~~obligation, typically engineering-only services~~presented.

Transaction prices are allocated to each performance obligation based on standalone selling price. For engineering services, standalone selling price is estimated using project characteristics such as facility size and system complexity. For equipment sales, standalone selling price is determined by expected costs plus an appropriate margin. When prices are highly variable, the Company uses a combination of methods and observable inputs. Revenue is recognized when control transfers - generally upon shipment for goods and over time for engineering services based on percentage completion toward milestones.

The Company excludes taxes assessed by governmental authorities from transaction prices and recognizes revenue net of sales taxes. Freight revenue and related costs are recorded when control of goods passes to the customer. The Company offers assurance-type warranties only and maintains a warranty reserve based on historical costs.

Retail sales represent a single performance obligation satisfied at the point of sale. Revenue is recognized upon payment and delivery, net of sales taxes. Based on historical data, no material liability for returns was recorded for the periods presented. Gift card sales are recorded as a liability at issuance and recognized upon redemption or when breakage becomes probable. Loyalty programs, such as “buy 10, get 1 free” punch cards, represent separate performance obligations; related liabilities were immaterial for all periods presented.

Revenue from e-commerce, phone orders, and factory-direct wholesale is recognized upon shipment (FOB shipping point). Shipping and handling are considered fulfilment costs. Historical return rates are minimal; no allowance for returns has been recorded.

Gift card sales are recorded as a liability at issuance and recognized upon redemption or when breakage becomes probable. Loyalty programs, such as “buy 10, get 1 free” punch cards, represent separate performance obligations; related liabilities were immaterial for all periods presented.

Franchise royalty fees are variable consideration based on a percentage of franchisee sales and are recognized in the period sales occur. Initial franchise fees are recognized upon opening of the new franchise location.

Climate control revenues are derived from contracts that may include engineering and technical services and the sale of climate control system equipment and components. These contracts may span multiple phases, from facility design to equipment delivery and start-up. The Company does not provide construction or installation services. A performance obligation is a promise in a contract to transfer a distinct good or service. Most client control contracts include multiple performance obligations, while certain contracts consist of a single performance obligation, typically engineering-only services.

The transaction price is allocated to each performance obligation based on its standalone selling price. For engineering services, standalone selling price is estimated using project characteristics such as facility size and system complexity. For equipment sales, standalone selling price is determined by expected costs plus an appropriate margin. When prices are highly variable, the Company uses a combination of methods and observable inputs. Revenue is recognized when control transfers - generally upon shipment for goods and over time for engineering services based on percentage completion toward milestones.

Concentrations

One customer accounted for 3991% of the (Successor) Company’s accounts receivable as of ~~October~~January 31, ~~2025~~2026. The (Predecessor) Company’s accounts receivable from three customers made up 57%, 33%, and 10% of the total accounts receivable balance as of April 30, 2025.

Foreign Currency Translation

The Company’s condensed consolidated financial statements are presented in U.S. dollar (“USD”). Financial statements of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for revenues and expenses. Adjustments resulting from translating net assets are reported as a separate component of accumulated other comprehensive loss within condensed consolidated statements of common shareholders’ equity as currency translation adjustment. Monetary assets and liabilities that are denominated in foreign currencies are translated at the rate prevailing at each reporting date. The U.S. dollar effects that arise from translating the net assets of these companies are recorded in other comprehensive income.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), ~~and~~ and ASC 815-40, “Contracts in Entity’s Own Equity” (“ASC 815-40”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements from equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgement, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed consolidated statements of operations.

Correction of Error – RSU Compensation

In July 2025, prior to the closing of the PIPE Transaction, the Company erroneously recognized $4.6 million of compensation expense prematurely. Accordingly, the Company reversed the previously recognized $4.6 million of compensation expense in the current period. The Company evaluated the impact in accordance with SEC Staff Accounting Bulletins (“SAB”) 99 Topic 1.M, Materiality, and SAB 108 Topic 1.N, Accounting Changes and Error Corrections and concluded that the error and subsequent correction were not material to prior or current interim condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In July 2025, the FASB issued Accounting Standards Update No. 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets~~” (“ASU 2025-05”)~~, which introduces a practical expedient (for all entities) and an accounting policy election for non-public entities when estimating expected credit losses for current receivables and contract assets under ASC 606. The standard is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years, and early adoption is permitted. The amendments are applied prospectively, and eligible entities can choose to apply the practical expedient and accounting policy election, with required disclosures. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements and disclosures.

In January 2025, the FASB issued Accounting Standards Update No. 2025-01 to clarify the effective date of ASU 2024-03 (disaggregation of income statement expenses) for non-calendar year-end entities. The clarification ensures that initial adoption is required in an annual reporting period (rather than unintentionally in an interim period) for entities with non-calendar year ends. The amendments align with the effective dates stated in ASU 2024-03 (annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027) and early adoption is permitted. The Company is currently evaluating the potential impact of ~~ASU 2024-03~~this ~~(as~~guidance ~~clarified by ASU 2025-01)~~ on its unaudited ~~condensed~~ consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances transparency by requiring additional disaggregation in the rate reconciliation and expanded disclosures of income taxes paid by jurisdiction. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, for public business entities. As the Company’s fiscal year ending April 30, 2026 begins after that date, the Company will adopt this standard in its annual Form 10-K for the fiscal year ending April 30, 2026. The Company does not expect ASU 2023-09 to affect its interim disclosures for the current fiscal year.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosure.

Note 3 - Digital Assets

The following table sets forth the units held, cost basis, and fair value of digital assets held, as shown on the condensed consolidated balance sheet as of ~~October~~January 31, ~~2025~~2026:

Digital Assets held:

Number of Tokens

Cost

Fair Value

Crypto Assets held:

Number of Tokens

Cost

Fair Value

BNB

~~511~~515,~~932~~544

~~442~~446,~~960~~454,~~096~~159

~~557~~402,~~443~~836,~~133~~035

BTC

6,451,182

64,~~001~~311,~~864~~665

USDC

41,~~067~~155,~~333~~356

USDT

~~474~~876,~~764~~832

Total

52,~~054~~547,~~084~~787

~~453~~454,~~953~~937,~~375~~529

~~567~~409,~~987~~179,~~094~~888

~~Cost~~BTC, ~~basis~~USDC, isand ~~equal~~USDT toare ~~the~~classified ~~cost~~within ofcurrent ~~the~~ digital ~~asset~~assets, ~~net~~as ofthey ~~any~~are ~~transaction~~held ~~fees,~~primarily iffor ~~any,~~operating atliquidity ~~the~~and ~~time~~are ofexpected ~~purchase~~to ~~or upon receipt.~~be ~~Digital~~available ~~assets~~for ~~are~~use ~~measured~~within atthe ~~fair~~next ~~value~~twelve onmonths. aAs ~~recurring~~of ~~basis~~January ~~in accordance with ASC 820~~31, ~~Fair Value Measurement~~2026, ~~using~~the aCompany ~~quoted prices~~has inno ~~active~~digital ~~markets~~assets ~~(Level~~held 1with ~~inputs).~~third ~~Fair~~party ~~value~~exchanges, ~~represents~~accordingly, ~~the~~has ~~quoted~~no ~~prices on a principal market at midnight UTC on the~~digital ~~measurement~~assets ~~date~~receivable.

AsCost basis ofis ~~October~~equal ~~31,~~to ~~2025,~~ the ~~Company~~cost ~~holds~~of ~~502,441~~the ~~BNB~~digital ~~tokens with~~asset, anet ~~fair value~~ of ~~$547,108,026~~any astransaction ~~digital assets. An additional 9~~fees,~~491~~ ~~BNB~~if ~~tokens~~any, ~~valued~~ at ~~$10,335,107, are held with third-party exchanges where~~ the ~~Company~~time ~~does~~of ~~not~~purchase ~~control~~or ~~the~~upon ~~private keys~~receipt. ~~Accordingly, BNB tokens held with third-party exchanges are presented as digital asset receivable, together with BTC, USDC and USDT, as of October 31, 2025.~~

~~Digital asset receivables are not interest-bearing and are generally due on demand. The Company’s digital asset receivables are with only one counterparty.~~11

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

Schedule of Digital Asset Holdings

Fair Value on – May 1, 2025	Balance
	Balance
Additions	$	448,125,798
Balance as of June 7, 2025	$	-
Airdrop income		5,827,578
Fair value of digital assets held, beginning	$	-
Unrealized gain on BNB		114,483,038
Purchases		448,448,603
Unrealized loss on BTC		(449,320	)
Airdrop income		7,093,030
Ending balance – October 31, 2025	$	567,987,094
Commission expense		(604,155	)
Fair Value	$	567,987,094
Unrealized loss on BNB		(43,618,088	)
Unrealized loss on BTC		(2,139,502	)
Balance as of January 31, 2026	$	409,179,888
Fair value of digital assets held, ending	$	409,179,888

Note 4 - Business Combinations

On ~~June 6, 2025 (~~the “Acquisition Date”), the Company acquired ~~the~~ Fat Panda ~~Group of Companies~~, Central Canada’s leading retailer and manufacturer of vaping products, holding a significant market share across Manitoba, Ontario, and Saskatchewan. With 33 retail locations and a thriving e-commerce platform, ~~the~~Fat Panda ~~company~~ offers a wide range of high-quality vape devices and e- liquids, including its own premium in-house line.

The purchase price was $12.3 7 million comprised of ~~approximately~~ $10.6 7 million in cash to the sellers, 39,000 shares of the Company’s common stock with an agreed value of $0.3 million, an indemnity note totaling $0.4 million and seller notes ~~totalling~~totaling $1.4 million. A portion of the purchase price was funded by a short-term loan from a United States based lender in the amount of $4.0 million, which was due in ~~six~~nine months (the “FP Loan”). In addition, $1.9 million ~~has~~was ~~been~~ placed in escrow to support post-closing adjustments, indemnity obligations, and employee-related matters. On December 4, 2025, the Company repaid the outstanding balance of the FP Loan in full.

The purchase price has been allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based upon their preliminary estimated fair values as of the Acquisition Date. The excess of the purchase price over the tangible and intangible assets acquired and liabilities assumed has been recorded as goodwill. The goodwill is primarily attributable to the assembled workforce, synergies expected from combining operations, and future growth opportunities.

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date and is based on the best estimate of management, which is subject to change within the measurement period.

	As Initially Reported			Adjustment Increase (Decrease)			Revised Amount
	As Initially Reported			Adjustment Increase (Decrease)			Revised Amount
Cash and cash equivalents	$	1,924,558		$	-		$	1,924,558
Accounts receivable		176,720			(48,829	)		127,891
Related party receivables		674,296			-			674,296
Inventory		3,690,227			(20,316	)		3,669,911
Prepaid expenses		113,371			(33,064	)		80,307
Fixed assets		314,515			-			314,515
Right-of-use asset		1,854,018			(21,933	)		1,~~854~~832,~~018~~085
Deposits		219,330			-			219,330
Intangibles – Trade name		5,236,869						5,236,869
Intangibles – trade name		5,236,869			-			5,236,869
Goodwill		4,206,487			(7654,~~442~~509	)		4,~~130~~151,~~045~~978
Accounts payable and accrued liability		(2,311,420	)		46,526			(2,264,894	)
Income taxes payable		(108,030	)		-			(108,030	)
Deferred tax liability		(1,257,613	)		-			(1,257,613	)
Lease liabilities - short-term		(533,659	)		-			(533,659	)
Current portion of royalty liabilities		(12,970	)		12,970			-
Lease liabilities - long-term		(1,334,281	)		-			(1,334,281	)
Total net assets acquired	$	12,852,418		$	(119,155	)	$	12,733,263

11During the period from June 7, 2025 to January 31, 2026, the Company recorded measurement period adjustments resulting from new information about facts and circumstances that existed as of the Acquisition Date. These adjustments primarily related to updated valuations of working capital accounts, including accounts receivable. inventory, prepaid expenses, right-of-use asset, and accrued liabilities, as well as the fair value of the notes issued to the seller as part of the purchase consideration. In accordance with ASC 805, the Company retrospectively adjusted the provisional amounts recognized at the Acquisition Date to reflect these new measurements. The adjustments resulted in changes to certain current assets and liabilities and the fair value of notes issued as consideration. The cumulative impact of these adjustments was recorded as a decrease to goodwill, and prior-period comparative information has been revised as if the adjustments had been recognized at the Acquisition Date.

During the three and nine months ended October 31, 2025, the Company recorded measurement period adjustments resulting from new information about facts and circumstances that existed as of the Acquisition Date. These adjustments primarily related to updated valuations of working capital accounts, including accounts receivable. inventory, prepaid expenses, and accrued liabilities, as well as the fair value of the notes issued to the seller as part of the purchase consideration. In accordance with ASC 805, the Company retrospectively adjusted the provisional amounts recognized at the Acquisition Date to reflect these new measurements. The adjustments resulted in changes to certain current assets and liabilities and the fair value of notes issued as consideration. The cumulative impact of these adjustments was recorded as a decrease to goodwill, and prior-period comparative information has been revised as if the adjustments had been recognized at the Acquisition Date.12

As part of the purchase price allocation, the Company determined the identifiable intangible assets were a trade name. The fair value of the intangible assets was estimated using variations of the income approach. Specifically, the relief from royalty method was utilized to estimate the fair value of the trade name. The valuation of intangible assets incorporates significant unobservable inputs (Level 3 inputs) and requires significant judgment and estimates, including the amount and timing of future cash flows and discount rates. The cash flows were based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.

Due to the timing of the completion of the acquisition, the purchase price and related allocations are preliminary and could be revised as a result of adjustments made to the purchase price and additional information obtained regarding assets acquired and liabilities assumed. Such adjustments may include, but are not limited to, changes in the estimated fair values of identifiable intangible assets, assumed liabilities, and deferred taxes. The purchase price allocation will be finalized ~~within~~during the measurement period, ofwhich may extend up to one year from the acquisition date.

The ~~following~~Company’s ~~table~~buyer ~~summarizes~~transaction costs to acquire Fat Panda totaled approximately $1.0 million and are included within transaction costs in the ~~acquired~~condensed ~~identifiable~~consolidated ~~intangible~~statements ~~assets,~~of ~~acquisition~~operations ~~date~~for ~~estimated~~the ~~fair~~period ~~value~~from ~~and~~June ~~estimated~~7, ~~useful~~2025, ~~lives:~~through January 31, 2026 (Successor).

The ~~Company’s~~following ~~buyer~~unaudited ~~transaction~~pro ~~costs~~forma toconsolidated ~~acquire~~financial ~~the~~information ~~Fat~~reflects ~~Panda~~the ~~Group~~results of ~~Companies~~operations ~~totalled~~of ~~approximately $1,000,000 and are included within transaction costs in~~ the ~~condensed~~Company ~~consolidated statements of operations~~ for the ~~period~~nine ~~from~~months ended ~~June~~January 731, ~~2025~~2026, ~~through~~and ~~October 31,~~ 2025, ~~(Successor).~~as ~~Payments~~if ~~for buyer transaction costs were made on behalf of~~ the ~~Company~~Fat byPanda ~~the~~Acquisition ~~Company’s controlling stockholder~~ and ~~have~~related ~~been~~financing ~~included~~had asoccurred ~~contributed~~on ~~capital~~May in1, ~~the condensed consolidated statements of stockholders’ equity~~2024.

~~The~~This ~~following~~information ~~unaudited~~gives ~~pro~~effect ~~forma~~to ~~consolidated~~certain ~~financial~~purchase ~~information~~accounting ~~reflects~~and ~~the~~financing ~~results~~adjustments ofand ~~operations~~is based on the historical financial statements of the Company. ~~for~~It ~~the~~is ~~six~~presented ~~months ended~~for ~~October~~illustrative ~~31,~~purposes ~~2025,~~only and ~~2024,~~is asnot ifnecessarily indicative of the Company’s actual operating results had the Fat Panda Acquisition and related financing ~~had~~ occurred on May 1, 2024, nor is it indicative of future results.

This information gives effect to certain purchase accounting and financing adjustments and is based on the historical financial statements of CEA Industries Inc. It is presented for illustrative purposes only and is not necessarily indicative of the Company’s actual operating results had the Fat Panda Acquisition and related financing occurred on May 1, 2024, nor is it indicative of future results.

	Proforma		Proforma
	For the six month ended October 31, 2025		For the six months ended October 31, 2024
	For the nine months ended January 31, 2026		For the nine months ended January 31, 2025
Revenue	$	1724,~~268~~602,~~150~~776	$	1624,~~635~~011,~~529~~169
Net Income/(loss)	$	285,495	$	(2,189,859	)
Net income/(loss)	$	208,814	$	(2,693,757	)

	Proforma			Proforma
	For the three months ended October 31, 2025			For the three months ended October 31, 2024
	For the three months ended January 31, 2026			For the three months ended January 31, 2025
Revenue	$	67,~~741~~334,~~480~~626		$	7,~~916~~375,~~559~~640
Net Income/(loss)	$	1,736,967		$	(2,311,958	)
Net income/(loss)	$	(76,681	)	$	(503,901	)

12Pro forma financial information is presented as if the operations of Fat Panda had been included in the consolidated results of the Company since May 1, 2024, and reflects transactions that are directly attributable to the Fat Panda Acquisition and related financing. Pro forma adjustments to the nine months ended January 31, 2026 and 2025 include adjustments for amortization of preliminary marketing-related intangible assets, elimination of non-recurring transaction costs incurred related to the acquisition, debt discount amortization and interest expense on the $4.0 million bridge loan, and debt discount amortization and interest expense on the promissory notes issued to the sellers of Fat Panda.

Pro forma financial information is presented as if the operations of Fat Panda had been included in the consolidated results of the Company since May 1, 2024, and reflects transactions that are directly attributable to the Fat Panda Acquisition and related financing. Pro forma adjustments to the six months ended October 31, 2025 and 2024 include adjustments for amortization of preliminary marketing-related intangible assets, elimination of non-recurring transaction costs incurred related to the acquisition, debt discount amortization and interest expense on the $4,000,000 bridge loan, and debt discount amortization and interest expense on the promissory notes issued to the sellers of Fat Panda.

Note 5 – Leases

The Company recorded operating lease costs for the period from June 7, 2025, through January 31, 2026 (Successor) of $0.4 million. For the period from May 1, 2025, through June 6, 2025 (Predecessor) operating lease costs was $91.8 thousand and for the nine months ended January 31, 2025 (Predecessor), operating lease costs was $0.4 million.

