false FY 0001482541 0001482541 2024-01-01 2024-12-31 0001482541 CEAD:CommonStock0.00001ParValueMember 2024-01-01 2024-12-31 0001482541 CEAD:WarrantsToPurchaseCommonStockMember 2024-01-01 2024-12-31 0001482541 2024-06-28 0001482541 2025-03-27 0001482541 2024-10-01 2024-12-31 0001482541 2024-12-31 0001482541 2023-12-31 0001482541 2023-01-01 2023-12-31 0001482541 us-gaap:CommonStockMember 2022-12-31 0001482541 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001482541 us-gaap:RetainedEarningsMember 2022-12-31 0001482541 2022-12-31 0001482541 us-gaap:CommonStockMember 2023-12-31 0001482541 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001482541 us-gaap:RetainedEarningsMember 2023-12-31 0001482541 us-gaap:CommonStockMember 2023-01-01 2023-12-31 0001482541 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-12-31 0001482541 us-gaap:RetainedEarningsMember 2023-01-01 2023-12-31 0001482541 us-gaap:CommonStockMember 2024-01-01 2024-12-31 0001482541 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-12-31 0001482541 us-gaap:RetainedEarningsMember 2024-01-01 2024-12-31 0001482541 us-gaap:CommonStockMember 2024-12-31 0001482541 us-gaap:AdditionalPaidInCapitalMember 2024-12-31 0001482541 us-gaap:RetainedEarningsMember 2024-12-31 0001482541 2022-02-15 2022-02-15 0001482541 2024-05-07 2024-05-07 0001482541 us-gaap:InventoryValuationAndObsolescenceMember 2024-12-31 0001482541 us-gaap:InventoryValuationAndObsolescenceMember 2023-12-31 0001482541 CEAD:OneCustomerMember 2024-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember CEAD:CustomerOneMember 2024-01-01 2024-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember CEAD:CustomerTwoMember 2024-01-01 2024-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember CEAD:CustomerOneMember 2023-01-01 2023-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember CEAD:CustomerTwoMember 2023-01-01 2023-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember CEAD:CustomerThreeMember 2023-01-01 2023-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember CEAD:CustomerOneMember 2024-01-01 2024-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember CEAD:CustomerTwoMember 2024-01-01 2024-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember CEAD:CustomerOneMember 2023-01-01 2023-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember CEAD:CustomerTwoMember 2023-01-01 2023-12-31 0001482541 us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember CEAD:CustomerThreeMember 2023-01-01 2023-12-31 0001482541 us-gaap:SupplierConcentrationRiskMember CEAD:PurchasesOfInventoryMember CEAD:SupplierOneMember 2024-01-01 2024-12-31 0001482541 us-gaap:SupplierConcentrationRiskMember CEAD:PurchasesOfInventoryMember CEAD:SupplierOneMember 2023-01-01 2023-12-31 0001482541 us-gaap:SupplierConcentrationRiskMember CEAD:PurchasesOfInventoryMember CEAD:SupplierTwoMember 2023-01-01 2023-12-31 0001482541 us-gaap:SupplierConcentrationRiskMember CEAD:PurchasesOfInventoryMember CEAD:SupplierThreeMember 2023-01-01 2023-12-31 0001482541 us-gaap:FurnitureAndFixturesMember 2024-12-31 0001482541 us-gaap:ComputerEquipmentMember 2024-12-31 0001482541 us-gaap:EquipmentMember 2024-12-31 0001482541 us-gaap:VehiclesMember 2024-12-31 0001482541 CEAD:EquipmentAndSystemsSalesMember 2024-01-01 2024-12-31 0001482541 CEAD:EquipmentAndSystemsSalesMember 2023-01-01 2023-12-31 0001482541 CEAD:EngineeringAndOtherServicesMember 2024-01-01 2024-12-31 0001482541 CEAD:EngineeringAndOtherServicesMember 2023-01-01 2023-12-31 0001482541 us-gaap:ShippingAndHandlingMember 2024-01-01 2024-12-31 0001482541 us-gaap:ShippingAndHandlingMember 2023-01-01 2023-12-31 0001482541 CEAD:ForfeitedNonRefundableCustomerDepositsMember 2024-01-01 2024-12-31 0001482541 CEAD:ForfeitedNonRefundableCustomerDepositsMember 2023-01-01 2023-12-31 0001482541 CEAD:TwoThousandAndTwentyFiveMember 2024-12-31 0001482541 CEAD:NewFacilityLeaseMember 2021-07-26 2021-07-28 0001482541 CEAD:NewFacilityLeaseMember 2021-07-28 0001482541 us-gaap:FurnitureAndFixturesMember 2023-12-31 0001482541 us-gaap:VehiclesMember 2023-12-31 0001482541 us-gaap:PropertyPlantAndEquipmentMember us-gaap:CostOfSalesMember 2024-01-01 2024-12-31 0001482541 us-gaap:PropertyPlantAndEquipmentMember CEAD:InventoryMember 2024-01-01 2024-12-31 0001482541 us-gaap:PropertyPlantAndEquipmentMember us-gaap:CostOfSalesMember 2023-01-01 2023-12-31 0001482541 us-gaap:PropertyPlantAndEquipmentMember CEAD:InventoryMember 2023-01-01 2023-12-31 0001482541 CEAD:WebsiteDevelopmentCostMember 2024-12-31 0001482541 CEAD:WebsiteDevelopmentCostMember 2023-12-31 0001482541 us-gaap:TrademarksMember 2024-12-31 0001482541 us-gaap:TrademarksMember 2023-12-31 0001482541 CEAD:ConsultingAgreementMember CEAD:LoneStarBioscienceIncMember srt:ChiefExecutiveOfficerMember 2022-10-13 0001482541 CEAD:LoneStarBioscienceIncMember srt:ChiefExecutiveOfficerMember CEAD:ConsultingAgreementMember 2022-12-31 0001482541 CEAD:ConsultingAgreementMember 2022-12-20 0001482541 CEAD:ConsultingAgreementMember CEAD:LoneStarBioscienceIncMember srt:ChiefExecutiveOfficerMember 2023-03-01 2023-03-31 0001482541 CEAD:LoneStarBioscienceIncMember 2023-01-01 2023-12-31 0001482541 CEAD:ConsultingAgreementMember CEAD:LoneStarBioscienceIncMember srt:ChiefExecutiveOfficerMember 2024-01-01 2024-12-31 0001482541 CEAD:NicholasJEttenMember 2024-06-19 2024-06-19 0001482541 CEAD:NicholasJEttenMember 2024-01-01 2024-12-31 0001482541 2023-10-20 2023-10-20 0001482541 2024-10-28 2024-10-28 0001482541 2024-06-07 2024-06-07 0001482541 2024-06-07 2024-12-31 0001482541 CEAD:ReverseStockSplitMember 2024-06-06 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:TwoThousandTwentyOneEquityIncentivePlanMember CEAD:DirectorsMember 2024-01-01 2024-12-31 0001482541 us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-12-31 0001482541 2022-01-01 2022-12-31 0001482541 CEAD:WarrantsRangeOneMember 2024-12-31 0001482541 CEAD:WarrantsRangeOneMember 2024-01-01 2024-12-31 0001482541 CEAD:WarrantsRangeTwoMember 2024-12-31 0001482541 CEAD:WarrantsRangeTwoMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandTwentyTwoInvestorWarrantsMember 2022-02-15 0001482541 CEAD:TwoThousandTwentyTwoInvestorWarrantsMember 2022-02-15 2022-02-15 0001482541 CEAD:TwoThousandTwentyTwoOverAllotmentWarrantsMember 2022-02-15 0001482541 CEAD:TwoThousandTwentyTwoOverAllotmentWarrantsMember 2022-02-15 2022-02-15 0001482541 CEAD:TwoThousandTwentyTwoUnderwriterWarrantsMember 2022-02-15 0001482541 CEAD:TwoThousandTwentyTwoUnderwriterWarrantsMember 2022-02-15 2022-02-15 0001482541 us-gaap:SeriesBPreferredStockMember 2022-02-16 2022-02-16 0001482541 us-gaap:CommonStockMember us-gaap:SeriesBPreferredStockMember 2022-02-16 2022-02-16 0001482541 CEAD:PreFundedConversionWarrantsMember us-gaap:SeriesBPreferredStockMember 2022-02-16 2022-02-16 0001482541 CEAD:PreFundedConversionWarrantsMember us-gaap:SeriesBPreferredStockMember 2022-02-16 0001482541 us-gaap:WarrantMember 2022-02-16 2022-02-16 0001482541 us-gaap:SeriesBPreferredStockMember CEAD:SecuritiesPurchaseAgreementMember 2021-09-28 2021-09-28 0001482541 us-gaap:SeriesBPreferredStockMember CEAD:SecuritiesPurchaseAgreementMember 2021-09-28 0001482541 us-gaap:SeriesBPreferredStockMember CEAD:SecuritiesPurchaseAgreementMember srt:MaximumMember 2021-09-28 0001482541 us-gaap:SeriesBPreferredStockMember CEAD:PlacementAgentWarrantsMember 2021-09-28 0001482541 CEAD:PlacementAgentWarrantsMember us-gaap:SeriesBPreferredStockMember 2024-09-28 2024-09-28 0001482541 CEAD:PlacementAgentWarrantsMember us-gaap:SeriesBPreferredStockMember 2024-11-03 2024-11-03 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:TwoThousandTwentyOneEquityIncentivePlanMember 2024-12-17 0001482541 CEAD:DirectorsMember CEAD:TwoThousandTwentyOneEquityPlanMember us-gaap:RestrictedStockUnitsRSUMember 2024-12-17 2024-12-17 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:TwoThousandTwentyOneEquityIncentivePlanMember 2024-01-02 0001482541 CEAD:DirectorsMember CEAD:TwoThousandTwentyOneEquityPlanMember us-gaap:RestrictedStockUnitsRSUMember 2024-01-02 2024-01-02 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:TwoThousandTwentyOneEquityIncentivePlanMember 2023-01-03 0001482541 CEAD:DirectorsMember CEAD:TwoThousandTwentyOneEquityPlanMember us-gaap:RestrictedStockUnitsRSUMember 2023-01-03 2023-01-03 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:TwoThousandTwentyOneEquityIncentivePlanMember us-gaap:SubsequentEventMember 2025-01-02 0001482541 CEAD:DirectorsMember CEAD:TwoThousandTwentyOneEquityPlanMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:SubsequentEventMember 2025-01-02 2025-01-02 0001482541 srt:DirectorMember us-gaap:RestrictedStockUnitsRSUMember 2022-01-12 2022-01-17 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanMember us-gaap:RestrictedStockMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanMember CEAD:NonQualifiedStockOptionMember 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember 2021-03-22 0001482541 us-gaap:RestrictedStockUnitsRSUMember 2024-01-01 2024-12-31 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:TwoThousandTwentyOneEquityIncentivePlanMember 2024-12-31 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:TwoThousandTwentyOneEquityIncentivePlanMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember CEAD:NonQualifiedStockOptionMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember us-gaap:RestrictedStockMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember CEAD:NonQualifiedStockOptionMember 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember CEAD:IncentiveStockOptionMember 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember us-gaap:RestrictedStockUnitsRSUMember 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember 2024-01-01 2024-12-31 0001482541 CEAD:ThreeDirectorsMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:SubsequentEventMember 2025-01-02 2025-01-02 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember CEAD:EmployeesAndConsultantsMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember CEAD:EmployeesAndConsultantsMember 2023-01-01 2023-12-31 0001482541 CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanMember CEAD:EmployeesAndConsultantsMember 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember CEAD:NonQualifiedStockOptionsMember CEAD:DirectorsMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandTwentyOneEquityPlanMember CEAD:NonQualifiedStockOptionsMember CEAD:DirectorsMember 2023-01-01 2023-12-31 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:EmployeesDirectorsandConsultantsMember 2024-01-01 2024-12-31 0001482541 us-gaap:RestrictedStockUnitsRSUMember CEAD:EmployeesDirectorsandConsultantsMember 2023-01-01 2023-12-31 0001482541 CEAD:DirectorsMember CEAD:TwoThousandTwentyOneEquityPlanMember us-gaap:RestrictedStockUnitsRSUMember 2024-12-31 0001482541 CEAD:TwoThousandSeventeenAndTwoThousandTwentyOneEquityPlanMember CEAD:EmployeesAndConsultantsMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandSeventeenAndTwoThousandTwentyOneEquityPlanMember CEAD:DirectorsMember 2024-01-01 2024-12-31 0001482541 us-gaap:CostOfSalesMember 2024-01-01 2024-12-31 0001482541 us-gaap:CostOfSalesMember 2023-01-01 2023-12-31 0001482541 CEAD:AdvertisingAndMarketingExpensesMember 2024-01-01 2024-12-31 0001482541 CEAD:AdvertisingAndMarketingExpensesMember 2023-01-01 2023-12-31 0001482541 CEAD:ProductDevelopmentCostsMember 2024-01-01 2024-12-31 0001482541 CEAD:ProductDevelopmentCostsMember 2023-01-01 2023-12-31 0001482541 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2024-01-01 2024-12-31 0001482541 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2023-01-01 2023-12-31 0001482541 CEAD:EmployeesAndConsultantsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2022-12-31 0001482541 CEAD:EmployeesAndConsultantsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2023-01-01 2023-12-31 0001482541 CEAD:EmployeesAndConsultantsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2023-12-31 0001482541 CEAD:EmployeesAndConsultantsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2024-01-01 2024-12-31 0001482541 CEAD:EmployeesAndConsultantsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2024-12-31 0001482541 CEAD:DirectorsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2022-12-31 0001482541 CEAD:DirectorsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2022-01-01 2022-12-31 0001482541 CEAD:DirectorsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2023-01-01 2023-12-31 0001482541 CEAD:DirectorsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2023-12-31 0001482541 CEAD:DirectorsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2024-01-01 2024-12-31 0001482541 CEAD:DirectorsMember CEAD:NonQualifiedStockOptionsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2024-12-31 0001482541 CEAD:EmployeesAndConsultantsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2022-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember CEAD:EmployeesAndConsultantsMember 2023-01-01 2023-12-31 0001482541 CEAD:EmployeesAndConsultantsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2023-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember CEAD:EmployeesAndConsultantsMember 2024-01-01 2024-12-31 0001482541 CEAD:EmployeesAndConsultantsMember CEAD:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMember 2024-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanMember CEAD:EmployeesDirectorsandConsultantsMember us-gaap:RestrictedStockUnitsRSUMember 2022-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanMember CEAD:EmployeesDirectorsandConsultantsMember us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanMember CEAD:EmployeesDirectorsandConsultantsMember us-gaap:RestrictedStockUnitsRSUMember 2023-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanMember CEAD:EmployeesDirectorsandConsultantsMember us-gaap:RestrictedStockUnitsRSUMember 2024-01-01 2024-12-31 0001482541 CEAD:TwoThousandAndSeventeenEquityPlanMember CEAD:EmployeesDirectorsandConsultantsMember us-gaap:RestrictedStockUnitsRSUMember 2024-12-31 0001482541 2017-12-31 0001482541 CEAD:OwnershipMember 2024-12-31 0001482541 CEAD:ThreeDirectorsMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:SubsequentEventMember 2025-01-05 2025-01-05 0001482541 CEAD:FatPandaLtdMember us-gaap:SubsequentEventMember 2025-02-07 2025-02-07 0001482541 CEAD:FatPandaLtdMember us-gaap:SubsequentEventMember 2025-02-07 iso4217:USD xbrli:shares iso4217:USD xbrli:shares CEAD:Segment xbrli:pure iso4217:CAD iso4217:CAD xbrli:shares