The Company’s operating and finance right-of-use assets and lease liabilities are as follows:

Schedule of Lease Cost

	Successor		Predecessor
	October 31,		April 30,
	January 31,		April 30,
	2025		2025
	2026		2025
Operating lease right-of-use asset	$	1,~~821~~886,~~417~~600	$	1,890,013
Operating lease liability, current	$	~~671~~709,~~520~~245	$	528,914
Operating lease liability, long-term	$	1,~~187~~236,~~373~~830	$	1,374,639

Successor

Predecessor

Period from June 7 through October 31, 2025

Period from May 1 through June 6, 2025

Six Months Ended October 31, 2024

Period from June 7 through January 31, 2026

Period from May 1 through June 6, 2025

Nine Months Ended January 31,2025

Cash paid for operating lease

~~260~~421,~~496~~172

91,749

~~333~~433,~~881~~492

Future annual minimum lease payments under non-cancellable operating leases as of ~~October~~January 31, ~~2025~~2026, were as follows:

As of October 31, 2025	Successor
	Successor
	October 31,
	January 31,
Years ended April 30,	2025
Years ending April 30,	2026
2026 (excluding the six months ended October 31, 2025)	$	395,700
2026 (excluding the nine months ended January 31, 2026)	$	208,973
2027		~~710~~752,~~746~~582
2028		~~486~~502,~~199~~664
2029		~~306~~318,~~056~~414
2030		~~165~~185,~~044~~903
Thereafter		~~200~~216,~~314~~417
Total minimum lease payments		2,~~264~~184,~~059~~953
Less imputed interest		(~~453~~238,~~407~~878	)
Present value of minimum lease payments	$	1,~~810~~946,~~652~~075

Other information related to leases were as follows:

	Successor			Predecessor
	October 31,			April 30,
	January 31,			April 30,
	2025			2024
	2026			2025
Weighted-average remaining lease term (in years)		32.7632			4.13
Weighted-average discount rate		64.19	%		6.3	%

Note 6 – Inventory

Inventory consisted of the following:

Schedule of Inventory

	Successor			Predecessor
	October 31,			April 30,
	January 31,			April 30,
	2025			2025
	2026			2025
	(Unaudited)			(Audited)
Finished goods	$	3,~~296~~772,~~614~~546		$	3,241,365
Raw materials		~~300~~398,~~731~~952			264,027
Allowance for excess & obsolete inventory		(~~108~~306,~~988~~524	)		(211,445	)
Inventory, net	$	3,~~488~~864,~~357~~974		$	3,293,947

Labor and overhead expenses of $~~541,672~~ 0.6 million and $~~617,982~~0.6 million were included in the inventory balance as of ~~October~~January 31, ~~2025~~2026 (Successor), and April 30, 2025 (Predecessor), respectively.

Advance payments on inventory purchases are recorded in prepaid expenses until title for such inventory passes to the Company. Prepaid ~~expenses~~ expenses included $0.5 ~~approximately~~million ~~$525,032~~ and $0 in advance payments for inventory as of ~~October~~January 31, ~~2025~~2026 (Successor), and April 30, 2025 (Predecessor), respectively.

Note 7 – Property and Equipment

Property and ~~equipment~~Equipment consisted of the following:

Schedule of Property and Equipment

	Successor			Predecessor
	October 31,			April 30,
	January 31,			April 30,
	2025			2024
	2026			2025
	(Unaudited)			(Audited)
Vehicles	$	~~152~~156,~~444~~391		$	139,524
Leasehold improvements		~~305~~319,~~694~~159			310,320
Computer equipment		9271,~~957~~625			70,679
Machinery and equipment		40,574			-
Furniture and fixtures		~~194~~213,~~998~~701			194,895
Signs		~~214~~232,~~543~~515			214,464
Computer software		~~144~~151,~~964~~410			141,024
Property and equipment at cost		1,~~146~~185,~~174~~375			1,070,906
Accumulated depreciation		(~~874~~915,~~002~~242	)		(748,026	)
Property and equipment, net	$	~~272~~270,~~172~~133		$	322,880

Depreciation expense for the period from June 7, 2025, through ~~October~~January 31, ~~2025~~2026 (Successor) was $~~257,168~~160.5 thousand. For the period from May 1, 2025, through June 6, 2025 (Predecessor) depreciation expense was $6~~,746~~.7 thousand and for the ~~six~~nine months ended ~~October~~January 31, ~~2024~~2025 (Predecessor), depreciation expense was $~~50,307~~ 82.7 thousand.

Note 8 – Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:

	Successor		Predecessor
	October 31,		April 30,
	January 31,		April 30,
	2025		2025
	2026		2025
	(Unaudited)		(Audited)
Accounts payable	$	14,~~256~~941,~~625~~163	$	740,096
Accrued payroll liabilities		~~623~~615,~~163~~682		1,449,200
Product warranty accrual		49,124		-
Sales tax payable		227,483		66,149
Sales tax payable		203,309		66,149
Other accrued expenses		499,052		-
Other accrued expenses		3,372,834		-
Total	$	6,283,380	$	2,255,445
Total	$	5,505,055	$	2,255,445

1415

Note 9- Revenue

The following table sets forth the Company’s revenue by source:

Schedule of Revenue by Source

	Successor		Predecessor		Successor		Predecessor		Predecessor
	Three Months Ended October 31,		Three Months Ended October 31,		Period from June 7 through October 31,		Period from May 1 through June 6,		Six Months Ended October 31,
	Three Months Ended January 31, 2026		Three Months Ended January 31, 2025		Period from June 7, 2025 through January 31, 2026		Period from May 1 through June 6, 2025		Nine Months Ended January 31, 2025
	2025		2024		2025		2025		2024
CEA equipment and systems sales	$	612,894	$	-	$	913,464	$	-	$	-
CEA equipment and systems sales	$	193,743	$	-	$	300,570	$	-	$	-
CEA engineering and other services		-		-		87,993		-		-
CEA engineering and other services		38,846		-		87,993		-		-
CEA other sales		63,088		-		85,912		-		-
CEA other sales		21,839		-		22,827		-		-
Retail Vape sales		6,349,605		6,146,808		17,177,653		2,761,077		18,947,052
Retail Vape sales		6,240,755		-		10,827,892		2,761,077		12,800,544
E-commerce Vape sales		228,151		719,091		506,220		165,818		1,989,873
E-commerce Vape sales		443,887		6,698,217		278,070		165,818		1,267,923
Factory direct wholesale Vape sales		62,230		42,918		265,852		794		255,408
Factory direct wholesale Vape sales		204,415		532,236		203,621		794		214,064
Franchise fee Vape sales		-		-		-		-		121,338
Franchise fee Vape sales		-		206,298		-		-		122,887
Other Vape sales		18,658		-		18,658		-		-
Other Vape sales		-		-		-		-		-
Total revenue	$	7,334,626	$	6,908,817	$	19,055,752	$	2,927,689	$	21,313,671
Total revenue	$	7,143,485	$	7,436,751	$	11,720,973	$	2,927,689	$	14,405,418

As of ~~October~~January 31, ~~2025~~2026 (Successor), ~~and~~the ~~April~~Company’s 30remaining performance obligations, ~~2025~~or ~~(Predecessor)~~backlog, ~~the~~was ~~allowance~~approximately ~~for~~$0.6 million ~~doubtful~~are ~~accounts~~expected ~~was~~to ~~$92~~be recognized within one year. The Company expects to recognize this revenue as the related services are performed. However,~~942~~ ~~(successor)~~the timing of the recognition is subject to uncertainty due to the nature of the underlying contracts, and $there 0is ~~(predecessor),~~no ~~respectively~~assurance that all remaining performance obligations will result in revenues.

As of October 31, 2025 (Successor), the Company’s remaining performance obligations, or backlog, was approximately $902,000, an increase of $176,000 from the June 6, 2025 (Successor) backlog of $726,000. The increase was primarily the result of large booking from one customer during for the period. 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.

The remaining performance obligations expected to be recognized through fiscal year 2026 are as follows (Successor):

Schedule of Remaining Performance Obligations Expected to be Recognized

	Q3FY26
Remaining performance obligations related to partial equipment & engineering paid contracts	$	901,786
Total remaining performance obligations	$	901,786

Geographic Information

The Company classifies sales by customers’ locations in two geographic regions: the United States and Canada.

	Three Months Ended October 31,		Three Months Ended October 31,		Period from June 7 through October 31,		Period from May 1 through June 6,		Six Months Ended October 31,
	Successor		Predecessor		Successor		Predecessor		Predecessor
	2025		2024		2025		2025		2024
	Three Months Ended January 31,2026		Three Months Ended January 31, 2025		Period from June 7 through January 31, 2026		Period from May 1 through June 6,2025		Nine Months Ended January 31,2025
United States	$	~~254~~675,~~428~~981	$	-	$	~~411~~1,~~389~~087,371	$	-	$	-
Canada		6,~~889~~658,~~057~~645		76,~~436~~908,~~751~~817		1117,~~309~~968,~~584~~381		2,927,689		1421,~~405~~313,~~418~~671
Total	$	7,~~143~~334,~~485~~626	$	76,~~436~~908,~~751~~817	$	1119,~~720~~055,~~973~~752	$	2,927,689	$	1421,~~405~~313,~~418~~671

Note 10 – Note Payable

In connection with the Company’s acquisition of Fat Panda ~~Inc. on June 6~~, ~~2025, effective June 4, 2025,~~ the Company entered into an interim loan facility with CEAD Panda Lender LLC, under which it borrowed $4~~,000,000~~.0 ~~The~~million ~~loan~~effective ~~due~~June ~~date is December 3~~4, 2025~~, subject to the right of the Company to prepay any amount of the borrowed funds together with outstanding unpaid interest and a prepayment penalty~~. The loan isrequired interest -only, payments until ~~the~~ maturity ~~date~~, payable monthly., with ~~The~~an interest rate isof 3% for the first three months and ~~then~~ 2% per month thereafter ofon the outstanding ~~loan amount~~principal. The loan iswas secured by a first lien on all the assets of the Company, 16728502 CANADA INC and Fat Panda Ltd., now amalgamated as Fat Panda Ltd., subject to certain exceptions and permitted liens and permitted dispositions. The vendor notes of the Fat Panda sellers are subordinate to the security interests granted under the security agreements related to the loan facility. The loan facility has typical representations and warranties of the borrower, default provisions, and various covenants, including the covenant to maintain at least $1,500,000 in cash and have a minimum of $4,000,000 in working capital (inclusive of any cash).

~~Prepaid~~The ~~interest~~loan facility included customary borrower representations and ~~legal~~warranties, ~~fees~~event ~~totalling~~of ~~$449~~default,~~718~~ ~~were~~and ~~incurred~~various incovenants, ~~respect~~including ofrequirements to ~~this~~maintain ~~promissory~~at ~~note~~least $1.5 million on cash and ~~have~~a ~~been~~minimum ~~accounted~~of ~~for~~$4.0 asmillion ~~debt~~in ~~discount costs~~working ~~and~~capital ~~are~~(inclusive ~~being~~of ~~amortized~~cash). ~~over~~On December 4, 2025, the ~~life~~Company repaid the outstanding balance of the ~~promissory~~FP ~~note,~~Loan ~~prepaid~~in ~~interest~~full. asInterest ~~incurred~~expense ~~and~~recognized ~~legal~~for ~~fees~~the onperiod aincludes ~~straight-line~~amounts ~~basis~~related ~~which~~to ~~equates~~this tointerim ~~the~~loan ~~effective~~facility ~~interest~~prior ~~rate~~to ~~method~~repayment.

During the period August 1, 2025 – October 31, 2025, interest of $286,667 was incurred and debt discount of $ 44,859 was amortized in respect of the promissory note during the period.

Schedule of Promissory Note

	Successor			Predecessor
	October 31,			April 31,
	2025			2025
	(Unaudited)			(Audited)
Promissory Note	$	4,000,000		$	-
Less: debt discount		(26,280	)		-
Promissory Note, net of discount	$	3,973,720		$	-

Note 11 – Related Party Note Payable and Related Party Convertible Note Payable

In connection with the ~~Company’s acquisition of~~ Fat Panda ~~Inc.~~Acquisition on ~~June~~the 6,Acquisition ~~2025~~Date, the Company issued three notes payable to selling shareholders, one of whom is ~~now~~the anPresident of Fat Panda, a current employee of the Company.

The first note payable was issued in the principal amount of $~~360,850~~0.4 million ($~~500,000~~0.5 million CAD) to certain selling shareholders of Fat Panda Inc. The note is interest free and repayable in full within 15 days following the date that Canada Revenue Agency issues a letter confirming ~~that~~ that there is no tax liability in respect of an issue identified in the Purchase Agreement for acquisition of the Fat Panda group of companies. If the letter from Canada Revenue Agency indicates that there is a tax liability in respect of an issue identified in the Purchase Agreement, the amount of the loan repayment will be reduced, dollar for dollar, by the amount of any tax liability assessed.

The second note payable was issued as a promissory note in the principal amount of $743,351 ($1,030,000 CAD) to the President of Fat Panda, a former owner and current employee of the Company. The note bears interest at 7% per annum, with interest payable monthly. The note has a maturity date of November 30, 2026.

During the period August 1, 2025 – October 31, 2025, interest of $18,024 and amortization of debt discount $ 29,349 were incurred and expensed in the condensed consolidated statement of operations.

The table below represents the outstanding amount of promissory note:

Schedule of Promissory Note Related Party

	Successor			Predecessor
	October 31,			April 30,
	2025			2025
	(Unaudited)			(Audited)
Promissory Note	$	735,214		$	-
Less: debt discount		(78,119	)		-
Promissory Note, net of discount	$	657,095		$	-

The ~~third~~second note payable, ~~also~~was issued toas ~~the President of Fat Panda, is~~ a ~~convertible~~ promissory note ~~with~~in athe principal amount of $~~743,351~~0.7 million ($1~~,030,000 CAD)~~.0 ~~The~~million ~~note~~CAD) ~~bears~~to ~~interest~~the atPresident 7%of ~~per annum and is convertible~~Fat Panda, ata ~~the~~former ~~Lenders~~owner ~~option,~~and incurrent ~~shares~~employee of the Company’s. ~~common~~The ~~stock at~~note abears ~~conversion~~interest ~~price~~at of7% ~~$19~~ per ~~share.~~annum, Ifwith nointerest ~~conversion~~payable ~~notice~~monthly. isThe note ~~submitted~~has toa ~~the~~maturity ~~Company by the Lender before the due~~ date of ~~his intent~~November ~~to convert the principal amount~~30, ~~the~~2026. ~~entire~~Interest ~~principal~~expense ~~plus~~recognized ~~interest~~for ~~shall~~the ~~become~~period ~~due~~includes onamounts ~~June~~related 1,to ~~2027~~this promissory note.

~~During~~The third note payable, also issued to the ~~period~~President ~~August~~of 1Fat Panda, ~~2025~~is –a ~~October~~convertible ~~31,~~promissory ~~2025~~note with a principal amount of $0.7 million (~~Successor~~$1.0 million CAD),. The note bears interest at 7% per annum and is convertible, at the Lenders option, in shares of the Company’s common stock at a conversion price of $~~18,024~~19.00 per share. If no conversion notice is submitted to the Company by the Lender before the ~~and~~due ~~amortization~~date of ~~debt~~his ~~discount~~intent $to convert the principal amount, the entire principal plus interest shall become due on June 1,~~872~~ ~~were~~2027. ~~incurred~~Interest expense recognized for the period includes amounts related to this convertible promissory note.

The table below represents the outstanding amount of promissory note and convertible promissory note as of January 31, 2026:

Schedule of Promissory Note and Convertible Promissory Note~~-Related Party~~

	Successor			Predecessor
	Related Party Note			Related Party Promissory Note			Related Party Convertible Promissory Note
	October 31,			April 30,
Principal	$	367,150		$	756,329		$	756,329
	2025			2025
Less: discount		-			(61,645	)		(6,307	)
	(Unaudited)			(Audited)
Carrying value	$	367,150		$	694,684		$	750,022
Convertible Promissory Note	$	735,214		$	-
Less: debt discount		(7,292	)		-
Convertible Promissory Note, net of discount	$	727,922		$	-

Note 12 – Commitments and Contingencies

Litigation

~~On October 20, 2023, Sweet Cut Grow,~~From ~~LLC~~time ~~and~~to ~~Green Ice~~time, ~~LLC~~in ~~(collectively,~~the ~~“Claimant”)~~normal acourse ~~client~~ of business, the Company ~~with~~is ~~which~~subject itto ~~had~~claims ~~an equipment contract~~ and ~~engineering~~ ~~contract,~~legal ~~filed~~proceedings. aLigation ~~demand~~is ~~for~~inherently ~~arbitration asserting claims for breach of contract~~unpredictable, ~~breach of warranty, and unjust~~ ~~enrichment,~~ and athe ~~demand for $1,049,280 in damages, plus interest (“Claims”). The~~ Company’s ~~denies~~assessments ~~all~~may ~~the~~change ~~Claims~~as ~~and~~matters ~~has asserted a counterclaim~~progress. The Company ~~believes~~expenses ~~Claimant~~legal isfees ~~owed nothing~~ as ~~the~~incurred ~~Company~~and ~~fulfilled~~records ~~all~~a ~~its obligations under the~~liability ~~contracts~~for tocontingent ~~Claimant,~~losses ~~and~~when ~~further,~~it ~~that the negligence of a third-party supplier~~ is ~~the~~both ~~basis~~probable ~~of the Claims. We are defending the Claims on the basis~~ that wea ~~promptly~~loss ~~addressed~~has ~~all~~been ~~problems,~~incurred and ~~that any issues with defective HVAC equipment are~~ the ~~responsibility~~ ofamount ~~the~~can ~~third-party~~be ~~equipment~~reasonable ~~manufacturer~~estimated. ~~The~~An ~~Company’s equipment contract with Claimant requires the parties~~unfavorable outcome to ~~arbitrate~~any ~~their disputes under the rules of the American Arbitration Association (“AAA”). The arbitration will be heard in Denver~~matter, ~~Colorado,~~if ~~with a conditional setting of January 19-22~~material, ~~2026.~~could ~~The~~adversely ~~matter~~affect ~~is in~~ the ~~discovery phase. The parties will pay their own legal fees and expenses. The~~ Company’s ~~intends~~financial ~~to defend itself vigorously~~condition, ~~believing~~liquidity ~~there~~or ~~are~~results noof ~~merits to the Claims as currently presented~~operations.

~~Given the current uncertainty around estimating the likelihood~~Abraham ofGomez ~~success of claims and potential damages, we have not recorded an accrual for any potential loss related to these matters.~~Matter

On orFebruary ~~about April 17~~24, ~~2024~~2026, ~~Optima~~Abraham ~~Consulting Services~~Gomez, ~~LLC~~an ~~(the “Claimant”)~~individual, filed a ~~client~~civil ofcomplaint in the ~~Company~~Superior ~~with~~Court ~~which~~of itthe ~~had~~State anof ~~equipment contract~~California, ~~and~~County ~~engineering contract~~of Tulare, ~~advised~~captioned ~~the~~Abraham ~~Company~~Gomez ofv. aCEA ~~potential~~Industries, ~~claim~~Inc., ~~related~~et toal., ~~work~~(Case ~~performed~~No. byVCU331863), against the Company ~~for~~and ~~Claimant~~Hans ~~and demanded~~Thomas, ~~mediation~~a ~~under~~director of the ~~parties’ contract~~Company. OnThe orcomplaint ~~about~~asserts ~~October~~various ~~28,~~claims ~~2024,~~against ~~Claimant informed~~ the ~~Company~~defendants, itincluding ~~was asserting~~ claims for ~~negligent/defective~~fraud, ~~design~~promissory ~~and~~estoppel, ~~breach~~quantum meruit ofand ~~warranty~~unjust enrichment, ~~and~~arising ~~alleges~~from ~~its~~alleged ~~damages~~investment-related ~~exceeded~~discussions ~~$2,000,000~~and ~~(Claims”).~~alleged ~~The~~services ~~Company~~purportedly ~~denied all~~performed for the benefit ~~Claims~~of ~~and~~the ~~that~~Company. ~~Claimant~~The ~~was~~plaintiff ~~entitled~~seeks todamages, ~~any~~including compensatory damages. ~~The~~according ~~Company~~to ~~believed~~proof (which the ~~Claimant~~complaint ~~was~~alleges ~~owed~~exceed approximately ~~nothing~~$2.75 asmillion), ~~the~~together ~~Company~~with ~~fulfilled all~~interest, ~~its~~attorneys’ ~~obligations~~fees, ~~under~~costs ~~the~~and ~~contracts~~other torelief. ~~Claimant~~As ~~and~~of ~~performed~~March ~~all~~13, ~~work~~2026, inthe ~~line~~Company ~~with~~has ~~all~~not yet ~~applicable~~filed ~~standards.~~its Weresponse ~~believed~~to ~~all~~the ~~work was~~complaint ~~performed~~but ~~pursuant~~intends to defend the ~~contract~~action ~~and~~vigorously. ~~any~~At ~~alleged~~this ~~issues~~preliminary ~~that~~stage ~~may~~of ~~have~~the ~~occurred~~matter, ~~were~~ the ~~result~~Company ofcannot ~~actions~~reasonably byestimate ~~Claimant~~the ~~and/~~possible loss or ~~third parties.~~range ~~The~~of ~~case~~loss, ~~was~~if ~~mediated~~any, ~~with~~that ~~the~~may ~~American~~result ~~Arbitration~~from ~~Association~~the ~~(“AAA”)~~proceeding.