00014825412026FYFALSEUnlimited.001.0833.0833http://fasb.org/us-gaap/2025#OtherAssetsCurrent http://fasb.org/us-gaap/2025#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2025#OtherAssetsCurrent http://fasb.org/us-gaap/2025#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2025#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2025#OtherLiabilitiesNoncurrentiso4217:USDxbrli:sharesiso4217:USDxbrli:sharesbncww:segmentxbrli:purebncww:tokenbncww:tradingDaybncww:leaseutr:sqft00014825412025-05-012026-04-300001482541bncww:CommonStock0.00001ParValueMember2025-05-012026-04-300001482541bncww:WarrantsToPurchaseCommonStockOneMember2025-05-012026-04-300001482541bncww:WarrantsToPurchaseCommonStockTwoMember2025-05-012026-04-3000014825412025-10-3100014825412026-06-150001482541srt:PresidentMemberus-gaap:SubsequentEventMember2026-05-040001482541srt:PresidentMemberus-gaap:SubsequentEventMember2026-05-042026-05-0400014825412025-06-072026-04-3000014825412025-05-012025-06-0600014825412025-01-012025-04-3000014825412026-04-300001482541bncww:PredecessorMember2025-04-300001482541us-gaap:RelatedPartyMember2026-04-300001482541bncww:PredecessorMemberus-gaap:RelatedPartyMember2025-04-300001482541us-gaap:NonrelatedPartyMember2026-04-300001482541bncww:PredecessorMemberus-gaap:NonrelatedPartyMember2025-04-3000014825412025-04-300001482541bncww:PredecessorMember2025-01-012025-04-300001482541bncww:PredecessorMember2025-05-012025-06-060001482541us-gaap:NonrelatedPartyMember2025-06-072026-04-300001482541bncww:PredecessorMemberus-gaap:NonrelatedPartyMember2025-05-012025-06-060001482541bncww:PredecessorMemberus-gaap:NonrelatedPartyMember2025-01-012025-04-300001482541us-gaap:RelatedPartyMember2025-06-072026-04-300001482541bncww:PredecessorMemberus-gaap:RelatedPartyMember2025-05-012025-06-060001482541bncww:PredecessorMemberus-gaap:RelatedPartyMember2025-01-012025-04-300001482541us-gaap:CommonStockMember2025-06-060001482541us-gaap:PreferredStockMember2025-06-060001482541us-gaap:AdditionalPaidInCapitalMember2025-06-060001482541us-gaap:RetainedEarningsMember2025-06-060001482541us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-06-0600014825412025-06-060001482541us-gaap:CommonStockMember2025-06-072026-04-300001482541us-gaap:AdditionalPaidInCapitalMember2025-06-072026-04-300001482541us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-06-072026-04-300001482541us-gaap:RetainedEarningsMember2025-06-072026-04-300001482541us-gaap:CommonStockMember2026-04-300001482541us-gaap:PreferredStockMember2026-04-300001482541us-gaap:AdditionalPaidInCapitalMember2026-04-300001482541us-gaap:RetainedEarningsMember2026-04-300001482541us-gaap:AccumulatedOtherComprehensiveIncomeMember2026-04-300001482541bncww:PredecessorMemberus-gaap:CommonStockMember2025-04-300001482541bncww:PredecessorMemberus-gaap:AdditionalPaidInCapitalMember2025-04-300001482541bncww:PredecessorMemberus-gaap:RetainedEarningsMember2025-04-300001482541bncww:PredecessorMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2025-04-300001482541bncww:PredecessorMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2025-05-012025-06-060001482541bncww:PredecessorMemberus-gaap:RetainedEarningsMember2025-05-012025-06-060001482541bncww:PredecessorMemberus-gaap:CommonStockMember2025-06-060001482541bncww:PredecessorMemberus-gaap:AdditionalPaidInCapitalMember2025-06-060001482541bncww:PredecessorMemberus-gaap:RetainedEarningsMember2025-06-060001482541bncww:PredecessorMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2025-06-060001482541bncww:PredecessorMember2025-06-0600014825412024-05-012025-04-300001482541bncww:PredecessorMemberus-gaap:CommonStockMember2024-04-300001482541bncww:PredecessorMemberus-gaap:AdditionalPaidInCapitalMember2024-04-300001482541bncww:PredecessorMemberus-gaap:RetainedEarningsMember2024-04-300001482541bncww:PredecessorMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-300001482541bncww:PredecessorMember2024-04-300001482541bncww:PredecessorMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2024-05-012025-04-300001482541bncww:PredecessorMember2024-05-012025-04-300001482541bncww:PredecessorMemberus-gaap:RetainedEarningsMember2024-05-012025-04-300001482541bncww:SecuritiesPurchaseAgreementMember2025-08-052025-08-050001482541us-gaap:OperatingSegmentsMemberbncww:CEAIndustrySegmentMember2025-06-072026-04-300001482541us-gaap:OperatingSegmentsMemberbncww:BNBTreasuryManagementMember2025-06-072026-04-300001482541us-gaap:CorporateNonSegmentMember2025-06-072026-04-300001482541us-gaap:OperatingSegmentsMemberbncww:CEAIndustrySegmentMember2026-04-300001482541us-gaap:OperatingSegmentsMemberbncww:BNBTreasuryManagementMember2026-04-300001482541us-gaap:CorporateNonSegmentMember2026-04-300001482541us-gaap:OperatingSegmentsMemberbncww:CEAIndustrySegmentMember2025-05-012025-06-060001482541us-gaap:OperatingSegmentsMemberbncww:BNBTreasuryManagementMember2025-05-012025-06-060001482541us-gaap:CorporateNonSegmentMember2025-05-012025-06-060001482541us-gaap:OperatingSegmentsMemberbncww:CEAIndustrySegmentMember2025-06-060001482541us-gaap:OperatingSegmentsMemberbncww:BNBTreasuryManagementMember2025-06-060001482541us-gaap:CorporateNonSegmentMember2025-06-060001482541us-gaap:OperatingSegmentsMemberbncww:CEAIndustrySegmentMember2025-01-012025-04-300001482541us-gaap:OperatingSegmentsMemberbncww:BNBTreasuryManagementMember2025-01-012025-04-300001482541us-gaap:CorporateNonSegmentMember2025-01-012025-04-300001482541us-gaap:OperatingSegmentsMemberbncww:CEAIndustrySegmentMember2025-04-300001482541us-gaap:OperatingSegmentsMemberbncww:BNBTreasuryManagementMember2025-04-300001482541us-gaap:CorporateNonSegmentMember2025-04-300001482541bncww:Supplier1Memberus-gaap:SupplierConcentrationRiskMemberus-gaap:InventoriesMember2025-06-072026-04-300001482541bncww:Supplier2Memberus-gaap:SupplierConcentrationRiskMemberus-gaap:InventoriesMember2025-06-072026-04-300001482541bncww:Supplier1Memberus-gaap:SupplierConcentrationRiskMemberus-gaap:InventoriesMember2025-05-012025-06-060001482541bncww:Supplier2Memberus-gaap:SupplierConcentrationRiskMemberus-gaap:InventoriesMember2025-05-012025-06-060001482541bncww:Supplier1Memberus-gaap:SupplierConcentrationRiskMemberus-gaap:InventoriesMember2025-01-012025-04-300001482541bncww:Supplier2Memberus-gaap:SupplierConcentrationRiskMemberus-gaap:InventoriesMember2025-01-012025-04-300001482541us-gaap:TradeNamesMember2026-04-300001482541us-gaap:TradeNamesMember2025-04-300001482541bncww:StapledWarrantsMemberbncww:SecuritiesPurchaseAgreementMember2025-08-052025-08-050001482541bncww:BinanceCoinMember2026-04-300001482541bncww:FatPandaGroupOfCompaniesMember2025-06-060001482541bncww:FatPandaGroupOfCompaniesMember2025-06-062025-06-060001482541bncww:LenderMemberbncww:FatPandaGroupOfCompaniesMember2025-06-060001482541us-gaap:NotesPayableOtherPayablesMemberus-gaap:RelatedPartyMemberbncww:PromissoryNoteMember2026-04-300001482541us-gaap:RelatedPartyMemberbncww:ConvertiblePromissoryNoteMemberus-gaap:NotesPayableOtherPayablesMember2026-04-300001482541bncww:FatPandaGroupOfCompaniesMember2025-06-072026-04-300001482541bncww:FatPandaGroupOfCompaniesMember2026-04-300001482541bncww:FatPandaGroupOfCompaniesMember2025-05-012026-04-300001482541bncww:FatPandaGroupOfCompaniesMember2025-01-012025-04-300001482541bncww:DigitalAssetsMemberus-gaap:ProductConcentrationRiskMemberus-gaap:AssetsTotalMember2025-05-012026-04-300001482541bncww:RetailVapeSalesMemberbncww:FatPandaMember2025-06-072026-04-300001482541bncww:RetailVapeSalesMemberbncww:FatPandaMember2025-05-012025-06-060001482541bncww:RetailVapeSalesMemberbncww:FatPandaMember2025-01-012025-04-300001482541bncww:EcommerceVapeSalesMemberbncww:FatPandaMember2025-06-072026-04-300001482541bncww:EcommerceVapeSalesMemberbncww:FatPandaMember2025-05-012025-06-060001482541bncww:EcommerceVapeSalesMemberbncww:FatPandaMember2025-01-012025-04-300001482541bncww:OtherVapeSalesMemberbncww:FatPandaMember2025-06-072026-04-300001482541bncww:OtherVapeSalesMemberbncww:FatPandaMember2025-05-012025-06-060001482541bncww:OtherVapeSalesMemberbncww:FatPandaMember2025-01-012025-04-300001482541bncww:FatPandaMember2025-06-072026-04-300001482541bncww:FatPandaMember2025-05-012025-06-060001482541bncww:FatPandaMember2025-01-012025-04-300001482541bncww:EquipmentAndSystemsSalesMemberbncww:IndustrialClimateControlSystemsMember2025-06-072026-04-300001482541bncww:EquipmentAndSystemsSalesMemberbncww:IndustrialClimateControlSystemsMember2025-05-012025-06-060001482541bncww:EquipmentAndSystemsSalesMemberbncww:IndustrialClimateControlSystemsMember2025-01-012025-04-300001482541bncww:OtherSalesMemberbncww:IndustrialClimateControlSystemsMember2025-06-072026-04-300001482541bncww:OtherSalesMemberbncww:IndustrialClimateControlSystemsMember2025-05-012025-06-060001482541bncww:OtherSalesMemberbncww:IndustrialClimateControlSystemsMember2025-01-012025-04-300001482541bncww:IndustrialClimateControlSystemsMember2025-06-072026-04-300001482541bncww:IndustrialClimateControlSystemsMember2025-05-012025-06-060001482541bncww:IndustrialClimateControlSystemsMember2025-01-012025-04-300001482541bncww:BTCMember2026-04-300001482541bncww:USDTMember2026-04-300001482541bncww:BinanceCoinMember2025-06-060001482541srt:CryptoAssetOtherMember2025-06-060001482541bncww:BinanceCoinMember2025-06-072026-04-300001482541srt:CryptoAssetOtherMember2025-06-072026-04-300001482541srt:CryptoAssetOtherMember2026-04-300001482541bncww:USDTMember2025-06-072026-04-300001482541bncww:BTCMember2025-06-072026-04-300001482541us-gaap:NotesPayableOtherPayablesMemberus-gaap:RelatedPartyMemberbncww:TaxIndemnificationNoteMember2026-04-300001482541us-gaap:NotesPayableOtherPayablesMemberus-gaap:RelatedPartyMemberbncww:PromissoryNoteMember2025-05-012026-04-300001482541us-gaap:NotesPayableOtherPayablesMemberus-gaap:RelatedPartyMember2026-04-300001482541us-gaap:NotesPayableOtherPayablesMemberus-gaap:RelatedPartyMember2025-05-012026-04-300001482541us-gaap:RelatedPartyMemberbncww:ConvertiblePromissoryNoteMemberus-gaap:NotesPayableOtherPayablesMember2025-05-012026-04-300001482541us-gaap:NotesPayableOtherPayablesMemberus-gaap:RelatedPartyMember2026-04-300001482541us-gaap:NotesPayableOtherPayablesMemberus-gaap:RelatedPartyMember2025-05-012026-04-300001482541us-gaap:NotesPayableOtherPayablesMemberus-gaap:RelatedPartyMember2025-06-072026-04-300001482541us-gaap:RevolvingCreditFacilityMemberbncww:FatPandaBridgeLoanMemberus-gaap:LineOfCreditMember2025-06-040001482541us-gaap:RevolvingCreditFacilityMemberbncww:FatPandaBridgeLoanMemberus-gaap:LineOfCreditMember2025-12-042025-12-040001482541us-gaap:WarrantMemberus-gaap:CommonStockMember2026-04-300001482541bncww:StockRightsMemberus-gaap:CommonStockMember2026-04-300001482541us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonStockMember2026-04-300001482541us-gaap:StockOptionMemberus-gaap:CommonStockMember2026-04-300001482541us-gaap:WarrantMemberus-gaap:PreferredStockMember2026-04-300001482541bncww:StockRightsMemberus-gaap:PreferredStockMember2026-04-300001482541us-gaap:RestrictedStockUnitsRSUMemberus-gaap:PreferredStockMember2026-04-300001482541us-gaap:StockOptionMemberus-gaap:PreferredStockMember2026-04-300001482541us-gaap:WarrantMember2026-04-300001482541bncww:StockRightsMember2026-04-300001482541us-gaap:RestrictedStockUnitsRSUMember2026-04-300001482541us-gaap:StockOptionMember2026-04-300001482541bncww:SeriesCJuniorParticipatingPreferredStockMemberus-gaap:CommonStockMember2026-04-300001482541bncww:SeriesCJuniorParticipatingPreferredStockMemberus-gaap:PreferredStockMember2026-04-300001482541bncww:SeriesCJuniorParticipatingPreferredStockMemberus-gaap:PreferredStockMember2026-04-302026-04-300001482541bncww:SeriesCJuniorParticipatingPreferredStockMember2025-12-2600014825412025-12-262025-12-260001482541bncww:SeriesCJuniorParticipatingPreferredStockMember2025-12-262025-12-2600014825412025-09-300001482541srt:MaximumMemberbncww:AtTheMarketOfferingAgreementMember2025-08-252025-08-250001482541bncww:AtTheMarketOfferingAgreementMember2025-06-072026-04-300001482541us-gaap:CommonStockMember2025-08-012025-08-310001482541bncww:PrefundedWarrantsMember2025-08-012