~~Effective May 9, 2025, the Company entered into a settlement agreement whereby all Claims by~~ Optima ~~Consulting Services, LLC against the Company~~ ~~were settled in full upon the payment of $250,000 by the Company to Optima~~ Consulting Services, LLC. ~~This settlement payment was funded by the Company’s insurance coverage, except for $35,000 in deductibles which we paid by the Company itself.~~Matter

~~From~~On ~~time~~or toabout ~~time~~April 17, in2024, ~~the~~Optima ~~normal~~Consulting ~~course~~Services, ofLLC ~~its~~(the ~~operations~~“Claimant”), a client of the Company isunder ~~subject~~an toequipment ~~litigation~~and engineering ~~matters~~contract, ~~and~~notified ~~claims.~~the ~~Litigation~~Company ~~can~~of bea ~~expensive~~ potential claim and ~~disruptive~~demanded tomediation. ~~normal~~On ~~business~~or ~~operations.~~about ~~Moreover~~October 28, ~~the~~2024, ~~results~~Claimant ofasserted claims ~~complex~~for ~~legal~~negligent/defective ~~proceedings~~design ~~are~~and ~~difficult~~breach toof ~~predict~~warranty, ~~and~~alleging ~~the~~damages ~~Company’s view~~exceeding of$2.0 ~~these~~million. ~~matters~~The ~~may~~Company ~~change~~denied in the ~~future~~claims, believing asit ~~the~~satisfied ~~litigation~~all contractual obligations and ~~events~~that ~~related~~any ~~thereto~~issues ~~unfold.~~were ~~The~~attributable ~~Company~~to ~~expenses~~Claimant ~~legal~~and/or ~~fees~~third ~~as incurred~~parties. The ~~Company~~matter was ~~records~~mediated aunder ~~liability~~the ~~for~~AAA ~~contingent~~process. ~~losses~~Effective ~~when~~May it9, is2025, ~~both~~the ~~probable~~parties ~~that~~entered into a ~~liability~~settlement ~~has~~agreement ~~been~~under ~~incurred,~~which ~~and~~all ~~the~~claims ~~amount~~were ofresolved ~~the~~for ~~loss~~a ispayment ~~known~~of $0.3 Anmillion ~~unfavourable~~by ~~outcome~~the toCompany. ~~any~~This ~~legal~~settlement ~~matter,~~payment ifwas ~~material,~~funded ~~could~~by ~~have an adverse effect on~~ the Company’s ~~operations~~insurance coverage, orexcept ~~its~~for ~~financial~~$35 ~~position~~thousand representing the deductibles, ~~liquidity~~which orwas ~~results~~paid ofby ~~operations~~the Company.

Sweet Cut Grow, LLC and Green Ice, LLC Matter

On October 20, 2023, Sweet Cut Grow, LLC and Green Ice, LLC (collectively, “Claimant”), clients of the Company under an equipment contract and engineering contract, filed a demand for arbitration asserting claims for breach of contract, breach of warranty, and unjust enrichment, and seeking $1.0 million in damages, plus interest. The Company denies the claims and has asserted a counterclaim. The Company believes it fulfilled all its contractual obligations and that any alleged issues related to the negligence of a third-party supplier.

The parties are required to arbitrate under the rules of the American Arbitration Association (“AAA”). The arbitration is expected to be heard in Denver, Colorado, in 2026 unless resolved earlier. The matter is currently in the discovery phase, and the parties are engaged in active settlement discussions. Legal fees will be borne by each party. In light of ongoing negotiations and the likelihood of settlement, the Company has accrued an estimate of $0.4 million to warranty expense.

Canadian Payroll Taxes

As discussed in Note 11 – Related Party Notes Payable and Related ~~Pary~~Party Convertible Note Payable above, ~~the~~any tax liability ~~arising~~assessed in ~~respect~~connection ofwith this ~~issue~~matter will reduce the repayment amount of the ~~note~~related ~~repayment~~vendor note to the former owners of Fat Panda, on a dollar for dollar, ~~by the amount of any tax liability assessed~~basis.

Leases

The Company has 36 agreements to lease retail space, office and manufacturing space in Manitoba, Saskatchewan, and Ontario, Canada. The total square footage of these facilities is approximately 49,076.

The Company also has a lease agreement for its manufacturing and office space in Louisville, CO. The total square footage of the facility is 11,491. Refer to Note 5 – Leases above.

Other Commitments

In the ordinary course of business, the Company enters into commitments to purchase inventory and may also provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors, and employees of acquired companies, in certain circumstances.

Note 13 – Shareholders’ Equity

Stockholder Rights Agreement

On December 26, 2025, the Board of Directors (the “Board”) of the Company adopted a limited duration shareholder rights agreement (the “Rights Agreement”). This agreement is designed to reduce the probability that any person, entity, or group can gain control of the Company through open-market accumulation without providing all shareholders with an appropriate control premium or affording the Board sufficient time to make well-informed decisions in the best interests of all shareholders. In accordance with the Rights Agreement, the Company issued, as a dividend, one right (a “Right”) for each share of the Company’s common stock held as of January 8, 2026, and for each share of certain outstanding common stock warrants. Each Right allows its holder to purchase 1/1000th of a share of Series C Junior Participating Preferred Stock at an exercise price of $33.50 per Right. Each share of Series C Junior Participating Preferred Stock is equivalent to 1,000 shares of the Company’s common stock. The Rights have a limited term and will expire on December 26, 2026, or earlier, as specified in the Rights Agreement.

Under the terms of the Rights Agreement, if any person or group (an “Acquiring Person”) obtains beneficial ownership of 15% or more of the Company’s outstanding common stock, subject to certain exceptions, including an exception for current holders exceeding this percentage who do not acquire additional shares, the Rights become exercisable. All holders of Rights (excluding those held by the Acquiring Person, which will become void and non-exercisable) are entitled to purchase shares of the Company’s common stock at a 50% discount to the prevailing market price, at an exchange ratio of one share of common stock, or one one-thousandth of a share of Series C Junior Participating Preferred Stock (or of another class or series of preferred stock with equivalent rights, preferences, and privileges), per outstanding Right, subject to adjustment.

The adoption of the Rights Agreement had no effect on the Company’s condensed consolidated financial statements, including basic and diluted earnings per share.

PIPE Financing

In August 2025, the Company entered into securities purchase agreements with a group of institutional and accredited investors pursuant to which it issued and sold shares of common stock and various classes of warrants (the “PIPE Warrants”) in a private placement (the “PIPE Transaction”):

	●	41,754,478 shares of common stock at a purchase price of $10.10 per share;
	●	7,750,510 pre-funded warrants, each exercisable for one share of common stock at an exercise price of $0.00001 per share (“Pre-Funded Warrants”); and
	●	49,504,988 stapled warrants (warrants issued together with shares), each exercisable at $15.15 per share (“Stapled Warrants”).

On August 5, 2025, the Company closed athe ~~private investment in public equity (“~~PIPE”) ~~transaction~~Transaction, which was settled through a combination of cash and digital assets. The Company received an aggregate proceeds of $208.3 million in cash and cash equivalent proceeds, net of issuance costs and $273.2 million in digital assets, consisting of USDT, USDC and BTC. The Company allocated $305.0 million in proceeds to warrant liability based on fair value of the Stapled Warrants with the remaining proceeds of $195.0 million were recorded in additional paid-in capital, net of issuance costs. The Company incurred a total of $23.9 million in issuance costs. Issuance costs of $14.5 million were allocated to Stapled Warrants and recorded as an expense in condensed consolidated statements of operations.

At-The-Market Offering

On ~~September~~August 2225, 2025, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement “or “ATM Program”) with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $~~25,000,000~~50.0 million from time to time through the Agent, acting as the Company’s sales agent or principal. Sales under the ATM Agreement, if any, will be made by means of ordinary brokers’ transactions on Nasdaq or otherwise at market prices prevailing at the time of sale, or at prices related to prevailing market prices. Under the ATM agreement, the Company has provided the Agent with customary indemnification rights, and the Agent will be entitled to a commission of up to 3.0% of the gross proceeds from each sale of the ATM Shares effectuated through or to the Agent.

During the period ended ~~October~~January 31, ~~2025~~2026, the Company sold 856,275 shares under the ATM ~~program~~Program for net proceeds of $12.9 million, after deducting sales commissions and other offering costs.

Share Repurchase Program

On September 22, 2025, the Company entered into a Stock Repurchase Agreement with Cantor ~~Fitzerald~~Fitzgerald & Co. pursuant to which the Company agreed to repurchase shares of its common stock. Under the terms of the agreement, the Company repurchased an aggregate of ~~529~~1,~~170~~647,047 and 2,176,217 shares of its common stock during the quarter ended ~~October~~ January 31, ~~2025~~2026 and the period from June 7, ~~for~~2025 athrough ~~total~~January 31, 2026, for aggregate purchase ~~price~~prices of $8.9 ~~approximately~~million and $413.2 million,~~385,567~~ respectively. The repurchased shares were retired and are no longer outstanding.

The ~~repurchase~~repurchases ~~was~~were funded through available cash on hand. The transaction was accounted for as a reduction of stockholders’ equity.

Predecessor

As of April 30, 2025, the Company was authorized to issue 1,410 shares of common stock, all of which were issued and outstanding as of that date. No shares of common stock were issued by the Company during the period from May 1, 2025, through June 6, 2025 or during the six months ended October 31, 2024.

Note 14 – Equity Compensation

Successor

2017 Equity Incentive Plan

Under the Company’s 2017 Equity Incentive Plan, as may be modified and amended by the Company from time to time (the “2017 ~~Equity~~ Equity Plan”), the Board of Directors (the “Board”) (or the compensation committee of the Board, if one is established) may ~~award~~ grant equity-based awards, including stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock unit awards (“RSUs”), shares granted as a bonus or in lieu of another award, and other stock-based performance awards. The 2017 Equity Plan ~~allocates~~authorized 27,778 shares of the Company’s common stock (“Plan Shares”) for issuance of equity awards under the 2017 Equity Plan. ~~If any~~ Any shares subject to an award that are forfeited, expire, or otherwise terminate without issuance ofare ~~such shares, the shares will, to the extent of such forfeiture, expiration, or termination,~~ again be available for ~~awards~~grant under the 2017 Equity Plan.

~~During~~As ~~the~~of ~~period~~January ~~June 7, 2025 to October~~ 31, ~~2025~~2026, ~~1,111 non-qualifying~~of ~~stock~~the ~~options previously issued to certain directors expired~~27,778 ~~unexercised,~~shares ~~2,700 new~~authorized ~~non qualifying stock options were issued to new employees~~ under the 2017 ~~Equity~~ Plan ~~and~~for ~~600~~equity ~~non-qualifying~~awards, ~~stock~~13,641 ~~were~~shares have been issued, toawards relating ~~new~~to ~~employees~~10,383 ~~under~~options ~~the~~remain ~~2017~~outstanding, ~~Equity~~and ~~Plan~~3,754 ~~options~~shares ~~has~~remain ~~been~~available ~~expired~~for ~~and~~future ~~forfeited~~equity awards.

As of October 31, 2025, of the 27,778 shares authorized under the 2017 Plan for equity awards, 13,641 shares have been issued, awards relating to 12,318 options remain outstanding, and 1,819 shares remain available for future equity awards.19

2021 Equity Incentive Plan

OnThe ~~March 22,~~ 2021, ~~the Board approved the 2021~~ Equity Incentive Plan (the “2021 Equity Plan”), ~~which~~ was approved by the ~~stockholders~~Board on March 22, 2021 and by the Company’s stockholders on July 22, 2021. The 2021 Equity Plan ~~permits~~authorizes the Board to grant awards of up to 55,556 shares of common stock. The 2021 Equity Plan provides for the grant of incentive stock options intended to qualify under Section 422 ~~of the Internal Revenue Code of 1986, as amended~~ ~~(the~~ “Code”), non-qualified stock options, ~~stock appreciation rights (“~~SARs”), ~~restricted~~RSAs, ~~stock~~RSUs ~~awards~~ and ~~restricted stock unit awards and~~ other equity linked awards to our employees, consultants, and directors. If an equity award (i) expires or otherwise terminates without having been exercised in full or (ii) is settled in cash (i.e., the holder of the award receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of common stock that may be issued pursuant to this Plan.

~~During~~As ~~the~~of ~~period~~January ~~June 7~~31, ~~2025~~2026, toof ~~October~~the 3155,556 ~~2025,~~shares ~~5,320~~authorized ~~restricted stock units were issued~~ under the 2021 Equity Plan., ~~During~~35,927 ~~the~~shares ~~period~~have ~~October~~been issued in settlement of restricted ~~31,~~stock ~~2025~~units, ~~2,660~~awards ~~shares~~relating ofto ~~common~~8,324 non-qualified stock ~~were~~options, ~~issued~~3,401 inincentive ~~settlement~~stock ofoptions ~~vested~~and 1,330 restricted stock units ~~issued~~remain outstanding. to6,574 ashares ~~director~~remain ~~under~~available ~~the~~for ~~2021 Equity~~future ~~Plan~~equity awards.

As of October 31, 2025, of the 55,556 shares authorized under the 2021 Equity Plan, 35,927 shares have been issued in settlement of restricted stock units, awards relating to 8,324 non-qualified stock options, 6,061 remaining outstanding, and 5,234 shares remain available for future equity awards.

2025 Equity Incentive Plan

~~On July~~The ~~25, 2025, the~~ Company adopted the 2025 Equity Incentive Plan (the “2025 Equity Plan”) on July 25, 2025. The 2025 Equity Plan ~~permits~~authorizes the Board to grant awards of up to 525,000 shares of common stock. The 2025 Equity Plan provides for the grant of incentive stock options intended to qualify under Section 422 ~~of the Internal Revenue~~ Code ~~of 1986~~, ~~as amended (the “Code”),~~ non-qualified stock options, stock appreciation rights (“SARs”), restricted stock awards and restricted stock unit awards and other equity linked awards to our employees, consultants, and directors. If an equity award (i) expires or otherwise terminates without having been exercised in full or (ii) is settled in cash (i.e., the holder of the award receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of common stock that may be issued pursuant to this Plan.

~~During~~As ~~the~~of ~~period~~January ~~June~~31, 72026, ~~2025~~of tothe ~~October 31~~525,000 shares authorized under the 2025 Equity Plan, 524,999 restricted stock units ~~were~~remain ~~issued~~outstanding toand one ~~directors~~share ~~and~~remains ~~employees~~available ~~under~~for ~~the~~future ~~2025~~equity ~~Equity Plan~~awards.

19Non-Qualified and Incentive Stock Options granted to employees and consultants

~~Warrants~~A summary of the non-qualified stock options and incentive stock options granted to employees and consultants under the 2017 and 2021 Equity Plans during the period from June 7, 2025 through January 31, 2026, are presented in the tables below:

~~On August~~ Schedule 5, 2025, the Company entered into a Strategic Advisor Agreements with 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 digital asset technology sector. As compensation for services rendered by the Strategic Advisor under the Strategic Advisor Agreement, the Company issued to the Strategic Advisor warrants to purchase 5,940,598 shares of ~~the Company’s Common~~ Stock ~~(the~~Option “Strategic Advisor Warrants”) at an exercise price of $0.00001 per share. The Strategic Advisor Warrants were fully vested upon issuance, exercisable at any time after issuance until the five (5) year anniversary of issuance. The total grant-date fair value of the Strategic Advisor Warrants is $105.5 million, which was accounted for as the issuance cost, net against the cash proceeds from the PIPE Financing.Activity

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term ( in years)		Aggregate Intrinsic Value

Outstanding as of June 7, 2025		18,296		$	83.19		5.17	$	-
Granted		2,700			7.74		9.36		-
Exercised		-			0.00		-		-
Forfeited		(450	)		7.74		-		-
Expired		(2,086	)		27.72		-		-
Outstanding as of January 31, 2026		18,460		$	79.45		5.64	$	-
Exercisable as of January 31, 2026		16,211		$	89.41		5.12	$	-

The aggregate intrinsic value for the stock options outstanding and exercisable as of January 31, 2026, was zero because these options were out of money on January 31, 2026.

The Company has issued options with a 10-year contractual term and a vesting period ranging from one month to thirty-two months.

For the period from June 7, 2025 through January 31, 2026, the Company recorded $11 thousand as compensation expense related to stock options issued to employees and consultants. As of January 31, 2026, total unrecognized compensation expense for the non-qualified options issued to employees and consultants is $6 thousand which will be recognized over a weighted average period of 0.36 years.

Non-Qualified Stock Options granted to directors

A summary of the non-qualified stock options granted to directors under the 2017 and 2021 Equity Plans, during the period from June 7, 2025 through January 31, 2026, are presented in the tables below:

Schedule of Non Qualified Stock Option

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value

Outstanding, June 7, 2025		4,760		$	113.34		3.53	$	-
Granted		-			-		-		-
Exercised		-			-		-		-
Forfeited		-			-		-		-
Expired		(1,111	)		52.2		-		-
Outstanding, January 31, 2026		3,649		$	131.95		3.94	$	-
Exercisable, January 31, 2026		3,649		$	131.95		3.94	$	-

The aggregate intrinsic value for the stock options outstanding and exercisable as of January 31, 2026 was zero because these options were out of money on January 31, 2026.

During the period from June 7, 2025 through January 31, 2026, the Company did not incur any compensation expense related to options issued to directors.

Restricted Stock Units granted to employees and directors

Effective July 27, 2025, the Company accelerated the vesting of 1,529 restricted stock units issued to a director and settled these units by the issuance of 1,529 shares of common stock.

During the period June 7, 2025 through January 31, 2026, the Company recorded $49.2 thousand as compensation expense related to RSUs issued to directors and employees. Aggregate fair value of restricted stock units vested during the period June 7, 2025, to January 31, 2026 is $40 thousand.

Schedule of Restricted Units Activity

	Number of Units			Weighted Average Grant-Date Fair Value

Unvested, June 7, 2025		1,529		$	8.18
Granted		5,320			9.40
Vested and settled with share issuance		(4,189	)		-
Forfeited/cancelled		(1,330	)		9.40
Unvested, January 31, 2026		1,330		$	8.89

Stock-based compensation warrants

On August 5, 2025, the Company entered into a Strategic Advisor Agreements with 10X BNB Cayman Sponsor and YZi Labs Management 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 digital asset technology sector. As compensation for services rendered by the Strategic Advisor under the Strategic Advisor Agreement, the Company issued to the Strategic Advisor warrants to purchase 5,940,598 shares of the Company’s Common Stock (the “Strategic Advisor Warrants”) at an exercise price of $0.00001 per share. The Strategic Advisor Warrants were fully vested upon issuance, exercisable at any time after issuance until the five (5) year anniversary of issuance. The total grant-date fair value of the Strategic Advisor Warrants is $105.5 million, which was accounted for as the issuance cost, net against the cash proceeds from the PIPE Financing.