025-08-310001482541bncww:StapledWarrantsMember2025-08-012025-08-310001482541bncww:StrategicAdvisorWarrantsMember2025-08-052025-08-050001482541bncww:AssetManagerWarrantsMember2025-08-052025-08-0500014825412025-08-050001482541bncww:PrefundedWarrantsMember2025-08-052025-08-050001482541bncww:StapledWarrantsMember2025-08-052025-08-050001482541bncww:StapledWarrantsMember2026-04-300001482541bncww:PrefundedWarrantsMember2026-04-300001482541bncww:StrategicAdvisorWarrantsMember2026-04-300001482541bncww:AssetManagerWarrantsMember2026-04-300001482541bncww:InvestorWarrantsMember2026-04-300001482541bncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMember2026-04-300001482541bncww:StapledWarrantsMember2025-05-012026-04-300001482541bncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMemberbncww:UnderwriterMember2026-04-300001482541bncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMemberbncww:EmployeesMember2026-04-300001482541us-gaap:WarrantMember2025-06-060001482541us-gaap:WarrantMember2025-06-072026-04-300001482541bncww:StapledWarrantsMemberus-gaap:WarrantMember2025-06-072026-04-300001482541bncww:PrefundedWarrantsMemberus-gaap:WarrantMember2025-06-072026-04-300001482541bncww:StrategicAdvisorWarrantsMemberus-gaap:WarrantMember2025-06-072026-04-300001482541bncww:AssetManagerWarrantsMemberus-gaap:WarrantMember2025-06-072026-04-300001482541bncww:PublicWarrantsMemberus-gaap:WarrantMember2025-06-072026-04-300001482541bncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMemberus-gaap:WarrantMember2025-06-072026-04-300001482541us-gaap:WarrantMember2026-04-300001482541us-gaap:WarrantMember2025-05-012026-04-300001482541bncww:A2026InducementPlanMember2026-04-300001482541bncww:A2026InducementPlanMember2025-06-072026-04-300001482541bncww:A2026InducementPlanMemberus-gaap:RestrictedStockUnitsRSUMember2026-04-300001482541bncww:A2026InducementPlanMemberus-gaap:StockOptionMember2026-04-300001482541bncww:A2021EquityIncentivePlanMember2026-04-300001482541bncww:A2021EquityIncentivePlanMember2025-06-072026-04-300001482541bncww:A2021EquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2026-04-300001482541bncww:A2021EquityIncentivePlanMemberus-gaap:StockOptionMember2026-04-300001482541bncww:A2017EquityIncentivePlanMember2026-04-300001482541bncww:A2017EquityIncentivePlanMember2025-06-072026-04-300001482541bncww:A2017EquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2026-04-300001482541bncww:A2017EquityIncentivePlanMemberus-gaap:StockOptionMember2026-04-300001482541bncww:NonQualifiedStockOptionsMemberbncww:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMemberbncww:EmployeeAndConsultantMember2025-06-072026-04-300001482541bncww:NonQualifiedStockOptionsMembersrt:MinimumMemberbncww:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMemberbncww:EmployeeAndConsultantMember2025-06-072026-04-300001482541bncww:NonQualifiedStockOptionsMembersrt:MaximumMemberbncww:TwoThousandAndSeventeenEquityPlanAndTwoThousandAndTwentyOneEquityPlanMemberbncww:EmployeeAndConsultantMember2025-06-072026-04-300001482541bncww:NonQualifiedStockOptionsMemberus-gaap:StockOptionMemberbncww:A2021EquityIncentivePlanMember2026-04-300001482541bncww:IncentiveStockOptionsMemberus-gaap:StockOptionMemberbncww:A2021EquityIncentivePlanMember2026-04-300001482541bncww:NonQualifiedStockOptionsMemberus-gaap:StockOptionMemberbncww:A2017EquityIncentivePlanMember2026-04-300001482541bncww:IncentiveStockOptionsMemberus-gaap:StockOptionMemberbncww:A2017EquityIncentivePlanMember2026-04-300001482541bncww:NonQualifiedStockOptionsMemberus-gaap:StockOptionMember2026-04-300001482541bncww:IncentiveStockOptionsMemberus-gaap:StockOptionMember2026-04-300001482541us-gaap:SellingGeneralAndAdministrativeExpensesMember2025-06-072026-04-300001482541bncww:EmployeesMemberus-gaap:RestrictedStockUnitsRSUMember2025-06-060001482541bncww:EmployeesMember2025-06-060001482541bncww:EmployeesMemberus-gaap:RestrictedStockUnitsRSUMember2025-06-072026-04-300001482541bncww:EmployeesMember2025-06-072026-04-300001482541bncww:EmployeesMemberus-gaap:RestrictedStockUnitsRSUMember2026-04-300001482541bncww:EmployeesMember2026-04-300001482541srt:DirectorMemberus-gaap:RestrictedStockUnitsRSUMember2025-06-060001482541srt:DirectorMember2025-06-060001482541srt:DirectorMemberus-gaap:RestrictedStockUnitsRSUMember2025-06-072026-04-300001482541srt:DirectorMember2025-06-072026-04-300001482541srt:DirectorMemberus-gaap:RestrictedStockUnitsRSUMember2026-04-300001482541srt:DirectorMember2026-04-300001482541srt:DirectorMemberus-gaap:RestrictedStockUnitsRSUMember2025-07-272025-07-270001482541us-gaap:StockOptionMemberbncww:TimeBasedMember2025-05-012026-04-300001482541us-gaap:RestrictedStockUnitsRSUMemberbncww:TimeBasedMember2025-05-012026-04-300001482541bncww:TimeBasedMember2025-05-012026-04-300001482541bncww:TimeBasedMember2026-04-300001482541us-gaap:StockOptionMember2025-05-012026-04-300001482541us-gaap:RestrictedStockUnitsRSUMember2025-05-012026-04-300001482541us-gaap:EmployeeStockOptionMember2025-06-072026-04-300001482541us-gaap:EmployeeStockOptionMember2025-05-012025-06-060001482541us-gaap:EmployeeStockOptionMember2025-01-012025-04-300001482541us-gaap:RestrictedStockUnitsRSUMember2025-06-072026-04-300001482541us-gaap:RestrictedStockUnitsRSUMember2025-05-012025-06-060001482541us-gaap:RestrictedStockUnitsRSUMember2025-01-012025-04-300001482541us-gaap:WarrantMemberbncww:StapledWarrantsMember2025-06-072026-04-300001482541us-gaap:WarrantMemberbncww:StapledWarrantsMember2025-05-012025-06-060001482541us-gaap:WarrantMemberbncww:StapledWarrantsMember2025-01-012025-04-300001482541us-gaap:WarrantMemberbncww:AssetManagerWarrantsMember2025-06-072026-04-300001482541us-gaap:WarrantMemberbncww:AssetManagerWarrantsMember2025-05-012025-06-060001482541us-gaap:WarrantMemberbncww:AssetManagerWarrantsMember2025-01-012025-04-300001482541us-gaap:WarrantMemberbncww:PublicWarrantsMember2025-06-072026-04-300001482541us-gaap:WarrantMemberbncww:PublicWarrantsMember2025-05-012025-06-060001482541us-gaap:WarrantMemberbncww:PublicWarrantsMember2025-01-012025-04-300001482541us-gaap:WarrantMemberbncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMember2025-06-072026-04-300001482541us-gaap:WarrantMemberbncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMember2025-05-012025-06-060001482541us-gaap:WarrantMemberbncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMember2025-01-012025-04-300001482541bncww:PrefundedWarrantsMember2025-06-072026-04-300001482541bncww:PrefundedWarrantsMember2025-05-012025-06-060001482541bncww:PrefundedWarrantsMember2025-01-012025-04-300001482541bncww:StrategicAdvisorWarrantsMember2025-06-072026-04-300001482541bncww:StrategicAdvisorWarrantsMember2025-05-012025-06-060001482541bncww:StrategicAdvisorWarrantsMember2025-01-012025-04-300001482541us-gaap:WarrantMember2025-06-072026-04-300001482541us-gaap:WarrantMember2025-05-012025-06-060001482541us-gaap:WarrantMember2025-01-012025-04-300001482541us-gaap:ConvertibleDebtSecuritiesMember2025-06-072026-04-300001482541us-gaap:ConvertibleDebtSecuritiesMember2025-05-012025-06-060001482541us-gaap:ConvertibleDebtSecuritiesMember2025-01-012025-04-300001482541bncww:PrefundedWarrantsMember2025-04-300001482541bncww:StrategicAdvisorWarrantsMember2025-04-300001482541us-gaap:WarrantMemberbncww:StapledWarrantsMember2026-04-300001482541us-gaap:WarrantMemberbncww:StapledWarrantsMember2025-04-300001482541us-gaap:WarrantMemberbncww:AssetManagerWarrantsMember2026-04-300001482541us-gaap:WarrantMemberbncww:AssetManagerWarrantsMember2025-04-300001482541us-gaap:WarrantMemberbncww:PublicWarrantsMember2026-04-300001482541us-gaap:WarrantMemberbncww:PublicWarrantsMember2025-04-300001482541us-gaap:WarrantMemberbncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMember2026-04-300001482541us-gaap:WarrantMemberbncww:TwoThousandAndTwentyTwoUnderwriterWarrantsMember2025-04-300001482541us-gaap:WarrantMember2026-04-300001482541us-gaap:WarrantMember2025-04-300001482541us-gaap:RestrictedStockUnitsRSUMember2026-04-300001482541us-gaap:RestrictedStockUnitsRSUMember2025-04-300001482541us-gaap:EmployeeStockOptionMember2026-04-300001482541us-gaap:EmployeeStockOptionMember2025-04-300001482541us-gaap:ConvertibleDebtSecuritiesMember2026-04-300001482541us-gaap:ConvertibleDebtSecuritiesMember2025-04-300001482541bncww:BNCBNBCaymanMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2026-04-300001482541bncww:CEABRSLLCMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2026-04-300001482541us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2026-04-300001482541us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-04-300001482541us-gaap:FairValueInputsLevel1Member2026-04-300001482541us-gaap:FairValueInputsLevel2Member2026-04-300001482541us-gaap:FairValueInputsLevel3Member2026-04-300001482541us-gaap:FairValueInputsLevel1Memberus-gaap:RelatedPartyMember2026-04-300001482541us-gaap:FairValueInputsLevel2Memberus-gaap:RelatedPartyMember2026-04-300001482541us-gaap:FairValueInputsLevel3Memberus-gaap:RelatedPartyMember2026-04-300001482541us-gaap:FairValueInputsLevel1Member2025-04-300001482541us-gaap:FairValueInputsLevel2Member2025-04-300001482541us-gaap:FairValueInputsLevel3Member2025-04-300001482541bncww:WarrantsMember2025-06-060001482541bncww:CashIncentiveAwardMember2025-06-060001482541bncww:WarrantsMember2025-06-072026-04-300001482541bncww:CashIncentiveAwardMember2025-06-072026-04-300001482541bncww:WarrantsMember2026-04-300001482541bncww:CashIncentiveAwardMember2026-04-300001482541bncww:StapledWarrantsMember2026-04-300001482541bncww:StapledWarrantsMember2025-06-072026-04-300001482541bncww:CashIncentiveAwardMember2026-04-300001482541bncww:CashIncentiveAwardMember2025-06-072026-04-300001482541us-gaap:EmployeeStockOptionMember2026-04-300001482541us-gaap:EmployeeStockOptionMember2025-06-072026-04-300001482541country:CA2025-06-072026-04-300001482541country:CA2025-05-012025-06-060001482541country:CA2025-01-012025-04-300001482541country:KY2025-06-072026-04-300001482541country:KY2025-05-012025-06-060001482541country:KY2025-01-012025-04-300001482541us-gaap:StateAndLocalJurisdictionMember2026-04-300001482541us-gaap:DomesticCountryMember2026-04-300001482541srt:MinimumMember2025-05-012026-04-300001482541srt:MaximumMember2025-05-012026-04-300001482541bncww:OwnershipMember2026-04-300001482541country:CA2026-04-300001482541country:CA2025-04-300001482541bncww:Mr.NamdarMembersrt:ChiefExecutiveOfficerMember2026-03-162026-03-160001482541bncww:Mr.NamdarMembersrt:ChiefExecutiveOfficerMember2026-03-160001482541bncww:Mr.NamdarMembersrt:ChiefExecutiveOfficerMember2025-06-072026-04-300001482541bncww:Mr.NamdarMemberus-gaap:RelatedPartyMember2026-04-300001482541bncww:FormerDirectorMember2025-06-072026-04-300001482541bncww:FormerDirectorMember2025-05-012026-04-300001482541bncww:Mr.ThomasMemberus-gaap:RelatedPartyMember2026-04-300001482541bncww:TwoThousandTwentyFiveAgreementMembersrt:DirectorMemberbncww:MrNicholasJEttenMember2024-06-192024-06-190001482541bncww:TwoThousandTwentyFiveAgreementMembersrt:DirectorMemberbncww:MrNicholasJEttenMember2025-06-072026-01-010001482541bncww:TwoThousandTwentyFiveAgreementMembersrt:DirectorMemberbncww:MrNicholasJEttenMember2026-04-012026-04-3000014825412026-02-012026-02-2800014825412026-04-302026-04-300001482541us-gaap:SubsequentEventMember2026-05-010001482541bncww:LouisvilleCOMember2026-04-300001482541bncww:ManitobaSaskatchewanAndOntarioCanadaMember2026-04-300001482541srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2025-08-012025-10-310001482541srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2025-06-072025-10-310001482541srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2025-11-012026-01-310001482541srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2025-06-072026-01-310001482541us-gaap:SubsequentEventMember2026-05-012026-05-010001482541us-gaap:SubsequentEventMember2026-05-012026-06-170001482541us-gaap:SubsequentEventMember2026-06-160001482541srt:DirectorMemberus-gaap:SubsequentEventMember2026-06-102026-06-1000014825412026-02-012026-04-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-K

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

~~FOR THE~~x ~~FISCAL~~ANNUAL ~~YEAR~~REPORT ~~ENDED~~PURSUANT ~~DECEMBER~~TO ~~31,~~SECTION ~~2024~~13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2026

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

~~FOR THE~~For ~~TRANSITION~~the ~~PERIOD~~transition ~~FROM~~period ~~____~~from TO_______ to _______

Commission ~~File~~ ~~Number:~~file number 001-41266

______________________________________

CEA INDUSTRIES INC.

~~(Exact name of registrant as specified in its charter)~~______________________________________

Nevada	~~27-3911608~~	27-3911608
(State or other jurisdiction of incorporation or organization)	~~(I.R.S. Employer Identification No.)~~	(I.R.S. Employer Identification No.)
385 South Pierce Avenue, Suite C Louisville, Colorado		80027
(Address of principal executive offices)		(Zip Code)

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

Registrant's telephone number, including area code: (303) 993-5271

Securities registered pursuant to Section 12(~~303~~b) ~~993-5271~~ of the Act:

(Registrant’s telephone number, including area code)


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	BNCWW	Nasdaq Capital Market
Warrants to purchase common stock	BNCWZ	Nasdaq Capital Market

Securities registered pursuant to ~~Section~~section 12(bg) of the ~~Exchange~~ Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00001 par value	CEAD	Nasdaq Capital Markets
Warrants to purchase common stock	CEADW	Nasdaq Capital Markets

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒.

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. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $5,171,944 based upon a closing price of $6.71 reported for such date on the Nasdaq Capital Markets.

As of March 27, 2025, the number of outstanding shares of common stock of the registrant was 802,346.

DOCUMENTS INCORPORATED BY REFERENCE

None.