On August 5, 2025, the Company also entered into an asset management agreement (the “Asset Management Agreement”) with 10X Capital Partners LLC (the “Asset Manager”). Under the Asset Management Agreement, the Company issued warrants to purchase 990,099 shares of the Company’s Common Stock (“Asset Manager Warrants”) at an exercise price of $10.23 per share. The Asset Manager Warrants are fully vested at issuance, exercisable at any time after issuance until the five (5) year anniversary of issuance. The total grant-date fair value of the Asset Manager Warrants is $15.0 million, which was accounted for as the issuance cost, net against the cash proceeds from the PIPE Financing.

Strategic Advisor warrants and Asset Manager warrants are accounted for as equity classified share-based compensation award in accordance with ASC 718. Following is a summary of the activities of warrants for the ~~six~~period ~~months~~ ended ~~October~~January 31, ~~2025~~2026:

Schedule of Warrant Activity

	Number of Warrants		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of July 30, 2025		-	$	-		-
Outstanding as of June 7, 2025		-	$	-	$	-
Granted		6,930,697		1.46
Exercised		2,376,236		-0
Forfeited		-		-
Expired		-		-
Outstanding as of October 30, 2025		4,554,461	$	2.22	$	26,447,530
Outstanding as of January 31, 2026		4,554,461	$	2.22	$	17,786,131
Exercisable as of October 30, 2025		4,554,461	$	2.22	$	26,447,530
Exercisable as of January 31, 2026		4,554,461	$	2.22	$	17,786,131

The measurement of fair value of the Strategic Advisor Warrants was determined based on the fair value of the underlying Common Stock on the issuance date given the nominal exercise price.

The Company estimated the fair value of Asset Manager warrants using the Black-Scholes option-pricing model, which requires assumptions, including volatility, the expected term of the warrants, the risk-free interest rate for a period that approximates the expected term of the warrants, and expected dividend yield. Volatility is estimated based on the historical volatility of the guideline public companies over a period approximately equal to the expected term. The contractual term of the warrants is used as the expected term since the warrant holders are nonemployees and expected to hold the warrants to expiration to maximize the value of the warrants.

The table below summarizes the key assumption inputs used for the valuation for the ~~six~~period ~~months~~from ~~ended~~June ~~October~~7, 2025 through January 31, ~~2025~~2026:

Schedule of Key Assumption Inputs

	Asset Manager Warrants
Stock Price	$	17.7
Stock price	$	17.7
Exercise Price	$	10.23
Exercise price	$	10.23
Expected Term (in years)		5.00
Expected term (in years)		5
Risk-free interest rate		3.77	%
Expected volatility		110	%
Expected dividend yield		-0	%

20Note 15 - Investor Warrants

Non-Qualified and Incentive Stock Options

A summary of the non-qualified stock options and incentive stock options granted to employees and consultants under the 2017 and 2021 Equity Plans during the period from June 7, 2025 through October 31, 2025, are presented in the tables below, including information on nonvested options:

Schedule of Stock Option Activity

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding as of June 7, 2025		18,296		$	83.19		5.20		-
Granted		2,700		$	7.74		9.62		-
Exercised		-		$	-		-		-
Forfeited		(450	)	$	7.74		-		-
Expired		(150	)	$	8.99		-		-
Outstanding as of October 31, 2025		20,396		$	74.68		5.34		-
Exercisable as of October 31, 2025		18,146		$	82.98		4.81		-

The aggregate intrinsic value for the stock options outstanding and exercisable as of October 31, 2025, was zero because these options were out of money on October 31, 2025.

During the period from June 7, 2025 through October 31, 2025, 2,700 stock options were issued to employees with an exercise price of $7.74, a 10-year contract term and a 1one- year vesting period.

For the period from June 7, 2025 through October 31, 2025, the Company recorded $6,579 as compensation expense related to stock options issued to employees and consultants.

A summary of the non-qualified stock options granted to directors under the 2017 and 2021 Equity Plans, during the three months ended October 31, 2025, are presented in the tables below:

Schedule of Non Qualified Stock Option

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding, June 7, 2025		4,760		$	113.34		3.5		-
Granted		-		$	-		-		-
Exercised		-		$	-		-		-
Forfeited		-		$	-		-		-
Expired		(1,111	)	$	52.20		-		-
Outstanding, October 31, 2025		3,649		$	131.95		3.5		-
Exercisable, October 31, 2025		3,649		$	131.95		4.2		-

The aggregate intrinsic value for the stock options outstanding and exercisable as of October 31, 2025 was zero because these options were out of money on October 31, 2025.

During the period from June 7, 2025 through October 31, 2025, the Company did not incur any compensation expense related to options issued to directors.

Restricted Stock Units

Effective July 27, 2025, the Company accelerated the vesting of 4,189 restricted stock units issued to a director and settled these units by the issuance of 4,189 shares of common stock. In addition, the Company granted 524,999 restricted stock units to directors and employees under the 2025 Equity Plan and 5,320 restricted stock units under the 2021 Equity Plan.

During the period June 7, 2025 through October 31, 2025, the Company recorded $4,693,868 as compensation expense related to RSUs issued to directors and employees.

Schedule of Restricted Units Activity

	Number of Units			Weighted Average Grant-Date Fair Value		Aggregate Intrinsic Value
Outstanding, June 7, 2025		1,529		$	8.18	$	11,345
Granted		530,139		$	8.88		3,934,967
Vested and settled with share issuance		(4,189	)	$	8.95		(31,082	)
Forfeited/cancelled		-		$	-		-
Outstanding, October 31, 2025		527,659		$	8.89	$	3,915,230

Predecessor

The Predecessor did not issue any share-based compensation awards or incur any compensation expenses related to share-based compensation awards.

Note 15 - Warrants

Pre-Funded Warrants

~~During~~On ~~the~~August ~~three months ended October 31~~5, 2025, the Company issued Pre-Funded Warrants exercisable for 7,750,510 shares of Common Stock in conjunction with the PIPE ~~transaction~~ Transaction. The Pre-Funded Warrants are exercisable for a ~~nomination~~nominal consideration of $0.~~0001~~00001 per share, are exercisable immediately and may be exercised at any time until all of the Pre-Funded Warrants issued in the Private Placement are exercised in full. The ~~measurement of~~ fair value of the Pre-Funded Warrants was determined based on the fair value of the underlying Common Stock on the issuance date given the nominal exercise price.

Stapled Warrants

~~During~~On ~~the~~August ~~three months ended October 31~~5, 2025, the Company issued Stapled Warrants exercisable for 49,504,988 shares of Common Stock in conjunction with the PIPE ~~transaction~~Transaction. The Stapled Warrants are exercisable immediately and may be exercised at any time until three years from issuance for an exercise price of $15.15 per share. The warrants contain a mandatory exercise right for the Company to force exercise of the warrants if the volume-weighted average price (“VWAP”) of the common stock exceeds $20.20 for 20 out of 30 trading days. Stapled Warrants are classified as liability as they are not considered indexed to the Company equity shares in accordance with ASC 815-40 due to certain ~~adjustments~~ adjustments to settlement amount on events that are not within the control of the Company. The following table provides a summary of changes in fair value of the Company’s warrant liability~~, determined using Level 3 inputs~~:

Schedule of Warrant Liability

	Amount
Fair value at issuance	$	304,950,726
Change in fair value during the period		(~~206~~244,~~818~~879,~~087~~854	)
Fair value as of October 31, 2025	$	98,132,639
Fair value as of January 31, 2026	$	60,070,872

22The Company used the Monte-Carlo option model to compute the fair value of the Stapled Warrants. The following table summarizes the level 3 inputs used in the valuation of the Stapled Warrants:

The Company used the Monte-Carlo option model to compute the fair value (level 3) of the Stapled Warrants. The following table summarizes the inputs used in the valuation of the Stapled Warrants:

	August 5, 2025			~~October~~January 31, ~~2025~~2026
Stock price	$	17.77		$	74.4299
Expected volatility		70	%		8595	%
Simulated Trading Days		754			692
Simulated trading days		754			632
Risk-free interest rate		3.60	%		3.5753	%
Dividend yield		-			-
Holding period (years)		3.00			2.7651

During the period from June 7, 2025, to ~~October~~January 31, ~~2025~~2026, a total of 119,535 warrants were exercised on a cashless basis resulting in the issuance of 17,582 shares of common stock.

The following table summarizes information about warrants outstanding atas ~~October~~of January 31, ~~2025~~2026:

Schedule of Warrant Outstanding

Warrants Outstanding at October 31, 2025			Exercise price
		Grant date	Warrants outstanding		Exercise price
	49,504,988		$	15.15
Stapled warrants		Aug-25		49,504,988	$	15.15
	7,750,510		$	0
Pre-funded warrants		Aug-25		7,750,510	$	0.00
	472,590		$	60
Investor warrants		Feb-22		472,590	$	60.00
	24,213		$	61.95
2022 Underwriter warrants		Feb-22		24,213	$	61.95

~~There were no outstanding warrants during the predecessor period from May 1, 2025 through June 6, 2025.~~23

Note 16 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	2026			2025		2026		2025		2025
	Successor			Predecessor		Successor		Predecessor
	Three months ended October 31,			Three months ended October 31,		Period from June 7 through October 31,		Period from May 1 through June 6,		Six months ended October 31,
	Three months ended January 31,			Three months ended January 31,		Period from June 7 through January 31,		Period from May 1 through June 6,		Nine months ended January 31,
	2025			2024		2025		2025		2024
	2026			2025		2026		2025		2025
Basic earnings per share:
Numerator:
Net income available to common shareholders - basic	$	283,642,773			291,617	$	277,794,376	$	19,013		1,000,040
Net income/(loss) available to common shareholders - basic	$	(106,572,140	)		773,317	$	171,222,236	$	19,013		1,773,357
Denominator:
Weighted-average number of common shares outstanding – basic		5253,~~586~~180,~~930~~317			1,410		3220,~~780~~666,~~642~~014		1,410		1,410
Basic earnings per common share	$	5(2.3900	)	$	~~206~~548.8245	$	8.4729	$	13.48	$	~~709~~1,257.2570
Diluted earnings per share:					-						-
Numerator:
Net income available to common shareholders - basic	$	283,642,773		$	291,617	$	277,794,376	$	19,013		1,000,040
Net income/(loss) available to common shareholders - basic	$	(106,572,140	)	$	773,317	$	171,222,236	$	19,013		1,773,357
Add: Interest and discount amortization on convertible notes	$	~~14,181~~-			-	$	2237,~~830~~191	$	-		-
Net income available to common shareholders - dilutive	$	~~283~~(106,~~656~~572,~~954~~140	)	$	~~291~~773,~~617~~317	$	~~277~~171,~~817~~259,~~206~~427	$	19,013	$	1,~~000~~773,~~040~~357
Denominator:
Weighted-average number of common shares outstanding – basic		5253,~~586~~180,~~930~~317			1,410		3220,~~780~~666,~~642~~014		1,410		1,410
Add: dilutive securities
Warrants		~~273,484~~-			-		~~136~~91,~~742~~161		-		-
Stock Options		1,703			-		1,510		-		-
Stock options		-			-		1,007		-		-
RSUs		-			-		~~587~~392		-		-
Convertible Note		39,808			-		40,769		-		-
Convertible note		-			-		41,463		-		-
Weighted-average number of common shares outstanding - diluted		5253,~~901~~180,~~925~~317			1,410		3320,~~960~~800,~~249~~036		1,410		1,410
Diluted earnings per common share	$	5(2.3600	)	$	~~206~~548.8245	$	8.4323	$	13.48	$	~~709~~1,257.2570

The following table summarizes the securities that were not included in the computation of diluted income per common share as they are anti-dilutive:

	Period from November 1, 2025 through January 31, 2026		Period from June 7 through January 31, 2026
	Successor
	Period from August 1 through October 31, 2025		Period from June 7 through October 31, 2025
	Period from November 1, 2025 through January 31, 2026		Period from June 7 through January 31, 2026
Unvested RSUs		21,~~660~~330		21,~~660~~330

Note 17 – Income Taxes

For the period from June 7, 2025 to ~~October~~January 31, ~~2025~~2026 (Successor), the period from May 1, 2025 to June 6, 2025 (Predecessor) and the ~~six months~~nine months ended ~~October~~January 31, ~~2024~~2025 (Predecessor), the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

	Successor			Predecessor			Predecessor			Successor			Predecessor
	Period from June 7 through October 31,			Period from May 1 through June 6, 2025			Six Months Ended October 31,			Three Months Ended October 31,			Three Months Ended October 31,2024
	Period from June 7 through January 31,			Period from May 1 through June 6,			Nine months ended January 31,			Three months ended January 31,			Three months ended January 31,
	2025			2025			2024			2025			2024
	2026			2025			2025			2026			2025
Profit/(loss) before income taxes	$	295,894,837		$	20,602		$	1,240,744		$	301,804,270		$	376,668
Income (loss) before income taxes	$	170,930,482		$	20,602		$	2,200,195		$	(124,964,353	)	$	957,654
Income tax expense (benefit)		18,100,461			1,589			240,704			18,161,497			85,051
Income tax expense (benefits)		(291,754	)		1,589			426,838			(18,392,213	)		184,337
Effective income tax rate		6-0.12	%		7.7	%		19.4	%		614.07	%		2219.62	%

The change in the effective tax rate for the period June 7, 2025 to January, 31, 2026 (Successor), compared to the predecessor period for May 1, 2025 to June 6, 2025 (Predecessor), and the three months ended January 31, 2026 (Successor) compared to January 31, 2025 (Predecessor), was primarily due to the impact of foreign statutory rates that are lower than the U.S. statutory tax rate, non-deductible transaction costs, U.S. inclusions on foreign income, and changes to valuation allowances on the legacy business of CEA Industries Inc.’s United States operations.

During the first quarter, the Company completed the acquisition of Fat Panda, which is taxed as a Canadian corporation. For Canadian federal income tax purposes, the transaction was treated as a stock acquisition with no step-up basis in tax. As a result, the goodwill and intangible assets recorded for financial reporting purposes are not deductible for tax purposes, giving rise to $1.2 million deferred tax liability, which is included in the Company’s net deferred tax liability.

~~The~~As ~~change~~of inJanuary ~~the~~31, ~~effective~~2026, ~~tax~~the ~~rate~~Company ~~for~~had ~~the~~$41.3 ~~period~~million ~~June~~of 7,U.S. ~~2025~~federal toand ~~October~~state ~~31,~~net ~~31,~~operating ~~2025~~loss (~~Successor~~“NOL”), ~~compared~~carry toforwards ~~the predecessor period~~related ~~for May 1, 2025~~ to ~~June~~its 6,legacy ~~2025~~U.S. ~~(Predecessor),~~operations. ~~and~~Approximately ~~the~~$11.2 ~~three~~million ~~months~~will ~~ended July 31~~expire, ~~2024~~if ~~(Predecessor)~~not utilized, ~~was~~in ~~primarily~~calendar ~~due~~years to2034 ~~the impact~~through of2037. ~~foreign~~NOLs ~~statutory~~generated subsequent ~~rates~~to ~~that~~December ~~are lower than the U.S. statutory tax rate~~31, ~~non-deductible~~2017 ~~transaction~~do ~~costs,~~not ~~U.S.~~expire ~~inclusions on~~but ~~foreign~~may ~~income,~~be ~~and~~used ~~changes~~ to ~~valuation~~offset ~~allowances~~no onmore ~~the~~than ~~legacy~~80% ~~business~~ of ~~CEA~~taxable ~~Industries~~income ~~Inc.’s~~in ~~United~~any ~~States operations~~given year.

~~The~~Pursuant ~~Company~~to ~~completed~~Section 382 of the ~~acquisition~~Internal Revenue Code of ~~Fat~~1986, ~~Panda~~as ~~Ltd.~~amended, and ~~related~~applicable ~~entities~~state law, ~~taxed~~the asCompany’s ~~Canadian~~ability ~~corporations,~~to ~~during~~utilize ~~the~~its NOL ~~quarter.~~carry ~~For~~forwards ~~Canadian federal~~may ~~income~~be ~~tax~~limited ~~purposes,~~if the ~~transaction~~Company ~~was~~experiences ~~treated~~an “ownership change”, generally defined as a ~~stock~~greater ~~acquisition~~than 50% ~~with~~cumulative nochange ~~step-up~~ in ~~tax~~equity ~~basis.~~ownership Asby value over a ~~result,~~three-year ~~the~~period. ~~goodwill and~~The ~~intangible~~securities ~~assets~~offerings ~~recorded~~completed ~~for~~in ~~financial~~September ~~reporting~~2021 ~~purposes~~and February ~~are~~2022, ~~not~~and ~~deductible~~the ~~for~~August ~~tax~~2025 ~~purposes.~~private ~~This~~placement ~~created~~must abe ~~deferred~~evaluated ~~tax~~to ~~liability of~~determine $1whether an ownership change has occurred.2 ~~million,~~If ~~which~~an ownership change is ~~included~~determined into have occurred, the Company’s ~~net~~ability ~~deferred~~to utilize its NOL carry forwards may be materially limited, which could adversely affect future tax ~~position~~obligations.

AsThe ofCompany ~~October~~must ~~31,~~assess ~~2025,~~ the ~~Company~~likelihood ~~has~~that ~~U.S.~~its ~~federal and state~~ net ~~operating~~deferred ~~losses~~tax ~~(“NOLs”)~~assets ~~related to the legacy CEA Industries, Inc. United States operations of approximately $31,455,315 of which $11,196,000~~ will ~~expire, if not utilized, in the years 2034 through 2037, however, NOLs generated subsequent to December 31, 2017 do not expire but may only~~ be ~~used~~recovered ~~against~~from future taxable income ~~to 80%. In addition~~, ~~pursuant~~and to ~~Section 382 of~~ the ~~Internal~~extent ~~Revenue Code of 1986, as amended, use of~~ the Company’s ~~NOLs~~believes ~~carryforwards may~~that berecovery ~~limited~~is innot ~~the event of cumulative changes in ownership of more than 50% within a three-year period. In addition~~likely, ~~under Section 382 of~~ the ~~Internal~~Company ~~Revenue~~establishes ~~Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if~~ a ~~corporation~~valuation ~~undergoes~~allowance. anManagement’s ~~“ownership~~judgment ~~change,” which~~ is ~~generally defined as a greater than 50%~~required ~~change, by value,~~ in ~~its~~determining ~~equity ownership over a three-year period,~~ the ~~corporation~~Company’s ~~ability~~provision tofor ~~use its pre-change net operating loss carryforwards and other pre- change tax attributes to offset its post-change~~ income or taxes, ~~may~~deferred betax ~~limited.~~assets ~~The securities sales we completed in September 2021~~ and ~~February~~liabilities, ~~2022~~ and ~~the Private Placement Offering discussed in Note 20 Subsequent Events below will need to be evaluated for determination of~~ any ~~“ownership~~valuation ~~change”~~allowance ~~that we may have~~recorded ~~undergone~~against ~~during~~the ~~a determination period. If an ownership change has occurred, our ability to use our~~ net ~~operating~~deferred ~~loss carryforwards is materially limited and it would harm our future post~~ tax ~~results by effectively increasing our future tax obligations~~assets.