~~CEA Industries~~(Title ~~Inc.~~of ~~Annual Report on Form 10-K~~class)

~~For Fiscal~~Indicate ~~Year~~by ~~Ended~~check ~~December~~mark 31if the registrant is a well-known seasoned issuer, ~~2024~~as defined in Rule 405 of the Securities Act. Yes o No x

~~Table~~ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of ~~Contents~~the Act. Yes o No x

			Page
Part I
	Item 1.	Business	4
	Item 1A.	Risk Factors	9
	Item 1B.	Unresolved Staff Comments	24
	Item 1C.	Cybersecurity	24
	Item 2.	Properties	25
	Item 3.	Legal Proceedings	25
	Item 4.	Mine Safety Disclosures	25
Part II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
	Item 6.	Selected Financial Data	27
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	37
	Item 8.	Financial Statements and Supplementary Data	37
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	37
	Item 9A.	Controls and Procedures	37
	Item 9B.	Other Information	38
Part III
	Item 10.	Directors, Executive Officers and Corporate Governance	39
	Item 11.	Executive Compensation	47
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	51
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	53
	Item 14.	Principal Accountant Fees and Services	53
Part IV
	Item 15.	Exhibits and Financial Statement Schedules	55
	Item 16.	Form 10-K Summary	55
	Signatures		57

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 past 90 days. Yes x No o

~~In this~~Indicate ~~Annual~~by ~~Report,~~check ~~unless~~mark ~~otherwise~~whether ~~indicated,~~ the ~~“Company”,~~registrant ~~“we”,~~has ~~“us”~~submitted orelectronically ~~“our”~~every ~~refer~~ Interactive Data File required to ~~CEA~~be ~~Industries~~submitted ~~Inc.~~pursuant ~~and,~~to ~~where~~Rule ~~appropriate,~~405 ~~its~~of ~~wholly~~Regulation S-~~owned~~T ~~subsidiary~~(§ 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 x No o

~~Hemp and~~Indicate ~~marijuana~~by ~~are~~check ~~technically~~mark ~~both~~whether ~~part of~~ the ~~“Cannabis~~registrant ~~sativa L.” plant. “Hemp”~~ is a ~~term~~large ~~used~~accelerated tofiler, ~~classify varieties~~an ofaccelerated ~~cannabis~~filer, ~~that~~a ~~contain~~non-accelerated ~~0.3%~~filer, ora ~~less~~smaller ~~tetrahydrocannabinol~~reporting ~~(“THC”) content (by dry weight)~~company, ~~the~~or ~~principal~~an ~~psychoactive constituent~~emerging ofgrowth ~~cannabis~~company. ~~Hemp~~See ~~and its derivatives were federally legalized in~~ the ~~United~~definitions ~~States as part the Agricultural Act~~ of ~~2018. “Marijuana”~~"large isaccelerated ~~a term used to classify varieties of cannabis that contain more than 0.3% THC (by dry weight). Marijuana is not federally legal in the United States. Many states~~filer," ~~however,~~"accelerated ~~have taken action to make marijuana legal for all purposes~~filer," ~~made~~"smaller itreporting ~~available for medical uses~~company," ~~decriminalized~~and ~~it,~~"emerging orgrowth acompany" ~~combination~~in ~~thereof.~~Rule We12b-2 ~~currently provide nearly all~~ of ~~our~~the ~~products~~Exchange ~~and services to customers that cultivate marijuana~~Act. ~~In this Annual Report, unless otherwise indicated, “cannabis” refers to “marijuana.”~~

~~Although our~~Large ~~customers~~accelerated ~~do,~~filer weo ~~neither~~Accelerated ~~grow,~~filer ~~manufacture,~~o ~~distribute~~Non-accelerated ~~nor~~Filer ~~sell~~Smaller ~~cannabis~~reporting ~~(marijuana)~~company ~~and~~Emerging ~~hemp~~growth orcompany ~~any of their related products.~~ o

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant (based on the last reported sale price of the registrant’s common stock on October 31, 2025 on the Nasdaq Capital Market) was approximately $323.5 million.

At June 15, 2026, the registrant had 41,263,850 shares of common stock, $0.00001 par value.

Documents incorporated by reference: Portions of the definitive proxy statement for the 2026 Annual Meeting of Stockholders of the Registrant to be filed subsequently with the SEC are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent indicated herein

TABLE OF CONTENTS


			Page
Part I
	Item 1.	Business	3
	Item 1A.	Risk Factors	12
	Item 1B.	Unresolved Staff Comments	46
	Item 1 C .	Cybersecurity	46
	Item 2.	Properties	47
	Item 3.	Legal Proceedings	47
	Item 4.	Mine Safety Disclosures	48

Part II
	Item 5.	Market for Registrant 's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	49
	Item 6.	[ Reserved ]	49
	Item 7.	Management 's Discussion and Analysis of Financial Condition and Results of Operations	50
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	66
	Item 8.	Financial Statements and Supplementary Data	67
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	117
	Item 9A.	Controls and Procedures	117
	Item 9B.	Other Information	118
	Item 9C.	Disclosure Regarding Foreign Jurisdiction that Prevent Inspections	118

Part III
	Item 10.	Directors, Executive Officers and Corporate Governance	119
	Item 11.	Executive Compensation	119
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	119
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	119
	Item 14.	Principal Accountant Fees and Services	119

Part IV
	Item 15.	Exhibits and Financial Statement Schedules	120
	Item 16.	Form 10-K Summary	122
	Signatures		123

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of 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”), which reflect our current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “should,” “seek,” “approximately,” “predict,” “intend,” “will,” “plan,” “estimate,” “anticipate,” the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. By their nature, forward-looking statements speak only as of the date they are made, are not statements of historical fact or guarantees of future performance and are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are many factors that may cause our actual results to differ materially from the forward-looking statements, including factors set forth under Part I, Item 1A. "Risk Factors" and Part I, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-K, as such factors may be updated from time to time in our other periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov and on the investor relations section of our website at www.ceaindustries.com. You should evaluate all forward-looking statements made in this Form 10-K in the context of these risks and uncertainties.

We caution you that the risks, uncertainties and other factors referenced below may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. All forward-looking statements in this Form 10-K apply only as of the date made and are expressly qualified in their entirety by the cautionary statements included in this Form 10-K and in other filings we make with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required by law.

Except where the context requires otherwise, the terms "Company," "we," "us," "our" and "BNC" refer to CEA Industries Inc., a Nevada corporation, and its subsidiaries.

~~CAUTIONARY STATEMENT~~Table of Contents

This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7, contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts 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.

These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. These forward-looking statements are based on assumptions regarding our present and future business strategies and the environment in which we operate. Important factors that could cause those differences include, but are not limited to:

● our business prospects and the transition the company is making to limit its historic engineering and grow facility operations while seeking new opportunities; ● our overall financial condition; ● the impact on our business from our planned restructuring and our ability to transition our operations: ● the inherent uncertainty of product development and product selection to meet client requirements, meeting client expectations, and whether there are or will be warranty claims; ● regulatory, legislative and judicial developments; ● competitive pressures in our current and future businesses; ● the ability to effectively operate our business, including servicing our existing customers and obtaining new business; ● our relationships with our customers and suppliers and our reliance on a limited number of customers and suppliers; ● changes in our business strategy and development plans, and in our plans for seeking strategic alternatives; ● our ability to attract and retain qualified personnel; ● our ability to raise equity and debt capital, as needed from time to time, to fund our operations and business strategy, including possible strategic alternatives and acquisitions; ● our ability to identify, complete and integrate potential strategic alternatives and acquisitions; ● future revenue being lower than expected;

● the substantial changes in the amount and current size of our backlog and our ability to convert backlog into revenue in a timely manner, or at all; ● our intention not to pay dividends: and ● our ability to maintain our listing of the shares of common stock and common stock purchase warrants on NASDAQ and the price volatility and limited trading volumes of our securities in the public market.

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

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, 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 annual report on Form 10-K 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 “Risk Factors” in this Annual Report on Form 10-K. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Annual Report on Form 10-K. 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 Annual Report on Form 10-K. The forward-looking statements and projections contained in this Annual Report on Form 10-K are excluded from the safe harbor protection provided by Section 27A of the Securities Act.

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 debt-related items and depreciation expense. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. For purposes of this Annual Report, (i) “adjusted net income (loss)” and “adjusted operating income (loss)” mean GAAP net income (loss) and operating income (loss), respectively, after adjustment for non-cash equity compensation expense, debt-related items and depreciation expense, and (ii) “net bookings” means new sales contracts executed during the quarter for which we received an initial deposit, net of any adjustments including cancellations and change orders during the quarter.

PART I

~~Item~~ ITEM 1. ~~Business~~ BUSINESS

Overview

CEA Industries, ~~through~~Inc. ~~our~~is ~~subsidiary,~~the ~~Surna~~largest ~~Cultivation~~publicly-traded ~~Technologies~~digital ~~LLC,~~asset ~~has~~treasury ~~been~~("DAT") focused exclusively on ~~selling~~BNB, ~~environmental~~the ~~control~~native token of the BNB Chain ecosystem ("BNB Chain"). We seek to continue to build and ~~other~~manage ~~technologies~~ the largest corporate treasury of BNB to provide institutional-grade exposure to BNB Chain and ~~services~~to generate income on our eligible BNB holdings through active treasury management, derivatives, or through new tokens or coins distributed by projects to ~~the~~a ~~Controlled~~wide ~~Environment~~range ~~Agriculture~~of individuals in the crypto community (~~“CEA”~~"Airdrops") ~~industry~~. ~~The~~We ~~CEA~~may ~~industry~~also ~~aims~~generate toreturns ~~optimize the~~through ~~use~~additional ofdigital ~~horticultural~~asset-related ~~resources~~activities such as ~~water~~validation and staking services, ~~energy~~lending, ~~space~~and other decentralized finance ("DeFi") protocols in the future, ~~capital~~though we have not staked or pledged any BNB through April 30, ~~and~~2026 ~~labor~~aside from BNB pledged for our debt obligations. At April 30, to2026, ~~create~~we held 515,544 BNB tokens with an ~~agriculture~~aggregate ~~business~~fair ~~that~~value isof ~~more~~$317.3 ~~efficient~~ million, and ~~more~~digital ~~productive~~assets, ~~than~~primarily ~~those~~BNB, ~~that~~represented ~~use~~94.6% ~~traditional~~of ~~farming~~our ~~methods.~~total ~~Typically~~assets, ~~the~~while ~~CEA~~our retail and industry ~~has~~segment ~~been~~operating ~~focused~~businesses onrepresent ~~indoor~~a ~~agriculture and~~significantly ~~vertical~~smaller ~~farming~~portion of our overall assets based on economic exposure.

Our strategy is built around a simple thesis: BNB is a scarce, utility-driven digital asset that serves as a core economic asset within one of the most active, and growing, blockchain ecosystems in the world. We seek to provide public equity market investors with exposure to BNB through a Nasdaq-listed, SEC-reporting company that combines direct BNB ownership, public company governance, audited financial reporting, treasury controls, custody infrastructure, and capital markets access. We view BNB as a strategic treasury asset and intend to continue evaluating opportunities to acquire additional digital assets as part of its capital allocation strategy.

We believe our platform is differentiated from direct token ownership, private digital asset vehicles, exchange-traded products, and operating companies that hold digital assets as part of a diversified treasury strategy. Our objective is not merely to hold BNB passively, but to build the leading public company platform for BNB ownership, treasury management, and participation in the BNB ecosystem.

We acquired Fat Panda Ltd. and related entities ("Fat Panda") on June 6, 2025 and continue to operate its core retail nicotine vape operations in Canada.

Strategic Transformation

Historically, we operated a portfolio of consumer and industrial businesses, including industrial climate control systems for controlled environment agriculture and, more recently, retail operations in the vaping industry. In August 2025, we initiated a strategic transformation by adopting a DAT strategy focused on BNB ("DAT Strategy"). Through our wholly owned subsidiary, CEA BRS LLC, a Delaware limited liability company and the sole stockholder of BNC BNB Cayman, a Cayman Islands exempt company, we seek to build and manage a substantial corporate treasury of BNB, providing institutional-grade exposure to blockchain infrastructure of BNB Chain.

On August 5, 2025, we launched the DAT Strategy following the closing of a private placement that raised approximately $500.0 million in cash and digital assets, with up to $750.0 million of additional proceeds available through warrant exercises (the "PIPE Transaction"). In connection with this strategic shift, we changed our Nasdaq ticker symbol from "VAPE" to "BNC" on August 6, 2025.

This transformation repositioned our legacy operating business into a public-market vehicle centered on BNB. We believe the DAT Strategy gives investors a differentiated way to participate in the growth, usage, and institutionalization of the BNB ecosystem through a U.S.-listed public company structure.

Upon completion of our Strategic Transformation, we operate our business under two segments: our BNB treasury management ("BNB Treasury Management") segment, within which we operate our DAT Strategy, and our retail and industry ("Retail and Industry") segment attributable to our Fat Panda and industrial climate control systems operating businesses.

Overview of the DAT Strategy

We operate the DAT Strategy through our wholly-owned subsidiary, CEA BRS LLC, a Delaware limited liability company, as a special purpose entity to hold and manage certain cryptocurrency assets in accordance with the DAT Strategy.

Our BNB holdings are held in custody through Ceffu, a non-U.S. institutional digital asset custody platform operating within the Binance ecosystem. Ceffu uses multi-party computation wallet infrastructure and maintains segregated account structures designed for institutional holders. While Ceffu operates as a separate entity from the Binance exchange, our custody arrangement creates concentration exposure to the broader Binance ecosystem. Disruptions to Ceffu’s operations, changes in its regulatory status, or adverse developments affecting the Binance ecosystem could materially impact our ability to access, transfer, or liquidate our BNB holdings.

Table of Contents

Key Drivers of Results of Operations

Our BNB Treasury Management segment’s results of operations are influenced by several key factors, including: changes in the market price of BNB and other ancillary digital assets held by us reflected as fair value adjustments recognized under applicable accounting standards for digital assets; the generation of airdrop income; operating expenses associated with maintaining our public company infrastructure; and strategic decisions regarding the acquisition, holding, hedging, pledging, or disposition of digital assets. Because we hold a substantial quantity of digital assets, particularly BNB, changes in the market price of BNB may significantly affect our reported earnings. These fluctuations may not reflect changes in our operating performance but instead reflect market-driven changes in the value of our digital asset holdings.

Digital Asset Market Conditions

The DAT Strategy is designed to accumulate and compound BNB over time, with a focus on growing the 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 U.S. GAAP-reported results in any given quarter — do not alter management’s conviction in the long-term trajectory of BNB and the broader Binance ecosystem. We believe that our disciplined approach to treasury management positions us to benefit from market recoveries while managing risk through custody, yield optimization, and strategic capital allocation.

Since we launched the DAT Strategy in August 2025, digital asset markets have experienced, and continue to experience, periods of significant price volatility. The market price of BNB has 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 we hold a significant quantity of BNB, changes in the market price of BNB had, and will continue to have, a substantial impact on our balance sheet and results of operations. Investors should consider that fluctuations in our financial results during the period were driven primarily by changes in digital asset market prices and airdrop yield as well as fluctuations in the market price of our common stock rather than changes in our operating activities.

BNB and the BNB Ecosystem

BNB is the native cryptocurrency of BNB Chain, a high-performance, scalable, and interoperable blockchain platform. Originally launched as a utility token to reduce trading fees on the Binance exchange, BNB has evolved into a fundamental asset supporting a broad range of DeFi applications, non-fungible tokens (NFTs), gaming, payments, staking, and governance activities. BNB Chain is fully compatible with the Ethereum Virtual Machine (EVM), allowing developers to build smart contracts and decentralized applications (dApps) using familiar Ethereum tools.

BNB operates on a unique consensus mechanism called Proof of Staked Authority (PoSA), which combines delegated proof of stake with proof of authority, enabling faster transaction finality and lower fees. This design supports thousands of transactions per second with sub-second block times, addressing the scalability and high-fee challenges seen in other blockchain networks. Gas fees on BNB Chain remain low, around $0.01 per transaction, facilitating wide user participation and enabling micro-transactions.

The BNB ecosystem includes several integrated chains—BNB Smart Chain for general dApps, opBNB with optimistic rollups optimized for DeFi and gaming, and BNB GreenField which offers decentralized storage solutions giving users full control over their data. This vertically integrated structure meets diverse needs such as scalability, privacy, cost efficiency, and data decentralization without requiring bridges to external networks. BNB serves multiple vital functions:

●Paying transaction fees (gas) across the BNB Chain ecosystem,

●Staking to secure the network,

●Participating in network governance,

●Enabling access to Binance Launchpad and other Binance services, and

●Supporting DeFi protocols and NFT marketplaces within the ecosystem.

The ecosystem benefits from Binance's position as the world's largest cryptocurrency exchange, providing seamless exchange-to-blockchain onboarding and synergistic token utility that boosts demand for BNB. Recent upgrades in 2025 include faster sub-second transaction speeds, gasless transactions via an expanded “megafuel” system allowing fees in stablecoins or BEP-20 tokens, anti-MEV protections to secure transactions, and native liquid staking that enhances validator participation and network security.

~~Headquartered in~~Table ~~Colorado, we aim to provide customers with a variety~~ of value-added technology solutions that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy the evolving state and local codes, permitting and regulatory requirements. We offer our customers a variety of service and product offerings that include: (i) air handling equipment and systems, (ii) air sanitation products, (iii) LED lighting, and (iv) benching and racking solutions for indoor cultivation.Contents

~~CEA growers~~Binance's ~~currently~~BNB ~~face~~burn policy, implemented using the Auto-Burn system, is a ~~challenging~~deflationary ~~business~~mechanism ~~environment~~designed ~~that~~to ~~includes~~reduce ~~high~~the ~~energy~~total ~~costs,~~supply ~~water~~of ~~usage~~BNB ~~and~~from ~~conservation~~200 ~~issues,~~million ~~continuously evolving~~to ~~waste~~100 ~~removal~~million ~~regulations~~tokens, ~~inflationary~~increasing ~~pressures,~~scarcity ~~and~~to ~~labor~~potentially ~~shortages~~boost value. InSince ~~addition~~December to2021, ~~these~~the ~~issues,~~Auto-Burn ~~our~~system ~~cannabis~~calculates ~~growing~~quarterly ~~customers face~~burns ~~increasingly~~based ~~rigorous~~on ~~quality~~BNB's ~~standards~~price and ~~declining~~BNB ~~cannabis~~Chain ~~prices~~block inproduction, areplacing ~~growing~~the ~~industry~~earlier ~~whose~~method ~~standards~~of using 20% of Binance's profits for buybacks. Burned tokens are ~~constantly~~sent ~~evolving~~to an irretrievable blockchain address, with transactions publicly verifiable for transparency. ~~The~~ ~~part~~Additionally, ofsince November 2021, the ~~CEA~~BEP-95 ~~industry~~upgrade ~~focused~~burns a portion of the gas fees on ~~food~~BNB ~~related~~Chain ~~crops~~in isreal-time, ~~also~~proportional ~~facing~~to ~~disruption~~network ~~from~~activity. ~~evolving~~These ~~market~~transparent ~~demand~~mechanisms reduce circulating supply, ~~competition~~supporting BNB's value, utility, and ~~reorganization~~investor confidence. At June 15, ~~including~~ 2026, approximately 34.8 million BNB remain to be burned to reach the ~~lack~~100 ofmillion ~~growth~~target ~~capital~~after ~~and~~the ~~several~~most ~~noteworthy~~recent ~~bankruptcies~~quarterly burn of 1,569,307 BNB in April 2026.

~~Recent Developments~~While –the ~~Acquisition~~Binance ecosystem continues to grow rapidly with expanding developer activity, diverse use cases, and increasing institutional interest, it faces risks common to the crypto space—regulatory uncertainties, technological competition, and market volatility. In addition, a significant majority of ~~Fat~~the ~~Panda~~daily BNB trading volume occurs on the Binance Exchange, which is controlled by Binance, the original distributors of BNB. Further, most of the BNB in circulation has been reported to be held by the founder and former controller of Binance. As a result, trading activity by these parties could impact the price and trading volume of BNB on the Binance Exchange. While Binance and its former controller have indicated that they and their respective related entities do not actively trade BNB or undertake gross or net purchasing activities to support its price or increase trading volume, publicly available information is insufficient to enable a conclusion as to whether trading activity in BNB on the Binance Exchange by such parties (or others) is occurring in compliance with the Binance Exchange’s policies and procedures or having a material impact on the price and trading volume of BNB on the Binance Exchange or other secondary markets. Additionally, to our knowledge, Binance and its founder are not subject to trading restrictions in respect of BNB going forward; as such, prior conduct and indications of current intent are not necessarily indicative of future trading activities by these parties. Any allegations of BNB price or volume manipulation could result in regulatory actions against such parties and/or loss of confidence in BNB, and/or Binance generally, which could negatively impact the price of our common stock. Our dependence on Binance and its affiliates for the health and credibility of the BNB ecosystem also subjects us to material counterparty, reputational, and regulatory risks outside of our control. Binance's commitment to ongoing roadmap improvements, including AI integration and upgraded security protocols, aims to sustain its competitive edge and address evolving challenges.

~~We have~~Overall, ~~entered~~BNB ~~into~~and anthe ~~acquisition~~BNB ~~agreement~~ecosystem tooffer ~~acquire~~ a ~~group~~robust, ofscalable, ~~Manitoba~~and ~~corporations~~cost-effective ~~that~~blockchain ~~own~~platform ~~all~~with ~~the~~deep ~~assets~~integration ~~used~~into in the ~~business~~global ~~of Fat~~crypto ~~Panda Ltd. (“Fat Panda”). Fat Panda is engaged in the manufacture~~economy, ~~distribution~~making ~~and~~it ~~retail~~a ~~sale~~critical ofinfrastructure ~~e-cigarettes,~~for ~~vape devices~~decentralized ~~and~~applications ~~e-liquids~~ and ~~related~~digital ~~products~~asset ~~through~~innovation ~~multiple retail locations~~ in ~~the~~2026 ~~provinces of Manitoba, Ontario,~~ and ~~Saskatchewan, Canada, as well as through its online e-commerce site~~beyond.

~~Fat Panda,~~Asset weManagement believe, is central Canada’s largest retailer and manufacturer of e-cigarettes, vape devices and e-liquids, with a market share exceeding 50% in the region. Fat Panda operates 33 retail locations, including 29 Fat Panda stores and four Electric Fog vape outlets. Fat Panda also serves a wide range of customers through its online e-commerce platform. Its retail footprint is complemented by a comprehensive portfolio of products, including its own line of premium e-liquids manufactured in-house, along with a robust portfolio of trademarks and intellectual property.Agreement

~~The acquisition~~In ~~will~~connection ~~include~~with ~~all~~ the ~~assets~~PIPE ~~of Fat Panda~~Transaction, ~~including~~on ~~among other things~~August 5, ~~the leases for the retail outlets~~2025, ~~intellectual~~we ~~property, inventory,~~entered ~~government~~into ~~licenses~~an ~~and~~asset ~~permits,~~management ~~franchise~~agreement ~~agreements, manufacturing facilities and supply agreements, which are necessary for~~ (the ~~ongoing~~"AMA") ~~manufacturing~~with ~~and~~10X ~~retail~~Capital ~~operations~~Partners ofLLC ~~Fat Panda. The acquisition will continue~~ (the ~~employment~~"Asset ofManager") ~~the~~pursuant ~~current~~to ~~management and~~which ofwe ~~the~~appointed ~~production and retail staff, for~~ the ~~uninterrupted,~~Asset ~~continuous~~Manager ~~operations~~to ofprovide ~~the~~asset ~~business. The sellers will enter into non-competition agreements at closing. Certain of the senior~~ management ~~persons~~and ~~will~~related ~~enter~~services ~~into~~with ~~employment~~respect ~~agreements~~to ~~for~~our ~~their~~digital ~~continued~~assets ~~employment after~~in ~~the~~accordance ~~closing~~with of the ~~acquisition~~DAT Strategy.