~~The~~As ~~Company~~of ~~must~~January ~~assess the likelihood that its net deferred tax assets will be recovered from future taxable income~~31, ~~and to the extent the Company believes that recovery is not likely~~2026, the Company ~~establishes~~recorded a full valuation allowance. ~~Management’s judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded~~ against the ~~net~~ deferred tax assets. ~~The Company recorded a full valuation allowance~~ related to ~~CEA~~its ~~Industries Inc~~U.S ~~United States~~ operations ~~as of October 31, 2025~~. Based on the available evidence, the Company believes it is more likely than not that itthese ~~will not be able to utilize its net~~ deferred tax assets inwill ~~the~~be ~~foreseeable~~realized ~~future~~in ~~related~~the ~~to its United States~~foreseeable ~~operations~~future. The Company intends to maintain valuation allowances until sufficient evidence exists to support the reversal ~~of such valuation allowances~~. ~~The~~Estimates ~~Company~~of ~~makes estimates and judgments about its~~ future taxable income ~~that~~ are based on assumptions ~~that are~~ consistent with the Company’s operating plans. ~~Should~~However, ~~the~~if actual ~~amounts~~results differ from ~~the Company’s~~ these estimates, the carrying value of ~~the Company’s~~ deferred tax assets could be materially impacted.

The Company also regularly ~~assesses~~evaluates the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance ~~on accounting for income taxes~~. ~~The~~Uncertain ~~Company records uncertain~~ tax positions onare ~~the~~recorded ~~basis~~using of a two-step process; ~~in which:~~ (i) the ~~Company~~determining ~~determines~~ whether ita tax position is more likely than not ~~that~~to ~~the tax positions will~~ be sustained on the basis of the technical merits ~~of the position~~, and (ii) ~~for~~measuring ~~those tax positions that meet~~ the ~~more-likely-than-not~~amount ~~recognition~~of ~~threshold,~~benefit ~~the~~to ~~Company~~recognize ~~recognizes~~as the largest amount ~~of tax benefit~~ that is more likely than not to be realized upon ultimate settlement ~~with the related tax authority~~. The Company currently has recorded a $~~200,000~~0.2 ~~tax~~million ~~reserve~~reserves for uncertain tax positions in Canada.

On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act, (the “Act”) into law. The ~~legislation~~Act includes several ~~changes~~ changes to federal tax law that generally allow for more ~~favourable~~favorable deductibility of certain business expenses beginning in 2025, including ~~the~~ the restoration of immediate expense of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more ~~favourable rules~~favorable rules for determining the limitation on business interest expense.

The Act also includes certain changes to the US taxation of foreign activity, including changes to foreign tax credits, GILTI, FDII, and BEAT, amongst other changes. These changes are generally effective for tax years beginning after Dec. 31, 2025.

The Company is currently assessing the impact of the ~~One~~Act ~~Big Beautiful Bill~~ but does not expect ~~the passing of this legislation will~~ have a material impact on the tax provision.

Note 18 – Related Party Transactions

Agreements and Transaction with a Company Director ~~and previous director~~

~~The~~Mr. Nicholas J. Etten, a member of the Company’s ~~entered~~Board ~~into~~of aDirectors, ~~manufacturer~~was ~~representative~~previously ~~agreement~~party ~~with~~to ~~RSX~~two ~~Enterprises~~consulting agreements, one dated July 28, 2025 (the “~~RSX~~2025 Agreement”) inand ~~March~~a ~~2021~~prior toagreement ~~become~~dated ~~a non-exclusive~~June ~~representative~~19, ~~for~~2024 which was replaced by the ~~Company~~2025 Agreement. These agreements contemplated that Mr. Etten would provide advisory services related to ~~assist~~acquisition insourcing, ~~marketing~~strategic consulting, and ~~soliciting~~investor ~~orders.~~coordination, ~~James~~and would R.be ~~Shipley,~~compensated ~~one~~at ofa ~~our~~rate ~~former~~of $2.5 ~~independent~~thousand ~~directors~~per week, ~~has~~subject ato ~~significant~~downward ~~ownership~~adjustment ~~interest~~based inon ~~RSX~~hours worked.

The Company paid Mr. Etten $20.0 thousand during the three months ended January 31, 2026, and $72.8 thousand during the period from June 7, 2025 through January 1, 2026 for consulting services under these agreements. In January 2026, the Company identified that payments made to Mr. Etten through June 3, 2025 exceeded the amounts expected by $6.3 thousand. On March 15, 2026, Mr. Etten reimbursed the Company $6.3 thousand.

Mr. Etten terminated the 2025 Agreement on February 2, 2026 with effect from January 1, 2026. As of January 31, 2026, there were no amounts payable to Mr. Etten under the 2025 Agreement.

Under the manufacturer representative agreement, RSX will act as a non-exclusive representative for the Company within the United States, Canada and Mexico and may receive a commission for qualified customer leads. The agreement had an initial term through December 31, 2021 with automatic one-year renewal terms unless notice is given 90 days prior to each annual expiration. No payments were made for commissions under this agreement for the period from June 7, 2025 through October 31, 2025 (Successor).

On June 19, 2024, the Company engaged Nicholas J. Etten, a director of the Company, to provide services covering transaction sourcing and evaluation, in the Company’s effort to arrange for a merger, acquisition, combination or other strategic transaction. Mr. Etten has a background in corporate development and investment banking in multiple industries. Mr. Etten will be paid a weekly fee of $2,500. It is expected that Mr. Etten will provide a minimum of 10 hours per week, up to a maximum of 40 hours a month, as determined by the Company and Mr. Etten. The consulting agreement will be on a month-to-month basis, and either the Company or Mr. Etten may terminate the arrangement on five days’ notice. The Company has agreed to indemnify Mr. Etten in respect of his services to the Company under the agreement. During the period from June 7, 2025 through October 31, 2025 (Successor), the Company paid Mr. Etten $48,253 in respect of services related to this agreement.

Promissory notes to former owner/current employee

In connection with the Company’s acquisition of Fat Panda Ltd. on June 6, 2025, the Company issued the following promissory notes to related parties:

● A promissory note with a principal amount of $~~743,351~~0.7 million (CAD $1~~,030,000~~.0 million) to the President of Fat Panda Ltd., who is an employee of the Company and was a selling shareholder of Fat Panda Ltd.

● A convertible promissory note with a principal amount of $~~743,351~~0.7 million (CAD $1~~,030,000~~.0 million) to the President of Fat Panda Ltd.

● A promissory note with a principal amount of $~~360,850~~0.4 million (CAD $~~500,000~~0.5 million) to the selling shareholders of Fat Panda Ltd., one of whom continues to be an employee of the Company.

See Note 11, Related Party Note Payable and Related Party Convertible Note Payable, for additional details.

Asset Management Agreement & Accrued Fee with a Company Director

The Asset Manager is an entity that is majority-owned and controlled by Hans Thomas, a current member of the Company’s Board of Directors. In connection with the PIPE Transaction, the Company entered into the Asset Management Agreement with the Asset Manager, pursuant to which the Company engaged the Asset Manager to provide asset management and related services with respect to the Company’s digital assets strategy in exchange for the applicable management fees. ~~During~~The ~~the~~Company ~~quarter~~recorded ~~ended~~management ~~October~~fees ~~31,~~of ~~2025,~~$2.0 ~~the~~million ~~Company’s~~and ~~accrued~~$3.8 ~~asset~~million for ~~management~~the ~~fees~~three ~~payable to~~months and for the ~~Asset~~period ~~Manager~~from ~~were~~June $17,~~798~~ 2025 through January 31,~~357~~ 2026, ~~which~~respective, ~~were~~and accrued but not paid toasset ~~the~~management ~~Asset~~fees ~~Manager~~payable ~~during~~of ~~the~~$0.6 million ~~quarter~~as ~~ended~~of ~~October~~January 31, ~~2025~~2026.

Note 19 – Segment Reporting

During the second quarter of 2026, the Company introduced a new business line focused on BNB Treasury Management and appointed a new Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”). These changes triggered a reassessment of the Company’s operating segments under ASC 280, Segment Reporting. As a result of this reassessment, the Company determined that it now operates two reportable segments: BNB Treasury Management and ~~legacy~~Retail ~~CEA~~ and ~~retail operations~~Industry. Comparative periods have been re-recast to reflect this change in segment composition.

The CODM evaluates the financial performance of the business and makes resource allocation decisions based on these two distinct sources of business activity:

● BNB Treasury Management – This segment includes income from digital asset activities, costs and expenses related to building and executing the Company’s digital asset strategy, and fair value changes (unrealized gains or losses) on digital assets associated with the Company’s ~~Binance~~BNB holdings.

●

Retail and Industry Segment – This segment includes Fat Panda’s retail and distribution operations along with revenue and operating costs related to designing, engineering, and selling environmental control and other technologies for the Controlled Environment Agriculture industry.

The “Corporate” category presented in the following ~~tale~~table is not considered an operating segment. It consists primarily of corporate support functions including capital and funding to support the business activities of the company and includes costs and expenses not allocated to a line of business.

The CODM uses ~~Income~~income (loss) from operations before provision for income taxes as the primary measure to assess segment performance. This measure is reviewed regularly by examining period-over-period trends, benchmarking against competitors, and monitoring budget versus actual results. The CODM also considers this metric when evaluating income generated from segment assets to determine whether to reinvest profits within the segment or allocate resources elsewhere in the entity.

26The following tables present (for each segment and consolidated total) the Company’s revenues and significant expenses regularly provided to the CODM, reconciled to income (loss) from operations before provision for income tax for each of the periods presented. Total segment assets provided to the CODM are also disclosed in the tables below for each period presented.

The following tables present (for each segment and consolidated total) the Company’s revenues and significant expenses regularly provided to the CODM, reconciled to Income (loss) from operations before provision for income tax (in thousands) for each of the periods presented. Total segment assets (in thousands) provided to the CODM are also disclosed in the tables below for each period presented.

	CEA Industry Segment (Successor)			BNB Treasury Management Segment			Corporate			Total Consolidated
	Three Months Ended October 31, 2025
	Three Months Ended January 31, 2026
	Retail and Industry Segment (Successor)			BNB Treasury Management Segment			Corporate			Total Consolidated
Total Revenue, net	$	7,143,485		$	-		$	-		$	7,143,485
Total revenue, net	$	7,334,626		$	-		$	-		$	7,334,626
Cost of revenue		(5,~~050~~571,~~228~~329	)		-			-			(5,~~050~~571,~~228~~329	)
Unrealized gain on digital asset		-			114,033,718			-			114,033,718
Unrealized loss on digital asset		-			(159,791,308	)		-			(159,791,308	)
Other income from airdrop		-			51,~~827~~265,~~578~~452			-			51,~~827~~265,~~578~~452
Advertising and marketing expenses		(9363,~~900~~506	)		-			(4220,~~561,163~~860	)		(4284,~~655,063~~366	)
Compensation expenses		(1,~~600~~394,~~475~~344	)		(70175,000	)		(61312,~~187~~781	)		(1,~~731~~882,~~662~~125	)
Asset management fees		-			(12,~~798~~013,~~357~~579	)		-			(12,~~798~~013,~~357~~579	)
Professional and contractor fees		(~~966~~66,~~609~~004	)		(~~207~~17,~~855~~070	)		(~~602~~4,~~302~~815,254	)		(14,~~776~~898,~~766~~328	)
Stock-based compensation		(32,~~799~~310,559	)		-			~~(26~~2,~~648~~329,679	)		~~(30~~4,~~447~~640,238	)
Other segment expenses (1)		(~~928~~673,~~040~~406	)		(1380,~~280~~724	)		(15789,~~400,013~~732	)		(161,~~329~~843,~~333~~863	)
Change in fair value of warrant liabilities		-			-			206,818,087			206,818,087
Gain from change in fair value of warrant liabilities		-			-			38,061,767			38,061,767
Interest expense and other income, net		~~(646~~18,~~742~~462	)		-			-			~~(646~~18,~~742~~462	)
Income (loss) from operations before provision for income tax	$	(21,~~146~~895,~~308~~058	)	$	~~117~~(161,~~783~~112,~~804~~229	)	$	~~186~~34,~~166~~252,~~774~~818		$	~~301~~(124,~~804~~964,~~270~~353	)
Total Assets		1617,~~931~~429,~~635~~893			~~567~~409,~~987~~179,~~094~~888			3110,~~545~~163,~~992~~794			~~616~~436,~~464~~773,~~721~~575

	CEA Industry Segment (Predecessor)			BNB Treasury Management Segment		Corporate		Total Consolidated
	Three Months Ended October 31, 2024
	Retail and Industry Segment (Predecessor)			BNB Treasury Management Segment		Corporate		Total Consolidated
Total Revenue, net	$	7,436,751		$	-	$	-	$	7,436,751
Cost of revenue		(4,591,637	)		-		-		(4,591,637	)
Advertising and marketing expenses		(184,013	)		-		-		(184,013	)
Compensation expenses		(1,466,776	)		-		-		(1,466,776	)
Professional and contractor fees		(140,925	)		-		-		(140,925	)
Other segment expenses (1)		(676,732	)		-		-		(676,732	)
Income (loss) from operations before provision for income tax	$	376,668		$	-	$	-	$	376,668

	CEA Industry Segment (Predecessor)			BNB Treasury Management Segment		Corporate		Total Consolidated
	Three Months Ended January 31, 2025
	Retail and Industry Segment (Predecessor)			BNB Treasury Management Segment		Corporate		Total Consolidated
Total revenue, net	$	6,908,817		$	-	$	-	$	6,908,817
Cost of revenue		(5,146,901	)		-		-		(5,146,901	)
Advertising and marketing expenses		(191,531	)		-		-		(191,531	)
Compensation expenses		111,714			-		-		111,714
Professional and contractor fees		(157,496	)		-		-		(157,496	)
Other segment expenses (1)		(566,949	)		-		-		(566,949	)
Income (loss) from operations before provision for income tax	$	957,654		$	-	$	-	$	957,654
Total Assets		8,342,878			-		-		8,342,878

	CEA Industry Segment (Successor)			BNB Treasury Management Segment			Corporate			Total Consolidated			CEA Industry Segment (Predecessor) (2)
	Period from June 7, 2025 to October 31, 2025												Period from May 1, 2025 to June 6, 2025
	Period from June 7, 2025 to January 31, 2026												Period from May 1, 2025 to June 6, 2025
	Retail and Industry Segment (Successor)			BNB Treasury Management Segment			Corporate			Total Consolidated			CEA Industry Segment (Predecessor)
Total Revenue, net	$	11,720,973		$	-		$	-		$	11,720,973		$	2,927,689
Total revenue, net	$	19,055,752		$	-		$	-		$	19,055,752		$	2,927,689
Cost of revenue		(813,~~256~~827,~~041~~593	)		-			-			(813,~~256~~827,~~041~~593	)		(2,001,537	)
Unrealized gain on digital asset		-			114,033,718			-			114,033,718			-
Unrealized loss on digital asset		-			(45,757,590	)		-			(45,757,590	)		-
Other income from airdrop		-			57,~~827~~093,~~578~~030			-			57,~~827~~093,~~578~~030			-
Advertising and marketing expenses		(~~165~~228,~~524~~930	)		-			(4,~~561~~782,~~163~~023	)		(45,~~726~~010,~~687~~953	)		(63,202	)
Compensation expenses		(23,~~090~~484,~~567~~911	)		(70245,000	)		(88401,~~904~~685	)		(24,~~249~~131,~~471~~596	)		(431,340	)
Asset management fees		-			(13,~~798~~811,~~357~~936	)		-			(13,~~798~~811,~~357~~936	)		-
Professional and contractor fees		(2,~~236~~302,~~391~~395	)		(~~207~~224,~~855~~925	)		(~~602~~5,~~301~~417,556	)		(37,~~046~~944,~~547~~876	)		(135,359	)
Stock-based compensation		(233,~~342,870~~572	)		-			(226,~~356,327~~648	)		(460,~~700,457~~220	)		-
Other segment expenses (1)		(12,~~407~~081,~~897~~302	)		(1382,~~280~~004	)		(1516,~~400~~187,~~013~~254	)		(1618,~~809~~650,~~190~~560	)		(275,650	)
Change in fair value of warrant liabilities		-			-			206,818,087			206,818,087			-
Gain from change in fair value of warrant liabilities		-			-			244,879,854			244,879,854			-
Interest expense and other income, net		(~~918~~902,~~769~~830	)		-			-			(~~918~~902,~~769~~830	)		-
Income (loss) from operations before provision for income tax	$	(53,~~698~~805,~~346~~781	)	$	~~117~~(43,~~783~~328,~~804~~425	)	$	~~183~~218,~~809~~064,~~379~~688		$	~~295~~170,~~894~~930,~~837~~482		$	20,602

	CEA Industry Segment (Predecessor)			BNB Treasury Management Segment		Corporate		Total Consolidated
	Six Months Ended October 31, 2024
	Nine Months Ended January 31, 2025
	Retail and Industry Segment (Predecessor)			BNB Treasury Management Segment		Corporate		Total Consolidated
Total Revenue, net	$	14,405,418		$	-	$	-	$	14,405,418
Total revenue, net	$	21,313,671		$	-	$	-	$	21,313,671
Cost of revenue		(813,~~652~~824,~~017~~712	)		-		-		(813,~~652~~824,~~017~~712	)
Advertising and marketing expenses		(~~297~~490,~~205~~008	)		-		-		(~~297~~490,~~205~~008	)
Compensation expenses		(2,~~588~~440,~~208~~943	)		-		-		(2,~~588~~440,~~208~~943	)
Professional and contractor fees		(~~278~~436,~~573~~684	)		-		-		(~~278~~436,~~573~~684	)
Other segment expenses (1)		(1,~~348~~921,~~671~~130	)		-		-		(1,~~348~~921,~~671~~130	)
Income (loss) from operations before provision for income tax	$	12,~~240~~200,~~744~~194		$	-	$	-	$	12,~~240~~200,~~744~~194

	(1)	Includes other selling, general, and administrative expenses such as occupancy expenses, maintenance expense, utilities, depreciation and amortization expenses. Starting in the second quarter of 2026, other segment items also include warrant issuance costs, insurance fees and advisory fees.
	(2)	As noted in Note 1, Nature of Operations, On June 6, 2025 (the “Closing Date”), CEA industries Inc. completed the acquisition of the Fat Panda Group of Companies (“Fat Panda”) (the “Fat Panda Acquisition”). CEA Industries Inc. has been designated as the accounting acquirer (“Successor”), and Fat Panda as the accounting predecessor (“Predecessor”). Successor refers to CEA operations post-acquisition while predecessor refers to CEA operations pre-acquisition date consistent with the Consolidated Statements of Operations.

(1)

Includes other selling, general, and administrative expenses such as occupancy expenses, maintenance expenses, utilities, depreciation and amortization expenses. Starting in the second quarter of 2026, other segment items also include warrant issuance costs, insurance fees and advisory fees.

Note 20 – Subsequent Events

OnIn accordance ~~December~~with 3ASC 855, ~~2025~~Subsequent Events, the Company ~~repaid~~has inevaluated ~~full~~all ~~the~~subsequent ~~$4,000,000~~events ~~interim loan~~through ~~facility~~the ~~with~~date ~~CEAD~~of ~~Panda~~issuance ~~Lender~~of ~~LLC,~~these ~~which~~financial statements ~~was~~issued. ~~entered~~No ~~into~~material insubsequent ~~connection~~events ~~with~~occurred ~~the~~after ~~acquisition~~January ~~of Fat Panda Inc. on June 6~~31, ~~2025~~2026.

During November 2025, subsequent to the Company’s fiscal quarter ended October 31, 2025, the Company repurchased 1.278 million shares of its common stock at a weighted-average price of $5.36 per share. The aggregate purchase price for these shares was approximately $6.85 million. The repurchases were made under the Company’s authorized share repurchase program and were funded through available cash resources.27

In accordance with ASC 855, Subsequent Events, the Company has evaluated all subsequent events through the date of issuance of these financial statements issued. Other than the repayment noted above, no material subsequent events occurred after October 31, 2025.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Non-GAAP Financial Measures

To supplement our financial results on U.S. generally accepted accounting principles (“GAAP”) basis, we use non-GAAP measures including net bookings, backlog, as well as adjusted net income (loss) which reflects adjustments for certain non-cash expenses such as stock-based compensation, ~~certain~~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~~ 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~~ our business. For purposes of this Quarterly Report, (i) “adjusted net income (loss)” and “adjusted operating income (loss)” mean GAAP net income (loss) and operating income (loss), respectively, after adjustment for non-cash equity compensation expense, unrealized loss on digital assets, airdrop income, certain debt-related items and depreciation & amortization expense, and (ii) “net bookings” means new sales contracts executed during the quarter for which we received an initial deposit, net of any adjustments including cancellations and change orders during the quarter.

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

Overview

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~~Binance ~~Chain~~ blockchain. Through its wholly owned subsidiary, ~~BNB~~CEA BRS ~~Network~~LLC, ~~Company~~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 ~~the~~a ~~largest~~substantial corporate treasury of BNB, providing institutional-grade exposure to blockchain infrastructure ~~and decentralized finance (DeFi)~~.

~~The~~Overview 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.~~Strategy

ToThe ~~support~~Company ~~this~~has ~~strategy,~~recently ~~the~~implemented ~~Company~~a ~~established~~treasury ~~CEA~~strategy ~~BRS~~focused ~~LLC,~~on aacquiring ~~Delaware~~and ~~limited~~holding ~~liability~~digital ~~company~~assets, asprimarily aBNB. ~~special~~As ~~purpose~~of ~~entity~~January ~~to hold~~31, ~~and~~2026, ~~manage~~the ~~certain~~Company ~~cryptocurrency~~held ~~assets~~515,544 inBNB ~~accordance~~tokens with ~~the~~an ~~DAT~~aggregate ~~strategy~~fair value of $402.8 ~~Additionally,~~million. ~~the~~These ~~Company~~digital ~~formed~~asset ~~BNB~~holdings represent ~~Network~~the ~~Company~~substantial ~~(BNC) and~~majority ~~BNB~~of ~~Cayman~~the ~~Sponsor,~~Company’s antotal ~~exempted~~assets. ~~company~~Management ~~organized~~views ~~under~~BNB ~~the~~as ~~laws~~a ofstrategic ~~the~~treasury ~~Cayman~~asset ~~Islands,~~and intends to ~~facilitate~~continue ~~international~~evaluating ~~operations~~opportunities ~~and treasury~~to ~~management.~~acquire ~~These~~additional ~~entities~~digital ~~are~~assets ~~wholly~~as ~~owned~~part ~~subsidiaries~~ of ~~the~~its ~~Company~~capital allocation strategy.

29The 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.

~~In connection~~The ~~with~~Company ~~this~~may ~~strategic~~in ~~shift,~~ the ~~Company~~future generate ~~changed~~returns ~~its~~through ~~Nasdaq~~additional ~~ticker~~digital ~~symbol~~asset-related ~~from~~activities ~~“VAPE”~~such toas ~~“BNC”~~validation ~~on August 6~~services, ~~2025~~lending, ~~reflecting~~and ~~its~~other ~~new~~decentralized finance ~~identity~~protocols, asthough ~~the~~no BNB ~~Network~~is ~~Company~~currently staked or pledged. The Company’s ~~continues~~BNB-focused toDAT ~~operate~~strategy ~~its~~was ~~legacy~~launched ~~business~~on ~~while~~August 5, ~~building~~2025, ~~out~~following ~~its~~the ~~digital~~closing ~~asset~~of ~~treasury~~the ~~platform, which~~PIPE isTransaction ~~reflected~~that inraised ~~financial~~approximately ~~results~~$500 ~~beginning~~million in ~~the~~cash ~~second~~and ~~fiscal~~digital ~~quarter~~assets, ~~ending~~with ~~October~~up to 31$750 million in additional proceeds available through warrant exercises. Under the DAT strategy, ~~2025~~BNB is the primary treasury reserve asset.

~~Additionally,~~To onsupport ~~June~~this 6strategy, ~~2025,~~ the Company ~~completed~~established ~~the~~CEA ~~acquisition~~BRS ofLLC, ~~Fat~~a ~~Panda~~Delaware ~~Ltd.~~limited ~~and~~liability ~~related~~company, ~~entities~~as ~~(“Fat~~a ~~Panda),~~special ~~central~~purpose ~~Canada’s largest~~entity ~~retailer~~to hold and ~~manufacturer~~manage ofcertain ~~e-cigarettes,~~cryptocurrency ~~vape~~assets ~~devices~~in ~~and~~accordance ~~e-liquids.~~with ~~This~~the ~~acquisition~~DAT ~~aligns~~strategy. ~~with~~Additionally, the Company’s ~~strategy to~~formed ~~focus~~BNC onBNB ~~high-growth~~Cayman, ~~regulated~~an ~~consumer~~exempted company ~~markets~~organized ~~and~~under ~~provides~~the alaws ~~vertically~~of ~~integrated~~the ~~infrastructure~~Cayman Islands, to ~~support~~facilitate ~~retail~~international ~~expansion~~operations and treasury management. These entities ~~e-commerce~~are ~~capabilities~~wholly owned subsidiaries of the Company.

~~Fat~~The ~~Panda~~Company’s ~~operates~~BNB 33holdings ~~retail~~are ~~locations~~held in custody through Ceffu, ~~including~~an 29institutional ~~Fat~~digital ~~Panda~~asset ~~branded~~custody ~~stores~~platform ~~and~~operating ~~four~~within ~~Electric~~the ~~Fog~~Binance ~~branded~~ecosystem. Ceffu utilizes multi-party computation ~~vape~~ ~~outlets,~~wallet ininfrastructure ~~the~~and ~~provinces~~maintains ofsegregated ~~Manitoba,~~account ~~Ontario~~structures ~~and~~designed ~~Saskatchewan~~for institutional holders. ~~Fat~~While ~~Panda~~Ceffu ~~also~~operates ~~serves~~as a separate ~~wide~~entity ~~range~~from ofthe ~~customers~~Binance ~~through its~~exchange, ~~online~~our ~~e-commerce~~custody ~~platform.~~arrangement ~~Its~~creates ~~retail~~concentration ~~footprint~~exposure isto ~~complemented~~the bybroader aBinance ~~comprehensive~~ecosystem. ~~portfolio~~Disruptions to ofCeffu’s ~~products~~operations, ~~including~~changes in its ~~own line~~regulatory ofstatus, ~~premium~~or ~~e-liquids~~adverse ~~manufactured~~developments ~~in-house,~~affecting ~~along~~the ~~with~~Binance aecosystem ~~robust~~could ~~portfolio~~materially ofimpact our ~~trademarks~~ability ~~and~~to ~~intellectual~~access, ~~property~~transfer, or liquidate our BNB holdings.

~~Fat~~As ~~Panda~~a ~~Group~~result of ~~Companies~~the ~~incorporated~~implementation ~~and~~of ~~commenced~~our ~~active~~BNB ~~operations~~focused onDAT ~~June~~strategy, 1digital assets, ~~2014~~primarily ~~and~~BNB, ~~its~~now ~~principal~~represent ~~business~~93.7% ~~activities~~of ~~include~~our ~~the~~total ~~manufacture~~assets, ~~distribution~~while ~~and~~our ~~sale~~Retail ofand ~~vaping~~Industry ~~products~~segment ~~and~~operating ~~accessories.~~businesses ~~The~~represent ~~Companies~~a ~~own~~significantly ~~and~~smaller ~~operate~~portion ~~retail~~of ~~locations~~our inoverall ~~Manitoba, Saskatchewan~~asset ~~and~~base ~~Ontario.~~on ~~These~~economic ~~locations have the following retail stores~~exposure.

●Key Drivers ~~Saskatchewan:~~of inResults ~~2024,~~of ~~7 locations, and 5 in 2025,~~Operations

●The ~~Manitoba~~Company’s results of operations are influenced by several key factors, including: 20changes in ~~both~~the ~~years,~~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.

~~● Ontario: 8 in 2024, 9 in 2025.~~28

~~The~~ During the period from October 31, 2025 to January 31, 2026, the Company’s BNB ~~also~~token ~~continues~~holdings increased modestly by 0.7%, from 511,932 tokens to ~~provide~~515,544 ~~climate~~tokens, ~~control~~reflecting ~~systems~~incremental ~~for~~change ~~the~~of ~~controlled~~3,612 ~~environment~~tokens ~~agriculture~~in ~~(“CEA”)~~holdings ~~industry~~during the period. ~~CEA~~During this same period, the market price of BNB declined significantly ~~growers~~by 28.3%, ~~currently~~from $1,089 ~~face~~per token, to $781 per token. As a ~~challenging~~result, ~~business~~the ~~environment~~aggregate ~~that~~fair ~~includes~~value ~~high~~of ~~energy~~the ~~costs,~~Company’s ~~water~~BNB ~~usage~~holdings ~~and~~decreased ~~conservation~~from ~~issues~~$557.4 million to $402.8 million, ~~continuously~~driven by market price volatility rather than changes in the token quantity. The decline in BNB ~~evolving~~market ~~waste~~prices ~~removal~~had ~~regulations,~~a ~~inflationary~~materially ~~pressures,~~greater impact on the carrying value of digital assets than the operating results of the Company’s retail and ~~labor~~industry ~~shortages~~business during the same period.

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

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

Digital Asset Market Conditions

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

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

Our Retail & Industry Business

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

Recent Developments

~~Changes~~ Subsequent to ~~United~~the ~~States~~quarter ~~tariff~~end, ~~and~~the ~~import/export~~Board ~~regulations~~of ~~may~~Directors has ~~have~~taken asteps ~~material~~to ~~adverse~~reconstitute ~~effect~~all onfour ~~our~~of ~~business~~its standing committees – the Audit, ~~financial~~Compensation, ~~condition~~Nominating and ~~results~~Governance, and Strategic ofCommittees ~~operations~~- 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.

~~The United~~As ~~States~~a ~~has~~result ~~recently~~of ~~enacted~~these ~~and~~governance ~~proposed~~enhancements ~~to enact significant new tariffs. Additionally, President Trump has directed various~~and ~~federal~~with ~~agencies~~the totermination ~~further evaluate key aspects~~ of ~~U.S.~~an ~~trade~~agreement ~~policy~~between ~~and~~10X ~~there~~Capital ~~has~~Partners ~~been~~LLC ~~ongoing~~(“10X ~~discussion~~Capital Partners”) and ~~commentary~~YZi ~~regarding potential~~Labs ~~significant changes to U~~Management Ltd.S. ~~trade~~(“YZi ~~policies~~Labs”), ~~treaties and tariffs. There continues to exist significant uncertainty about~~ the ~~future~~ ~~relationship~~Company, ~~between~~through the ~~U.S.~~Strategic ~~and~~Committee, ~~other~~is ~~countries~~currently ~~with~~engaged ~~respect~~in tothe ~~such~~process ~~trade~~of ~~policies, treaties and tariffs. These developments,~~renegotiating or the ~~perception~~terms ~~that any~~ of ~~them~~the ~~could~~Company’s ~~occur,~~Asset ~~may~~Management ~~have~~Agreement awith ~~material~~10X ~~adverse~~Capital ~~effect~~Partners on(the ~~global~~“AMA”) ~~economic~~with ~~conditions and~~ the ~~stability~~goal of ~~global~~achieving ~~financial~~market ~~markets,~~standard ~~and~~arms-length ~~may~~terms, ~~significantly~~including ~~reduce~~reduced ~~global~~management ~~trade and~~fees, infor ~~particular, trade between~~ the ~~impacted~~benefit ~~nations~~of ~~and~~all ~~the U~~shareholders.~~S. Any~~ ofThe ~~these~~Company believes ~~factors~~that ~~could~~amending ~~depress~~the ~~economic~~AMA ~~activity and restrict our access~~ to ~~suppliers~~better oralign ~~customers~~its ~~and~~terms ~~have~~with athe ~~material~~Company’s ~~adverse~~current ~~effect on~~scale ~~our business, financial condition~~ and ~~results~~asset ofprofile ~~operations.~~is Asin the ~~Peoples~~best ~~Republic~~interest of ~~China (“PRC”) is a particular~~ ~~focus of the tariffs and trade policies~~shareholders, and ~~the~~is ~~Company~~committed ~~uses~~to ~~products~~completing ~~from~~this ~~the~~process ~~PRC~~ in ~~its~~an ~~product~~expeditious ~~offerings,~~manner. weThere ~~expect~~can ~~that there will~~ be ~~disruption~~no inassurance, ~~that aspect of our business. We are in the process of searching for alternative suppliers~~however, ~~but~~that ~~there is no assurance~~the ~~that~~renegotiation we will be ~~able~~completed toon ~~find~~terms ~~other~~acceptable ~~suppliers~~to atthe ~~a price that will be reasonable~~Company.

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

Results of Operations

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

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

	Successor			Predecessor
	Three months ended January 31,			Three months ended January 31,		Increase (Decrease) ($)			Percentage Change
	2026			2025

Revenue	$	7,334,626		$	6,908,817	$	425,809			6	%

Cost of revenue		5,571,329			5,146,901		(424,428	)		-8	%

Gross profit		1,763,297			1,761,916		1,381			0	%

Operating expenses
Advertising and marketing expenses		284,366			191,531		(92,835	)		-48	%
Unrealized loss on digital assets		159,791,308			-		(159,791,308	)		100	%
Selling, general and administrative expenses		5,997,657			612,731		(5,384,926	)		-879	%
Total operating expenses		166,073,331			804,262		(165,269,069	)		-20549	%

Operating income (loss)		(164,310,034	)		957,654		(165,267,688	)		-17258	%

Other income (expense), net
Airdrop income		1,265,452			-		1,265,452			100	%
Gain on change in fair value of warrant liability		38,061,767			-		38,061,767			100	%
Interest expense		(158,330	)		-		(158,330	)		100	%
Other income (expense), net		176,792			-		176,792			100	%
Total other income		39,345,681			-		39,345,681			100	%

Income/ (loss) before income tax expense (benefit)		(124,964,353	)		957,654		(125,922,007	)		-13149	%

Income tax expense (benefit)		(18,392,213	)		184,337		(18,576,550	)		0	%

Net Income (Loss)	$	(106,572,140	)	$	773,317	$	(107,345,457	)		-13881	%

Revenues and Cost of revenue

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

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

Total operating expenses

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

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

~~Our~~SG&A expenses increased primarily due to ~~Bookings~~$2.0 million of asset management fees and a $4.7 million increase in professional and advisory fees, ~~Backlog~~which was offset by $2.7 million net decrease in compensation expense. The increase in professional and ~~Revenue~~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 ~~Successor~~compensation expenses as described in Note 2 – Correction of Error – RUS Compensation.

WeIn ~~generate~~addition, ~~backlog~~the ~~through~~Company incurred significant costs ~~our~~as ~~Retail~~a ~~and~~direct ~~Industry~~result ~~segment~~of the shareholder activism campaign initiated by YZi Labs during the quarter ended January 31, 2026. ~~During~~In connection with YZi Labs’ filing of preliminary consent solicitation materials seeking to expand the ~~period~~size ~~from~~of the Board of Directors and elect ~~June~~its 7,own ~~2025~~slate ~~through~~of ~~October~~director 31candidates, ~~2025,~~and weits ~~executed~~stated ~~new~~intent ~~sales~~to ~~contracts~~nominate ~~with~~candidates aat ~~total~~the ~~contract~~Company’s ~~value~~next annual meeting of ~~$587~~stockholders,~~000~~ the Company engaged legal, strategic, and communications advisors across multiple disciplines, resulting in $3.1 ~~During~~million ~~this~~in incremental ~~same~~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, ~~there~~which ~~were~~could noadversely ~~change~~affect ~~orders~~the orCompany’s ~~cancellations~~results of operations. ~~Consequently,~~The ~~our~~Company ~~net~~expects ~~bookings~~these activism-related ~~were~~costs ~~$587,000,~~to ~~representing~~remain elevated in the near term in connection with these matters. For a ~~decrease~~more detailed discussion of the risks ~~$502~~associated with YZi Labs’ activist campaign,~~000~~ ~~(or~~including ~~24%)~~the ~~from~~potential ~~net~~impact ~~bookings~~on ofthe ~~$85~~Company’s business,~~000~~ ~~for~~operations, ~~the~~and ~~May~~stock 1price, ~~2025~~see Part ~~through~~II, ~~June~~Item 61A, ~~2025~~“Risk ~~period~~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”.

~~Our backlog~~Other atincome ~~October 31~~(expense), 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.net

The ~~following~~ ~~table~~Company ~~sets~~recognized ~~forth:~~other ~~(i)~~income ~~our~~of ~~beginning~~$39.3 ~~backlog~~million (for the three ~~remaining~~months ~~contract~~ended ~~value~~January of31, ~~outstanding~~2026, ~~sales~~compared ~~contracts~~to $0 for ~~which~~the wethree ~~have received~~months anended ~~initial~~January ~~deposit as of the previous period)~~31, ~~(ii)~~2025. ~~our~~Other ~~net~~Income ~~bookings~~ for the current period ~~(new~~consisted of ~~sales~~gain ~~contracts~~on ~~executed~~change ~~during~~in ~~the period~~fair ~~for~~value ~~which~~of wewarrant ~~received~~liability anof ~~initial~~$38.1 ~~deposit~~million, ~~net~~currency oftranslation ~~any~~and ~~adjustments~~interest ~~including~~expense ~~cancellations~~on ~~and~~promissory ~~change~~notes ~~orders~~related to ~~during~~ the ~~period),~~Acquisition and airdrop income.

~~(iii) our~~The ~~recognized~~Company ~~revenue~~holds ~~for~~the majority of its BNB tokens with Ceffu, an institutional custodian operating within the ~~period~~Binance ecosystem, ~~and~~which ~~(iv)~~enables ~~our~~the ~~ending~~Company ~~backlog~~to maintain eligibility for ~~the~~airdrops ~~period~~distributed ~~(the~~within ~~sum~~Binance ofecosystem. During the ~~beginning~~three ~~backlog~~months ended ~~and~~January ~~net~~31, ~~bookings~~2026, ~~less~~ the Company recognized ~~revenue)~~$1.3 ~~Based~~million onof ~~the~~airdrop ~~current~~income, ~~economic~~compared ~~climate~~to ~~and~~$5.8 ~~our~~million ~~cost-cutting~~recognized ~~measures~~during the three months ended October 31, ~~there~~2025. isThis nodecline ~~assurance~~reflects ~~that~~reduced weairdrop ~~will~~activity ~~be able~~within tothe ~~continue~~Binance toecosystem ~~obtain~~during the ~~level~~current ofperiod, ~~bookings~~which ~~that~~contributed to welower ~~have~~non-operating ~~had~~income. inThe ~~the~~Company ~~past~~cannot ~~and~~predict the timing or ~~fulfil~~magnitude ~~our~~of ~~current~~future ~~backlog~~airdrops, and wecontinued ~~may~~reduction ~~experience~~in airdrop ~~contract~~frequency ~~cancellations,~~or ~~project~~size ~~scope~~could ~~reductions~~have ~~and~~an ~~project~~adverse ~~delays~~effect on our results of operations.