The ~~purchase~~ ~~price~~assets issubject ~~CAD$18,000,000 (approximately, US$12,600,000), payable in cash, securities and seller loans. The Company also expects~~ to ~~borrow part of~~ the ~~cash~~AMA ~~portion~~consist of the ~~purchase~~net ~~price,~~proceeds infrom ~~an amount yet to be determined, which will be secured by~~ the ~~assets~~PIPE ofTransaction ~~Fat Panda.~~as ~~The~~well ~~purchase~~as ~~price~~any ~~includes~~other ~~an initial~~ cash ~~payment~~or ofdigital ~~CAD$13,900,000,~~assets ~~issuance~~we ofdesignate ~~39,000~~as ~~shares~~part of ~~the~~our ~~common~~DAT ~~stock~~treasury ~~of the Company with an agreed aggregate value of CAD$700,000 (approximately CAD$18.00 per share),~~ and ~~issuance~~are ofheld ~~notes to the sellers~~ in ~~the~~cryptocurrency ~~aggregate principal amount of CAD$2~~wallets,~~060,000,~~ ~~and~~with ~~release~~custody ofmaintained by a ~~CAD$100,000~~custodian ~~due~~acceptable ~~diligence deposit. The Company is also agreeing~~ to ~~pay certain financial statement audit expenses of~~ the ~~selling parties. Of the notes to be issued by Fat Panda to the selling parties, one of the notes in the principal amount of CAD$1,030,000, is convertible into the common stock of the~~ Company's atStrategic aCommittee ~~conversion rate~~ of ~~USD$19.00~~our ~~per~~board ~~share. At closing the following will occur: first, a portion~~ of ~~the~~directors ~~cash purchase price in~~ (the amount of CAD$1,375,000 will be held in a joint escrow account for 120 days after closing as a working capital adjustment escrow; second, the sum of CAD$1,240,000, will be paid into escrow for possible indemnity claims to be held for 18 months; and third, the purchase price will be reduced by CAD$112,500 and the sum of CAD$112,500 will be paid into escrow to be held for 18 months, both in relation to employee obligation claims under Canadian employment law"Board").

~~Completion of~~On ~~the~~May 22, ~~acquisition~~2026, iswe ~~subject~~filed to a ~~number~~complaint ofagainst ~~conditions,~~our ~~which~~Asset ~~include~~Manager ~~the~~in ~~preparation and delivery of~~ the ~~Fat~~United ~~Panda~~States ~~companies~~District ~~audited~~Court ~~consolidated~~for ~~financial statements and unaudited interim consolidated financial statements, satisfaction of~~ the ~~financial condition~~District of ~~Fat Panda~~Delaware, ~~completion~~regarding ~~of due diligence by~~ the ~~Company, receipt of all necessary government approvals and licenses, and continuation and reformation of the various retail location leases~~AMA. ~~Completion~~The iscomplaint ~~also~~seeks ~~subject to the Company obtaining financing for~~ a ~~portion~~declaration ofthat the ~~cash~~AMA ~~purchase~~is ~~price.~~void ~~The~~from ~~acquisition~~inception ~~agreement~~as ~~also~~unconscionable ~~provides for the selling persons to make representations~~ and ~~warranties~~orders ~~and~~all ~~undertake~~fees ~~certain~~we ~~covenants~~paid ~~about~~to ~~many~~our ~~aspects~~Asset ofManager under the ~~business~~AMA ofsince ~~Fat~~inception ~~Panda that shall~~ be ~~true~~returned ~~and correct and performed at or prior~~ to ~~closing~~us. ~~The representations~~Alternatively, ~~warranties~~the ~~and~~complaint ~~covenants~~seeks ~~are~~a ~~those~~declaration that ~~are~~a ~~typical~~liquidated indamages ~~relation~~clause toin the ~~acquisition~~ ~~of an operating business. The Company has also made certain representations~~AMA, ~~warranties and covenants, the principal one of~~ which iswould toaccelerate ~~obtain~~nearly ~~financing~~20 ~~for~~years ~~a part~~ of ~~the~~future ~~purchase~~fees ~~price~~upon termination, ~~which~~is ifan ~~not~~unenforceable ~~obtained will permit the Company to terminate the purchase agreement~~penalty.

Prior to our complaint, the Asset Manager was compensated according to a management fee schedule set forth in the AMA and was also entitled to a one-time issuance of warrants to purchase shares of our common stock equal to 2% of the aggregate number of shares and certain pre-funded warrants ("Pre-funded Warrants") issued in the PIPE Transaction. We were responsible for all reasonable and documented expenses related to the operation of the DAT Strategy, including custodial, banking, brokerage, transaction, and other related fees. The Asset Manager does not provide advice regarding securities, and the arrangement is structured to avoid the inclusion of securities as defined under the Investment Advisers Act of 1940.

The AMA has a term of twenty years. Under the terms of the AMA, for which we've sought relief as an unenforceable penalty, we are required to pay the Asset Manager all fees and other compensation that would have accrued through the end of the term as liquidated damages, paid monthly, if we terminate the AMA prior to the end of the term for any reason, including termination for breach, or if the Asset Manager terminates due to a material breach by us. The Asset Manager may terminate the agreement at any time for any reason with at least 120 days' prior written notice.

~~The Company~~Table ~~anticipates that it will complete the acquisition in the first half~~ of ~~fiscal year 2025.~~Contents

~~Shares~~ The Asset Manager is not authorized to act as custodian of our ~~common~~assets, ~~stock~~nor ~~and~~to ~~warrants~~take ~~currently~~possession ~~are~~or ~~traded~~title onto ~~the~~any ~~Nasdaq~~assets. ~~Capital~~The ~~Markets~~Asset ~~under~~Manager may provide similar services to other clients, and the ~~ticker~~Asset ~~symbols~~Manager ~~“CEAD”~~or its affiliates may engage in transactions for their own accounts. The AMA contains customary representations, warranties, confidentiality, indemnification and ~~“CEADW”~~limitation of liability provisions, ~~respectively~~ and is governed by the laws of the State of Delaware.

~~Our Current~~Overview ~~CEA~~of ~~Services~~Retail and ~~Equipment~~Industry ~~Solutions~~Business

Our ~~goal~~ isRetail ~~to develop relationships with our prospects~~ and ~~customers~~Industry ~~that~~segment ~~will~~includes ~~afford~~Fat usPanda's ~~the~~retail ~~opportunity to provide comprehensive services~~ and ~~equipment~~distribution ~~for~~operations ~~the~~along ~~complete~~with ~~lifecycle~~revenue ofand ~~indoor~~operating ~~agriculture~~costs ~~facilities.~~related ~~This~~to ~~lifecycle includes~~ designing, ~~and~~ engineering ~~the facility~~, ~~providing~~ ~~the many required infrastructure technologies, advising on~~ and ~~ensuring~~selling ~~proper~~industrial ~~installation~~climate ofcontrol ~~the~~systems ~~technologies, providing training and start-up support, and ultimately providing preventative and other ongoing services~~ for ~~ensuring~~the ~~proper~~controlled ~~maintenance~~environment ~~and~~agriculture ~~operations~~industry.

~~We provide~~Description ~~a comprehensive range~~ of ~~service~~Fat ~~solutions~~Panda's that include facility design and budgeting, equipment selection and specification, equipment installation advisory, and preventative maintenance services. In addition, we provide our customers with product offerings that include both proprietary products and value-added reseller (“VAR”) products.Business

~~Our CEA~~In ~~Customers~~June 2025, we acquired Fat Panda, a retailer and ~~Prospects~~manufacturer of e-cigarettes, vape devices and e-liquids. The acquisition included all the assets of Fat Panda, including among other things, the leases for the retail outlets, intellectual property, inventory, government licenses and permits, franchise agreements, manufacturing facilities and supply agreements, which are necessary for the ongoing manufacturing and retail operations of Fat Panda.

~~We aim~~Fat toPanda ~~provide~~is ~~our~~one ~~services~~of Central Canada’s largest retailer and ~~products~~manufacturer toof ~~customers~~e-cigarettes, ~~who~~vape ~~are~~devices ~~building~~and e-liquids, ~~upgrading~~with a substantial market share. At April 30, or2026, ~~expanding~~Fat anPanda ~~indoor~~operates ~~cultivation~~34 ~~facility~~retail ~~for~~locations, ~~any crop.~~including ~~Our~~30 ~~customers~~Fat ~~vary~~Panda ~~based~~stores onand ~~the~~4 ~~size~~Electric ofFog vape outlets, in the ~~facility~~provinces of Manitoba, ~~type~~Ontario and Saskatchewan. Fat Panda also serves a wide range of ~~crop~~customers ~~being~~through ~~cultivated~~its online e-commerce platform. Its retail footprint is complemented by a comprehensive portfolio of products, ~~and~~including ~~extent~~its own line of ~~construction~~premium ore-liquids ~~retrofitting~~ manufactured in-house, along with a robust portfolio of ~~the~~trademarks ~~facility~~and intellectual property.

~~Most of~~As ~~our~~Central ~~customers~~Canada’s ~~are~~first ~~new~~dedicated ~~entrants~~vaping toproduct ~~the~~retailer, ~~CEA~~Fat ~~industry~~Panda's ~~and~~inventory ~~have~~consists nosolely ~~other~~of ~~cultivation~~high-quality ~~facilities~~vaping goods. ~~Some~~This ~~customers~~allows ~~have~~for ~~one~~dedicated orinvestment ~~more~~of ~~facilities which~~funds wetoward ~~classify~~vaping asproducts, ~~MFOs~~yielding ~~(multi~~a market-~~facility~~leading ~~operators).~~catalogue Weof ~~currently~~hundreds doof ~~not~~various ~~have~~devices, ~~projects~~and ~~with~~a countless array of flavors to suit a diverse clientele base. Over the ~~largest~~years, ~~publicly~~Fat ~~traded~~Panda ~~firms~~has ~~(typically referred~~established toa ashighly ~~“MSOs~~loyal customer base by curating a product lineup that considers multiple factors including familiarity with vaping systems,” orprevious ~~Multi-State~~nicotine ~~Operators)~~dependence, and ergonomics, among other product elements.

~~Competition~~ Over the last decade, Fat Panda has invested heavily in its in-house manufacturing of e-liquids, allowing it to drastically reduce the ~~CEA~~cost ~~Market~~of the highest value commodity in its product offering. With proprietary recipes, and exclusivity to only Fat Panda retail outlets (where applicable), consumer retention is high with the uptake of Fat Panda's own house-line of products. Furthermore, wholesale of these goods is allowed to alternate retailers in regions where a Fat Panda is not located, which Fat Panda believes acts as a feeder for expanded representation and marketing of the Fat Panda brand.