	Successor
	For the Period 06/07/2025-10/31/2025
Backlog, beginning balance	$	726,000
Net bookings, current period		587,000
Recognized revenue, current period		(411,000	)
Backlog, ending balance	$	902,000

Non-GAAP Combined Nine Months Ended January 31, 2026

~~The completion~~Our offinancial aresults ~~customer’s~~for ~~new~~the ~~build~~periods ~~facility~~from ~~project~~May is1, 2025 ~~dependent~~through ~~upon~~June 6, 2025, and the ~~customer’s~~nine ~~ability~~months ended January 31, 2025 are referred to ~~secure~~as ~~funding~~those ~~and~~of ~~real~~the “Predecessor” period. ~~estate,~~Our ~~obtain~~financial aresults ~~license~~for ~~and~~the ~~then~~period ~~build~~from ~~their~~June ~~cultivation~~7, ~~facility~~2025, sothrough ~~they~~January ~~can~~31, ~~take~~2026 ~~possession~~are referred to as those of the ~~equipment~~“Successor” period. ~~Accordingly,~~Our ~~the~~results ~~time~~of operations as reported in our Condensed Consolidated Financial Statements and Condensed Consolidated Statements itof ~~takes~~Operations and Comprehensive Income (Loss) for these ~~customers~~periods toare ~~complete~~prepared ain ~~new~~accordance ~~build~~with ~~project,~~U.S. ~~which~~GAAP. ~~corresponds~~Although toU.S. ~~when~~GAAP requires that we ~~are~~report ~~able~~our toresults ~~recognize~~for ~~revenue~~the period from May 1, is2025 ~~driven~~through byJune 6, 2025 and the period from June 7, 2025 through January 31, 2026 ~~numerous~~separately, ~~factors~~management ~~including:~~views ~~(i)~~our operating results for the ~~large~~nine ~~number~~months ended January 31, 2026 by combining the results of ~~first-time~~the ~~participants~~applicable Predecessor ~~interested~~and inSuccessor periods because such presentation provides the ~~indoor~~most ~~cultivation~~meaningful ~~business;~~comparison ~~(ii)~~of our results to prior periods. We believe we cannot adequately benchmark the ~~complexities~~operating results of the period from June 7, 2025 through January 31, 2026 against any of the ~~and~~previous ~~uncertainties~~periods ~~involved~~reported in ~~obtaining~~our ~~state~~Condensed Consolidated Financial Statements and ~~local~~Condensed ~~licensure~~Consolidated Statements of Operations and ~~permitting;~~Comprehensive Income (~~iii~~Loss) ~~local~~without ~~and~~combining ~~state~~it ~~government~~with ~~delays~~the inperiod ~~approving licenses~~from May 1, 2025 through June 6, 2025, and ~~permits~~do ~~due~~not tobelieve ~~lack~~that reviewing the results of ~~staff~~this orperiod ~~the~~in ~~large~~isolation ~~number~~would ofbe ~~pending~~useful ~~applications,~~in ~~especially~~identifying trends in ~~states~~or ~~where~~reaching ~~there~~conclusions isregarding noour ~~cap~~overall onoperating performance. Management believes that the ~~number~~key ofperformance ~~cultivators;~~metrics ~~(iv)~~for the ~~customer’s~~Successor ~~need~~period when combined with the Predecessor period provide more meaningful comparisons to ~~obtain~~other ~~cultivation~~periods ~~facility~~and ~~financing;~~are ~~(v)~~useful ~~the~~in ~~time~~identifying ~~needed~~current business trends. Accordingly, ~~and~~in ~~coordination~~addition to presenting our results ~~required,~~of ~~for~~operations as reported in our ~~customers~~Condensed toConsolidated ~~acquire~~Financial ~~real~~Statements ~~estate~~in ~~and~~accordance ~~properly~~with ~~design~~U.S. GAAP, the tables and ~~build~~discussion below also present the ~~facility~~combined ~~(to~~results for the ~~stage~~nine ~~when~~months ~~climate~~ended ~~control~~January ~~systems can~~31, be2026. ~~installed);~~The ~~(vi)~~combined results for the ~~large~~nine ~~price~~months ~~tag~~ended ~~and~~January ~~technical~~31, 2026, ~~complexities~~represent the sum of the ~~climate~~reported ~~control~~amounts for the Predecessor period from May 1, 2025 through June 6, 2025 and ~~air~~the ~~sanitation~~Successor ~~systems;~~period from ~~(vii)~~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 ~~availability~~actual results we would have achieved absent our acquisition of ~~power;~~Fat Panda and are not necessarily indicative of future results. Accordingly, the results for the combined nine months ended January 31, 2026 (~~viii~~prepared on a non-GAAP basis) ~~delays~~and ~~that~~nine ~~are~~months ~~typical~~ended inJanuary ~~completing~~31, ~~any~~2025 ~~construction~~(prepared ~~project~~on a GAAP basis) may not be comparable.

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.

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 the Revenue Recognition section of Note 9 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.

~~Our~~Comparison ~~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~~Nine ~~entirely.~~Months ~~Accordingly,~~Ended ~~there~~January 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 measures31, ~~and therefore~~2026, ~~they should be considered in addition to, rather than as a substitute for, our GAAP measures for recognized revenue, deferred revenue,~~ and ~~remaining~~January ~~performance obligations. Further~~31, ~~we can provide no assurance as to the profitability of our contracts reflected in remaining performance obligations, backlog and net bookings.~~2025

Results of Operations

	Successor			Predecessor		Non-GAAP Combined			Predecessor
	Period from June 7, 2025 through January 31,			Period from May 1 through June 6,		Nine months ended January 31,			Nine months ended January 31,		Increase (Decrease) ($)			Percentage Change
	2026			2025		2026			2025

Revenue	$	19,055,752		$	2,927,689	$	21,983,441		$	21,313,671	$	669,770			3	%

Cost of revenue		13,827,593			2,001,537		15,829,130			13,824,712		(2,004,418	)		-14	%

Gross profit		5,228,159			926,152		6,154,311			7,488,959		(1,334,648	)		-18	%
-
Operating expenses
Advertising and marketing expenses		5,010,953			63,202		5,074,155			490,008		(4,584,147	)		-936	%
Unrealized loss on digital assets		45,757,590			-		45,757,590			-		(45,757,590	)		100	%
Selling, general and administrative expenses		34,599,188			842,348		35,441,536			4,798,756		(30,642,780	)		-639	%
Total operating expenses		85,367,731			905,550		86,273,281			5,288,764		(80,984,517	)		-1531	%

Operating income (loss)		(80,139,572	)		20,602		(80,118,970	)		2,200,195		(82,319,165	)		-3741	%
-
Other income (expense), net
Airdrop income		7,093,030			-		7,093,030			-		7,093,030			100	%
Gain on change in fair value of warrant liability		244,879,854			-		244,879,854			-		244,879,854			100	%
Interest expense		(822,607	)		-		(822,607	)		-		(822,607	)		100	%
Other income (expense), net		(80,223	)		-		(80,223	)		-		(80,223	)		100	%
Total other income		251,070,054			-		251,070,054			-		251,070,054			100	%
-
Income/ (loss) before income tax expense (benefit)		170,930,482			20,602		170,951,084			2,200,195		168,750,889			7670	%
-
Income tax expense (benefit)		(291,754	)		1,589		(290,165	)		426,838		(717,003	)		-168	%
-
Net Income (Loss)	$	171,222,236		$	19,013	$	171,241,249		$	1,773,357	$	169,467,892			9556	%

~~Comparison~~Revenues ~~of the Three Months Ended October 31, 2025~~ and ~~October~~Cost ~~31,~~of ~~2024~~revenue

	Successor			Predecessor
	Three months ended October 31,			Three months ended October 31,		Favourable (Unfavourable) ($)			Percentage Change
	2025			2024
Revenue	$	7,143,485		$	7,436,751	$	(293,266	)		-4	%
Cost of Revenue		5,050,228			4,591,637		(458,591	)		-10	%
Gross profit		2,093,257			2,845,114		(751,857	)		-26	%
Operating (income) expenses :
Advertising and marketing expenses		4,655,063			184,013		(4,471,050	)		-2430	%
Unrealized (gain)/loss on digital assets		(114,033,718	)		-		114,033,718			100	%
Selling, general and administrative expenses		21,666,564			2,284,433		(19,382,131	)		-848	%
Total operating (income) expenses		(87,712,091	)		2,468,446		90,180,537			3653	%
Operating Income (Loss)		89,805,348			376,668		89,428,680			23742	%
Other income (expense), net
Airdrop income		5,827,578			-		5,827,578			100	%
Gain on change in fair value of warrant liability		206,818,087			-		206,818,087			100	%
Interest expense/amortization of debt discount		(392,228	)		-		(392,228	)		100	%
Other income (expense), net		(254,515	)		-		(254,515	)		100	%
Total Other Income/(Expense)		211,998,922			-		211,998,922			100	%
Income before provision for income taxes		301,804,270			376,668		301,427,602			80025	%
Provision for income taxes		18,161,497			85,051		18,076,446			21254	%
Net income (Loss)	$	283,642,773		$	291,617	$	283,351,156			97165	%

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

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

Total operating expenses

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

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

~~Revenues~~The increase in SG&A was mainly attributable to a one-time warrant ~~and~~issuance ~~Cost~~cost of ~~Goods~~$14.6 ~~Sold~~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.

~~Revenue~~Other ~~for~~income ~~the three months ended October 31~~(expense), 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.net

~~Cost~~We ofrecognized ~~revenue~~other ~~increased~~income byof $~~458,591~~251.1 ormillion ~~10%, from $4,591,637~~ for the ~~three~~nine months ended ~~October~~January 31, ~~2024~~2026, compared to $~~5,050,228~~0 for the ~~three~~ nine months ended ~~October~~ January 31, 2025. ~~The~~Other ~~increase~~Income ~~was~~for ~~primarily~~the ~~due~~current toperiod ~~higher~~consisted ~~material~~of ~~costs~~airdrop ~~due~~income, togain anon ~~increase~~change in ~~the~~fair ~~cost~~value ~~per~~of ~~unit~~warrant ~~of many~~liability, ~~products~~and ~~for~~interest and ~~the~~debt ~~newly~~discount ~~enacted~~amortization ~~federal~~on ~~and~~notes ~~provincial~~related ~~excise~~to ~~taxes~~the Acquisition.

Total Operating Income (Expenses)

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%.

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.

Other Income (Expense)

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.

Non-GAAP Combined Six Months Ended October 31, 2025

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.

Comparison of the Six Months Ended October 31, 2025 and October 31, 2024

	Successor			Predecessor		Non-GAAP Combined			Predecessor
	Period from June 7 through October 31, 2025			Period from May 1 through June 6,		Six months ended October 31,			Six months ended October 31,		Favourable (Unfavourable) ($)			Percentage Change
	2025			2025		2025			2024
Revenue	$	11,720,973		$	2,927,689	$	14,648,662		$	14,405,418	$	243,244			2	%
Cost of Revenue		8,256,041			2,001,537		10,257,578			8,652,017		(1,605,561	)		-19	%
Gross profit		3,464,932			926,152		4,391,084			5,753,401		(1,362,317	)		-24	%
Operating (income) expenses:
Advertising and marketing expenses		4,726,687			63,202		4,789,889			297,205		(4,492,684	)		-1512	%
Product development costs		-			-		-			-		-			-
Unrealized (gain)/loss on digital assets		(114,033,718	)		-		(114,033,718	)		-		114,033,718			100	%
Selling, general and administrative expenses		28,604,021			842,348		29,446,369			4,215,452		(25,230,917	)		-599	%
Total operating expenses / (income)		(80,703,010	)		905,550		(79,797,460	)		4,512,657		84,310,117			1868	%
		-			-		-			-
Operating Income (Loss)		84,167,942			20,602		84,188,544			1,240,744		82,947,800			6685	%
Other income (expense), net
Airdrop income		5,827,578			-		5,827,578			-		5,827,578			100	%
Gain on change in fair value of warrant liability		206,818,087			-		206,818,087			-		206,818,087			100	%
Interest expense/amortization of debt discount		(664,257	)		-		(664,257	)		-		(664,257	)		100	%
Other income (expense), net		(254,513	)		-		(254,513	)		-		(254,513	)		100	%
Total Other Income/(Expense)		211,726,895			-		211,726,895			-		211,726,895			100	%
Income before provision for income taxes		295,894,837			20,602		295,915,439			1,240,744		294,674,695			23750	%
Provision for income taxes		18,100,461			1,589		18,102,050			240,704		17,861,346			7420	%
Net income (Loss)	$	277,794,376		$	19,013	$	277,813,389		$	1,000,040	$	276,813,349			27680	%

Revenues and Cost of Goods Sold

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.

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.

Total Operating (Income) Expenses

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.

Other Income (Expense)

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.

Financial Condition, Liquidity and Capital Resources

Our primary sources of liquidity include cash and cash equivalents, and, beginning in August 2025, digital assets held in our treasury. As of ~~October~~January 31, ~~2025~~2026, we had cash and cash equivalents of $3611.63 million, and digital assets measured at fair value of $~~547~~409.12 million ~~and a digital asset receivable of $16.8 million~~, as presented in our condensed consolidated unaudited balance sheets. We did not have any borrowings outstanding under a credit facility as of ~~October~~January 31, ~~2025~~2026.

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

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

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

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

Digital Asset Treasury Risk Management

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

Summary of Cash Flows

The following summarizes our approximate cash flows for the period from June 7, 2025 through ~~October~~January 31, ~~2025~~2026 (Successor), for the period May 1, 2025 through ~~Jun~~June 6, 2025 (Predecessor) and for the ~~six~~nine months ended ~~October~~January 31, ~~2024~~2025 (Predecessor):

	Successor			Predecessor
	Period from June 7 through October 31,			Period from May 1 through June 6,			For Six Months Ended October 31,
	Period from June 7 through January 31,			Period from May 1 through June 6,			For nine Months Ended January 31,
	2025			2025			2024
	2026			2025			2025
Net cash provided by (used in) operating activities	$	(24,114,556	)	$	(238,000	)	$	267,803
Net cash used in operating activities	$	(32,107,342	)	$	(238,442	)	$	(306,009	)
Net cash used in investing activities		(185,~~235~~657,~~121~~820	)		~~(2,000~~-	)		(1956,~~749~~153	)
Net cash provided by financing activities		~~230~~217,~~367~~621,~~326~~064			-			-
Net increase / (decrease) in cash	$	21,017,649		$	(240,000	)	$	248,054
Net decrease in Cash and Cash Equivalents	$	(144,098	)	$	(238,442	)	$	(362,162	)

Operating Activities

Cash used in ~~operations~~operating activities for the period from June 7, 2025 through ~~October~~January 31, ~~2025~~2026 (Successor) was $2432.1 million,~~114,556~~ compared to ~~cash~~$0.2 million used induring ~~operations of $238,000 for~~ the period from May 1, 2025 through June 6, 2025 (Predecessor), ~~2025~~ and ~~cash~~$0.3 ~~provided~~million inused ~~operations of $267,803~~ for the ~~six~~nine months ended ~~October~~ January 31, ~~2024~~2025 (Predecessor). ~~The~~Operating ~~increase~~cash inflows ~~cash~~for ~~used~~the inSuccessor ~~operating~~period ~~activities~~were ~~was partially~~significantly ~~offset~~affected by several non-cash items, including an unrealized ~~gains~~loss on digital assets of $45.8 million, a $244.9 million gain onfrom ~~change~~changes in the fair value of warrant ~~liability~~liabilities, and $7.1 million of non-cash income from ~~airdrop~~airdrops. ~~digital~~Depreciation ~~assets,~~and ~~changes~~amortization expense and non-cash fees paid in digital ~~asset~~assets ~~receivables~~also ~~and~~impacted ~~prepaid~~cash ~~expenses~~used in operations.

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

Investing Activities

Cash used in investing activities for the period from June 7, 2025 through ~~October~~January 31, ~~2025~~2026 (Successor) was $185.7 million,~~235,121~~ compared towith no cash used ~~investing~~during ~~activities of $2,000 for~~ the period from May 1, 2025 through June 6, 2025 (Predecessor), ~~2025~~ and $~~19,749~~56 ~~for~~thousand used during the ~~six~~ nine months ended January ~~October~~ 31, ~~2024~~2025 (Predecessor).This ~~The~~outflow ~~increase~~ was ~~the~~primarily ~~result~~driven by $10.4 million of cash consideration paid ~~for~~in ~~the~~connection ~~acquisition~~with ofthe Fat Panda Acquisition and ~~purchase~~the of$175.3 million used to purchase digital assets.

Financing Activities

Cash provided by financing activities for the period from June 7, 2025 through ~~October~~January 31, ~~2025~~2026 (Successor) ~~was~~totaled $~~230,367,326~~217.6 ~~There~~million, ~~were~~compared to no financing cash flows ~~from~~during ~~financing activities for~~ the ~~period~~periods from May 1, 2025 through June 6, 2025 (Predecessor) or ~~for~~ the ~~six~~nine months ended ~~October~~ January 31, 2025 ~~2024~~ (Predecessor). The ~~increase~~primary source of cash was ~~primarily~~$217.5 ~~attributable~~million toof net proceeds from athe ~~note~~issuance ~~payable~~of ~~related~~common tostock ~~the~~and ~~acquisition of~~warrants ~~Fat~~in ~~Panda~~the PIPE offering, ~~proceeds~~which ~~from~~included ~~the~~$9.3 ~~Company’s~~million ~~private~~of ~~placement~~issuance ~~and~~costs ~~prefunded~~related to common stock and warrants in the PIPE offering. In addition, the ~~and~~Company generated $12.9 million of proceeds from ~~the~~sales ~~Company’s~~under the ATM ~~offering~~ ~~and~~program. These inflows were partially offset by $12.7 million in cash used for share repurchases during the period.

Contractual Payment Obligations

As of ~~October~~January 31, ~~2025~~2026, our contractual payment obligations consisted of a building lease. Refer to Note 5 – Leases of the notes to the condensed consolidated financial statements, included as part of this Quarterly Report for a discussion of our building lease.

Commitments and Contingencies

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

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our ~~liquidity~~ 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~~January 31, ~~2025~~2026, we had no off-balance sheet arrangements. During the quarter ended ~~October~~January 31, ~~2025~~2026, we ~~did~~ did not engage in any off-balance sheet financing activities other than those included in the discussed above and those reflected in ~~Note~~ Note 12 – Commitments and Contingencies of our condensed consolidated financial statements.

3534

Known Trends and Uncertainties Affecting Our Business

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

Critical Accounting Estimates

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

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

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

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

Changes in Internal Control over Financial Reporting

There were changes in our internal control over financial reporting during the quarter ended ~~October~~January 31, ~~2025~~ 2026 related to integration of new digital asset treasury processes and valuation controls for warrant liabilities. These changes were part of our remediation plan and did not materially affect, and are not reasonably likely to materially affect, our internal control over financial reporting, except as noted above with respect to the identified material weakness.

36Management has implemented procedures designed to provide reasonable assurance regarding the safeguarding of the Company’s digital assets, including controls governing access to private keys, authorization requirements for digital asset transfers, and oversight of custodial arrangements with third-party service providers.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

~~On October~~From ~~20,~~time ~~2023,~~to ~~Sweet Cut Grow~~time, ~~LLC~~in ~~and~~the ~~Green~~normal ~~Ice,~~course ~~LLC (collectively, “Claimant”) a client~~ of business, the Company ~~with~~is ~~which~~subject ~~it had~~to anclaims ~~equipment contract~~ and ~~engineering~~legal ~~contract,~~proceedings. ~~filed~~Litigation ais ~~demand~~inherently ~~for arbitration asserting claims for breach of contract~~unpredictable, ~~breach of warranty,~~ and ~~unjust~~the ~~enrichment, and a demand for $1,049,280 in damages, plus interest (“Claims”). The~~ Company’s ~~denies~~assessments ~~all~~may ~~the~~change ~~Claims~~as ~~and~~matters ~~has asserted a counterclaim~~progress. The Company ~~believes~~expenses ~~Claimant~~legal isfees ~~owed nothing~~ as ~~the~~incurred ~~Company fulfilled all its obligations under the contracts to Claimant,~~ and ~~further,~~records ~~that~~a ~~the~~liability ~~negligence~~for ofcontingent alosses ~~third-party~~when ~~supplier~~it is ~~the basis of the Claims. We are defending~~both ~~the~~probable ~~Claims on the basis~~ that wea ~~promptly~~loss ~~addressed~~has ~~all~~been ~~problems,~~incurred and ~~that any issues with defective HVAC equipment are~~ the ~~responsibility of~~amount ~~the~~can ~~third-party~~be ~~equipment~~reasonable ~~manufacturer~~estimated. ~~The~~An ~~Company’s~~unfavorable ~~equipment~~outcome ~~contract with Claimant requires the parties~~ to ~~arbitrate~~any ~~their disputes under the rules of the American Arbitration Association (“AAA”). The arbitration will be heard in Denver~~matter, ~~Colorado,~~if ~~with a conditional setting of January 19-22~~material, could ~~2026.~~adversely ~~The~~affect ~~matter is in~~ the ~~discovery phase. The parties will pay their own legal fees and expenses. The~~ Company ~~intends~~’s tofinancial ~~defend itself vigorously~~condition, ~~believing~~liquidity ~~there~~or ~~are~~results noof ~~merits to the Claims as currently presented~~operations.

~~Given~~On February 24, 2026, Abraham Gomez, an individual, ~~the~~filed ~~current~~a ~~uncertainty~~civil ~~around~~complaint ~~estimating~~in the ~~likelihood~~Superior Court of ~~success~~the State of California, County of Tulare, captioned Abraham Gomez v. CEA Industries, Inc., et al., (Case No. VCU331863), against the Company and Hans Thomas, a director of the Company. The complaint asserts various claims against the defendants, including claims for fraud, promissory estoppel, quantum meruit and ~~potential~~unjust enrichment, arising from alleged investment-related discussions and alleged services purportedly performed for the benefit of the Company. The plaintiff seeks damages, weincluding ~~have~~compensatory damages according to proof (which the complaint alleges exceed approximately $2.75 million), together with interest, attorneys’ fees, costs and other relief. As of March 13, 2026, the Company has not ~~recorded~~yet anfiled ~~accrual~~its response to the complaint but intends to defend the action ~~for~~vigorously. ~~any~~At ~~potential~~this preliminary stage of the matter, the Company cannot reasonably estimate the possible loss ~~related~~or torange ~~these~~of ~~matters~~loss, if any, that may result from the proceeding.

On or about April 17, 2024, Optima Consulting Services, LLC (the “Claimant”), a client of the Company ~~with~~under ~~which it had~~ an equipment ~~contract~~ and engineering contract, ~~advised~~notified the Company of a potential claim ~~related to work performed by the Company for Claimant~~ and demanded mediation ~~under the parties’ contract~~. On or about October 28, 2024, Claimant ~~informed~~asserted ~~the Company it was asserting~~ claims for negligent/defective design and breach of warranty, alleging ~~and alleges its~~ damages ~~exceeded~~exceeding $2~~,000,000~~.0 ~~(“Claims”)~~million. The Company denied ~~all~~ the ~~Claims~~claims, ~~and~~believing ~~that~~it ~~Claimant~~satisfied ~~was~~all ~~entitled~~contractual toobligations ~~any~~and ~~damages.~~that ~~The~~any issues ~~Company~~were ~~believed~~attributable ~~the~~to Claimant ~~was~~and/or ~~owed~~third ~~nothing~~parties. asThe ~~the~~matter ~~Company~~was ~~fulfilled all~~mediated ~~its obligations~~ under the ~~contracts~~AAA toprocess. ~~Claimant~~Effective ~~and~~May ~~performed~~9, ~~all~~2025, ~~work~~the inparties entered ~~line~~into ~~with~~a ~~all~~settlement ~~applicable~~agreement ~~standards.~~under ~~The~~which ~~Company believed~~ all ~~work~~claims ~~was~~were ~~performed~~resolved ~~pursuant~~for toa ~~the~~payment ~~contract~~of ~~and~~$0.3 ~~any~~million ~~alleged~~by ~~issues~~the ~~that~~Company. ~~may~~This ~~have~~settlement payment ~~occurred~~was ~~were~~funded by the ~~result~~Company’s ofinsurance ~~actions~~coverage, byexcept ~~Claimant and/or~~for ~~third~~$35 ~~parties.~~thousand ~~The~~representing ~~case~~the ~~was~~deductibles, ~~mediated~~which ~~with~~was paid by the ~~American Arbitration Association (“AAA”)~~Company.

~~Effective May~~On 9October 20, ~~2025~~2023, ~~the~~Sweet ~~Company~~Cut ~~entered~~Grow, ~~into~~LLC aand ~~settlement~~Green Ice, ~~agreement~~LLC ~~whereby~~(collectively, ~~all~~“Claimant”), ~~Claims~~clients byof ~~Optima~~the ~~Consulting~~Company ~~Services,~~under ~~LLC~~an ~~against~~equipment ~~the~~contract ~~Company~~and engineering contract, filed a ~~were~~demand ~~settled~~for inarbitration ~~full~~asserting ~~upon~~claims ~~the~~for ~~payment~~breach of ~~$250~~contract,~~000~~ bybreach ~~the~~of ~~Company~~warranty, toand ~~Optima~~unjust ~~Consulting Services~~enrichment, ~~LLC~~and seeking $1.0 ~~This~~million ~~settlement~~in damages, ~~payment~~plus ~~was~~interest. ~~funded by~~The Company denies the claims and has asserted a counterclaim. The Company’s ~~insurance~~believes ~~coverage,~~it ~~except~~fulfilled ~~for~~all ~~$35,000~~its incontractual obligations ~~deductibles~~and ~~which~~that weany ~~paid~~alleged byissues related to the ~~Company~~negligence ~~itself~~of a third-party supplier.

~~From time~~The toparties ~~time,~~are inrequired ~~the~~to ~~normal~~arbitrate ~~course~~under the rules of ~~its operations,~~ the ~~Company~~American isArbitration ~~subject~~Association ~~to litigation matters and claims~~(“AAA”). ~~Litigation~~The ~~can~~arbitration beis ~~expensive and~~expected ~~disruptive~~ to ~~normal~~be ~~business~~heard ~~operations.~~in ~~Moreover~~Denver, ~~the results of complex legal proceedings are difficult to predict~~Colorado, ~~and~~in ~~the~~2026 ~~Company’s~~unless ~~view~~resolved ofearlier. ~~these~~The ~~matters~~matter ~~may~~is ~~change~~currently in the ~~future~~discovery asphase, ~~the litigation~~ and ~~events~~the ~~related~~parties ~~thereto~~are ~~unfold.~~engaged ~~The~~in ~~Company~~active ~~expenses~~settlement ~~legal~~discussions. Legal fees ~~as incurred.~~will ~~The~~be ~~Company~~borne ~~records~~by aeach ~~liability~~party. ~~for~~In ~~contingent~~light ~~losses~~of ~~when~~ongoing itnegotiations ~~is both probable that a liability has been incurred~~ and the ~~amount~~ likelihood of ~~the loss is known. An unfavourable outcome to any legal matter~~settlement, ifthe ~~material,~~Company ~~could~~has ~~have~~accrued an ~~adverse effect on the Company’s operations~~estimate orof ~~its~~$0.4 ~~financial~~million ~~position,~~to ~~liquidity~~warranty ~~or results of operations~~expense.

Canadian Payroll Taxes

We have estimated approximately $~~200,000~~0.2 million of potential liability~~-based~~ ~~work~~related ~~with~~to ~~the~~ Canadian ~~Revenue~~payroll ~~Agency to remedy a~~ tax ~~issue~~matters for the period ~~spanned from~~ 2020-2025,. ~~other~~Other than this ~~issue~~matter, no ~~other~~additional losses ~~and~~or ~~no other provision~~ provisions for loss contingency have been recorded to date. As discussed in Note 11 Related Party Note Payable and Related Party Convertible Note Payable above, any tax liability assessed in connection with this matter will reduce, on a dollar for dollar basis, the repayment amount of the related vendor note issued to the former owners of Fat Panda.

As discussed in Note 11 Related Party Note Payable and Related Party Convertible Note Payable above, the liability arising in respect of this issue will reduce the amount of the loan repayment to the former owners of Fat Panda will be reduced, dollar for dollar, by the amount of any tax liability assessed.36

~~Item~~ITEM 21A. ~~Unregistered~~RISK ~~Sales of Equity Securities and Use of Proceeds~~FACTORS

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

~~The following table presents~~Risks ~~information~~Related ~~related~~ to ~~our~~Our ~~repurchases~~Digital ofAsset ~~common~~Treasury ~~stock during the second quarter of 2025:~~Strategy

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
8/1/2025 - 8/31/2025		-	$	-		-	$	-
9/1/2025 - 9/30/2025		-	$	-		-	$	-
10/1/2025 - 10/31/2025		529,170	$	8.28		529,170	$	245,614,433
Total		529,170	$	8.28		529,170	$	245,614,433

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

~~(1)~~Our financial Oncondition ~~September~~is ~~22,~~highly ~~2025,~~dependent ~~our~~on ~~Board~~the ofmarket ~~Directors~~price ~~authorized~~of aBNB, ~~stock~~which ~~repurchase~~has ~~plan~~historically ~~authorizing~~been ussubject to ~~repurchase~~significant volatility. As of January 31, ~~from~~2026, ~~time~~we toheld ~~time~~515,544 upBNB totokens ~~$250~~with ~~million~~a offair ~~our~~value ~~outstanding~~of $402.8 ~~common~~million, ~~stock~~representing (the ~~“Repurchase~~substantial ~~Plan”)~~majority of our total assets. As ofa ~~October~~result, 31our financial condition, ~~2025~~results of operations, weand ~~had~~the ~~$245.6~~market ~~million~~price of ~~authorization~~our ~~remaining~~common ~~under~~stock may be materially affected by fluctuations in the ~~Repurchase~~market ~~Plan~~price of BNB. The ~~Repurchase~~price ~~Plan~~of BNB has nohistorically ~~expiration~~experienced significant volatility and ~~will~~may continue to ~~until~~fluctuate ~~otherwise~~substantially ~~modified~~in response to numerous factors, many of which are beyond our control. These factors include, among others: overall cryptocurrency market conditions and investor sentiment; technological developments affecting blockchain networks; regulatory developments in the United States or ~~terminated~~other jurisdictions; changes in trading volumes or liquidity in markets for BNB; macroeconomic factors, including inflation, interest rates and financial market conditions; trading activity by ~~our~~large ~~Board~~holders of ~~Directors~~BNB ator ~~any~~other ~~time~~digital inassets; and ~~its~~market ~~sole~~speculation, ~~discretion~~media coverage, or social media commentary relating to digital assets. AsDigital asset markets may be more volatile and less regulated than traditional financial markets, and prices may fluctuate significantly over short periods of ~~the~~time. ~~date~~Because BNB represents a substantial portion of ~~this~~our ~~filing~~assets, weeven ~~have~~modest ~~repurchased~~declines ~~approximately~~in ~~1.8~~the ~~million~~market ~~shares~~price of ~~common~~BNB ~~stock~~could ~~for~~materially ~~$11~~reduce the value of our assets and stockholders’ equity and may negatively affect our reported financial results.3 ~~million~~In ~~total~~addition, ~~under~~because changes in the fair ~~Repurchase~~value ~~Plan~~of our digital assets are reflected in our statements of operations, fluctuations in the market price of BNB may cause significant volatility in our reported earnings.

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

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

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

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

~~Pursuant~~BNB tooperates on the ~~requirements~~BNB Chain blockchain network, which relies on complex software, cryptographic protocols, and a distributed network of validators ~~Section~~to 13process ortransactions ~~15(d)~~and maintain the integrity of the ~~Securities~~blockchain. ~~Exchange~~The ~~Act~~BNB ofChain ~~1934~~network may be subject to technical failures, software bugs, consensus failures, or other vulnerabilities that could compromise the ~~registrant~~network’s ~~has~~security ~~duly~~or ~~caused~~functionality. ~~this~~In ~~report~~addition, blockchain networks have historically been targets of cyberattacks, including attempts to beexploit ~~signed~~vulnerabilities in network software onor ~~its~~associated ~~behalf~~applications. byAny successful attack or exploit affecting the ~~undersigned~~BNB Chain network could disrupt network operations, ~~thereunto~~reduce confidence ~~duly~~in ~~authorized~~the network, or adversely affect the market price of BNB. Any such developments could materially and adversely affect the value of our digital asset holdings.

	CEA INDUSTRIES INC.
	(the “Registrant”)
Dated: December 15, 2025	By:	/s/ David Namdar
		David Namdar
		Chief Executive Officer
		(Principal Executive Officer)

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

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

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

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

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

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

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

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

~~Item~~BNB 6could be determined to be a security under U.S. ~~Exhibits~~federal securities laws, which could materially affect the value and tradability of our digital assets.

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

Exhibit
Number		Description of Exhibit
1.1		Sales Agreement, dated as of August 25, 2025, by and among the Company and Cantor Fitzgerald & Co. (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed August 25, 2025).
10.1		Asset Management Agreement, dated August 5, 2025, by and between CEA Industries Inc. and 10X Capital Partners LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 8, 2025).
10.2		Strategic Advisor Agreement, dated August 5, 2025, by and between CEA Industries Inc. and 10X BNB Cayman Sponsor. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 8, 2025).
10.3		Strategic Advisor Agreement, dated August 5, 2025, by and between CEA Industries Inc. and YZi Management Labs Ltd. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed August 8, 2025).
10.4		Form of Amendment No. 1 to the Registration Rights Agreement, dated September 3, 2025 (incorporated by reference to Exhibit 10.3.1 to the Company’s Current Report on Form 8-K filed September 9, 2025).
10.5		Open Market Share Repurchase Agreement, dated September 22, 2025 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 25, 2025).
10.6 *		Non-Employee Director Compensation Policy.
31.1 *		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 *		Certification of Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Schema
101.CAL*		Inline XBRL Taxonomy Calculation Linkbase
101.DEF*		Inline XBRL Taxonomy Definition Linkbase
101.LAB*		Inline XBRL Taxonomy Label Linkbase
101.PRE*		Inline XBRL Taxonomy Presentation Linkbase
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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

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

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

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

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

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

Risks Related to Shareholder Rights Plan and Activist Investors

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

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

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

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

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

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

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

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

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

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table presents information related to our repurchases of common stock during the three months ended January 31, 2026:

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

11/1/2025 - 11/30/2025		1,278,064	$	5.38		1,278,064	$	238,741,797
12/1/2025 - 12/31/2025		-	$	-		-	$	238,741,797
1/1/2026 - 1/31/2026		368,983	$	5.45		368,983	$	236,730,476
Total		1,647,047	$	5.39		1,647,047	$	236,730,476

(1)

On September 22, 2025, our Board of Directors authorized a stock repurchase plan authorizing us to repurchase, from time to time, up to $250 million of our outstanding common stock (the “Repurchase Plan”). As of the date of this filing, we had $236.7 million of authorization remaining under the Repurchase Plan. The Repurchase Plan has no expiration and will continue until otherwise modified or terminated by our Board of Directors at any time in its sole discretion.

Item 5. Other Information

Annual Meeting of Stockholders

The Company’s Board of Directors has not yet determined the date, time or location of the Company’s 2026 Annual Meeting of Stockholders (the “2026 Annual Meeting”). The Company intends to announce the date, time and location of the 2026 Annual Meeting through a press release and the filing of proxy materials with the SEC once such information has been determined.

Because the date of the 2026 Annual Meeting has not yet been established, the deadlines for stockholder proposals or director nominations pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 and the Company’s bylaws have not yet been determined. Once the Company announces the date of the 2026 Annual Meeting, stockholders will be notified of the applicable deadlines for submission of stockholder proposals and director nominations in accordance with applicable SEC rules and the Company’s governing documents.

Transition Agreement

On March 16, 2026, the Board approved a Transition Agreement (as defined below) with David Namdar, the Company’s current Chief Executive Officer, and his affiliate, and determined that, in accordance with the Transition Agreement, Mr. Namdar’s service in such role will conclude upon the earlier of (a) the Company’s next annual meeting of stockholders, (b) the appointment by the Board of a new or interim chief executive officer of the Company, or (c) August 31, 2026 (the “Separation Date”). In connection with Mr. Namdar’s transition out of his role as Chief Executive Officer, on March 16, 2026, the Company entered into a Transition Agreement (the “Transition Agreement”) with Mr. Namdar and Abound LLC, a Puerto Rico limited liability company pursuant to which Mr. Namdar performs services for the Company, which (i) acknowledges and provides for compensation with respect to the work performed by Mr. Namdar for the Company since his appointment as Chief Executive Officer on August 5, 2025 (for which he has received no cash or equity compensation to date), and (ii) provides for the provision of transitional services by Mr. Namdar until the Separation Date.

As compensation for the work performed by Mr. Namdar from August 5, 2025 (the “Appointment Date”) to the date of the Transition Agreement, Mr. Namdar will receive a make-up consulting fee of $375,000. As compensation for the work to be performed by Mr. Namdar commencing on March 16, 2026 and through the Separation Date, Mr. Namdar will receive a base consulting fee of $50,000 per month. In addition, in lieu of an equity incentive award for his service from the Appointment Date, and in exchange for execution and non-revocation of a release of claims in favor of the Company, Mr. Namdar will receive a lump sum cash payment equal in amount to the product of 132,000 shares multiplied by the greater of the 30-trading day average stock price of the Company’s common stock on (x) March 16, 2026 or (y) the Separation Date. Under the Transition Agreement, in exchange for a release of claims and Mr. Namdar’s agreement to certain restrictive covenants, including confidentiality, non-compete, non-solicitation, non-disparagement and non-assistance to litigants restrictions, Mr. Namdar will receive a lump sum cash payment equal to eighteen months of the base consulting fee ($900,000), payable following the Separation Date.

The foregoing description of the Transition Agreement is not complete and is qualified in its entirety by reference to the full text of the Transition Agreement, a copy of which is attached hereto as Exhibit 10.7 and incorporated herein by reference.

Item 6. Exhibits

EXHIBIT INDEX

Exhibit
Number		Description of Exhibit
3.1		Amended and Restated Bylaws, dated December 26, 2025 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed December 29, 2025).
10.6		Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed December 12, 2025).
10.7*		Transition Agreement, dated March 16, 2026, by and between CEA Industries Inc., Abound LLC, and David Namdar
31.1*		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 *		Certification of Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Schema
101.CAL*		Inline XBRL Taxonomy Calculation Linkbase
101.DEF*		Inline XBRL Taxonomy Definition Linkbase
101.LAB*		Inline XBRL Taxonomy Label Linkbase
101.PRE*		Inline XBRL Taxonomy Presentation Linkbase
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.
**	Furnished herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CEA INDUSTRIES INC.
	(the “Registrant”)


Dated: March 16, 2026	By:	/s/ David Namdar
		David Namdar
		Chief Executive Officer
		(Principal Executive Officer)

Filing Compare · CEA Industries Inc.