~~Our environmental~~Located ~~control~~in ~~systems~~the ~~and~~geographic ~~our~~center ~~related~~of ~~engineering~~Canada, ~~and~~Fat ~~design~~Panda's ~~services~~headquarters ~~compete~~in ~~with various national and local Mechanical~~Winnipeg, ~~Electrical &~~Manitoba ~~Plumbing (MEP) engineering firms. We~~ also ~~compete~~acts ~~with~~as ~~national~~the ~~and~~central ~~local~~distribution ~~HVACD~~hub ~~contractors and traditional HVACD equipment suppliers who resell, design, and implement climate control systems~~ for ~~commercial~~all ~~and~~locations ~~industrial~~in ~~facilities, but most of whom do not have~~ the ~~specific~~ ~~knowledge~~retail ~~that we have about the complexities and challenges of CEA facilities~~chain. WeEach ~~have~~satellite ~~positioned~~location ~~ourselves~~receives toone ~~differ~~shipment from ~~these~~ ~~competitors~~the bywarehouse ~~providing~~every aone ~~broad~~to ~~range~~two ofweeks engineering and design services and environmental control systems, across most major HVACD solutions, including chilled water systems, custom air handling units, split systems, and packaged roof-top units. Each is tailored specifically for ~~managing~~all ~~the~~goods ~~distinct~~manufactured ~~challenges involved~~ in ~~CEA facilities. We believe our industry~~-~~specific applications and experience in the CEA market allow us to deliver the right solution to our cultivation customers~~house. ~~Unlike~~Third ~~many~~party ofgoods ~~our competitors, our solutions~~ are ~~designed~~shipped ~~specifically~~direct ~~for~~from ~~cultivators~~external tosuppliers ~~provide tight temperature~~ and ~~humidity~~can ~~control,~~occur ~~reduce~~as ~~bio-security~~often ~~risks,~~as ~~reduce energy requirements~~necessary, ~~and~~allowing ~~minimize~~for ~~maintenance~~enhanced ~~complexity,~~turnover ~~costs~~ and ~~downtime.~~manageable ~~However,~~inventory welevels ~~are~~per ~~seeing more competitors enter the CEA market, focused on emulating the same types of crop-specific climate control systems and engineering services that we offer~~location. We believe this increased competition may adversely impact our ability to obtain new facility projects from both MFOs and independent smaller growers and could require us to accept lower gross margins on our projects.

~~Intellectual Property~~Fat Panda's webstore provides another distribution channel direct from the warehouse, with an expanding catalogue and attractive potential for growth. Online sales compliment retail store operations and generally operate with lower costs.

~~In our~~Being ~~business~~one ~~operations, we generally rely on a combination~~ of ~~patent~~the ~~and~~earliest ~~trademark~~entrants ~~rights,~~in ~~licenses,~~the ~~trade~~Central ~~secrets,~~Canadian ~~and~~market ~~laws~~in ~~that protect intellectual property~~2013, ~~confidential~~Fat ~~procedures,~~Panda ~~and~~was ~~contractual~~able ~~restrictions~~to ~~with~~establish ~~our~~itself ~~employees~~as ~~and~~the ~~others~~only todedicated ~~establish~~retailer ~~and~~of ~~protect~~vaping ~~our intellectual~~products ~~property~~at ~~rights~~the time. ~~While~~Operating wevirtually ~~have~~alone ~~several~~in ~~issued~~the ~~patents~~space, wea domonopolistic ~~not~~scenario ~~believe~~provided ~~that~~the ~~these~~revenue ~~issued~~and ~~patents~~resources ~~currently~~for ~~provide~~reinvestment ~~us with~~to aopen ~~meaningful~~multiple ~~competitive~~locations ~~advantage.~~before Weany ~~have~~substantial ~~registered~~competitor ~~trademarks~~was ~~around~~able ~~our~~to ~~core~~enter ~~Surna brand in~~ the ~~United~~market. ~~States~~As ~~and~~a ~~select foreign jurisdictions~~result, ~~as well as~~ the ~~Surna~~brand ~~logo~~became ~~and~~synonymous ~~the~~with ~~combined~~vaping ~~Surna~~goods ~~logo and name~~ in the ~~United~~region, ~~States.~~paving ~~Our~~the ~~Surna~~way ~~trademark~~for isfuture ~~also~~success ~~registered in~~and ~~the~~recognition ~~European~~as ~~Union~~Fat ~~and~~Panda ~~Canada.~~expanded Wegeographically ~~also~~outwards ~~recently~~from ~~secured~~Winnipeg. ~~trademark~~This ~~registration~~is ~~for~~evident ~~our~~as ~~proprietary~~on ~~SCA~~many ~~platform~~occasions, ~~SentryIQ,~~a incompetitor ~~the United~~will ~~States~~attempt ~~and Canada. Subject~~ to ~~ongoing~~disrupt ~~use~~a ~~and~~specific ~~renewal,~~market ~~trademark~~by ~~protection~~establishing isnear ~~potentially~~a ~~perpetual.~~Fat WePanda ~~actively~~retail ~~protect our inventions~~store, ~~new~~but ~~technologies,~~the ~~and~~Fat ~~product~~Panda ~~developments~~location byexperiences ~~maintaining~~no ~~trade~~or ~~secrets~~only ~~and,~~a inminor ~~limited~~drop ~~circumstances,~~in ~~filing~~business ~~for~~at ~~patent protection~~said location.

Similarly, taking into account the preferences of different clientele, Fat Panda acknowledges that although the aim of its locations is to encourage any and all types of clients to visit, some clients prefer an alternative aesthetic and product offerings. Research is continuous on other retail chains that have established within the same market, with focus on four nearby competitors that may be considered as holding sizable market share. Exploration into synergies, or mergers may be considered in the future.

Description of Industrial Climate Control System Business

Our legacy operating business seeks to develop relationships with our customers that will lead to the provision and supply of capital equipment for the construction lifecycle of indoor agriculture facilities. This entails establishing ourselves as subject matter experts to provide education and support to our clients, advising on and assisting with proper installation of the technologies, providing start-up support, and providing ongoing technical support for ensuring proper maintenance and operations, which often leads to additional equipment or parts sales.

~~Employees~~Table of Contents

We ~~currently~~ ~~have~~provide 6a ~~active~~comprehensive ~~full-time~~range ~~employees.~~of Weservice ~~review~~solutions ~~our~~that ~~staffing~~include ~~needs~~assistance inwith ~~light~~facility ofdesign ~~our contract obligations~~ and ~~attempt~~budgeting toin ~~size~~cooperation ~~and skill~~with ~~match~~the ~~our~~customers' ~~employees as required. However~~engineering, wearchitectural ~~may engage,~~ and ~~have~~construction ~~in the past utilized~~teams, ~~the~~equipment ~~services~~selection ofand ~~consultants~~specification, ~~independent contractors,~~ and ~~other~~support ~~non-employee~~for ~~professionals.~~equipment ~~Additional~~installation ~~employees~~and ~~may~~start beup. ~~hired~~We inprovide ~~the~~our ~~future~~customers ~~depending~~with onproduct ~~need,~~offerings ~~available~~that ~~resources, and~~are ~~our~~primarily ~~achieved~~value-added ~~growth~~reseller products.

~~The Company~~We ~~has~~aim ~~experienced~~to aprovide ~~decline~~our inservices ~~activity,~~and asproducts ~~indicated~~to incustomers ~~its~~who ~~2024~~are ~~sales~~building, ~~and~~upgrading, ~~its~~or ~~current~~expanding ~~backlog.~~an ~~This~~indoor ~~decline~~cultivation isfacility ~~due~~for toany ~~many~~crop. ~~factors, including~~Our ~~(i)~~customers ~~recent~~vary ~~challenges~~based inon the ~~cannabis~~size ~~market,~~of ~~(ii)~~the ~~continued~~facility, ~~supply~~type ~~chain-related delays and cancellations that have affected many~~ of ~~its~~crop ~~vendors~~being ~~and partners~~cultivated, and ~~(iii)~~extent aof ~~broader~~construction ~~slowdown~~or inretrofitting of the ~~macroeconomic environment~~facility.

~~US Government~~Many ~~Regulation~~of inour ~~Relation~~customers are new entrants to ~~Cannabis~~the controlled environment agriculture industry and have no other cultivation facilities. Many other customers have one or more facilities which we classify as multi-facility operators, though we currently do not have projects with the largest, publicly traded multi-state operators.

~~While we~~In doour ~~not~~business ~~generate~~operations, ~~any~~we ~~revenue~~generally ~~from~~rely ~~the~~on ~~direct~~a ~~sale~~combination of ~~cannabis~~patent ~~products,~~and wetrademark ~~have~~rights, ~~historically~~licenses, ~~and~~trade ~~continue to~~secrets, ~~offer our services~~ and ~~engineering~~ ~~solutions~~laws ~~to indoor cultivators~~ that ~~are~~protect ~~engaged~~intellectual inproperty, ~~various~~confidential ~~aspects~~procedures, ofand ~~the~~contractual ~~cannabis~~restrictions ~~industry.~~with ~~Cannabis~~our isemployees aand ~~Schedule~~others Ito ~~controlled substance~~establish and isprotect ~~illegal~~our ~~under~~intellectual ~~federal~~property ~~law~~rights. ~~Even~~We inhave ~~those~~registered ~~states~~trademarks inaround ~~which~~our ~~specific~~core ~~uses~~Surna ofbrand ~~marijuana~~as ~~have~~well ~~been legalized, such~~ as ~~medical marijuana~~the orSurna ~~for~~logo ~~adult~~and ~~recreational~~combined ~~purpose,~~Surna ~~its~~logo ~~use~~and ~~remains~~name ain ~~violation~~the ofUnited ~~federal laws~~States.

~~A Schedule~~Board ICommittee ~~controlled~~Reconstitution ~~substance is defined as a substance that has no currently accepted medical use in the United States, a lack of safety for use under medical supervision~~ and aShareholder high potential for abuse. The Department of Justice defines Schedule I controlled substances as “the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence.” If the federal government decides to enforce the Controlled Substances Act with respect to cannabis, persons that are charged with distributing, possessing with intent to distribute, or growing cannabis could be subject to fines and terms of imprisonment, the maximum being life imprisonment and a $50 million fine. Any change in the federal government’s enforcement of current federal laws could cause significant financial damage to us. While we do not intend to harvest, manufacture, distribute or sell cannabis or cannabis products, we may be irreparably harmed by a change in the enforcement of cannabis laws by the federal or state governments.Activism

~~In the~~During ~~past,~~ the ~~Obama~~fourth ~~administration~~quarter, ~~took~~ the ~~position~~Board ~~that~~has ittaken ~~was~~steps ~~not an efficient use of resources~~ to ~~direct~~reconstitute ~~federal~~all ~~law~~four ~~enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution~~ of ~~medical~~its ~~marijuana.~~standing ~~The~~committees ~~Trump administration~~– ~~revised this policy but made no major changes in enforcement through Attorney General Jeffrey Sessions rescinding~~ the ~~Cole~~ ~~Memorandum. Although President Biden stood for decriminalization and descheduling during his campaign~~Audit, his administration has not formulated an explicit policy on cannabis. The Biden administration has implemented pardons for past federal cannabis possession convictions and encouraged governors to do the same. AlsoCompensation, inNominating ~~May 2021 the Drug Enforcement Administration approved licensed facilities to grow cannabis for the purpose of medical research,~~ and ~~on December 2~~Governance, ~~2022, President Biden signed the Medical Marijuana~~ and ~~Cannabidiol~~Strategic ~~Research~~Committees ~~Expansion Act. This act is “the first standalone marijuana~~-~~related~~ ~~bill~~with ~~approved~~three byfully ~~both~~independent ~~chambers of the United States Congress” and allows medical marijuana research~~directors. The ~~act~~Board ~~requires~~believes ~~the~~this ~~Drug~~action ~~Enforcement~~reinforces ~~Administration~~its tocommitment ~~register researchers and suppliers of cannabis for medical research in a timely manner, who will then be able~~ to ~~legally~~strong ~~manufacture,~~corporate ~~distribute,~~governance ~~dispense~~ and ~~possess~~shareholder ~~the~~accountability ~~substance. It also creates a mechanism for FDA approval of drugs derived from the cannabis plant~~ and ~~“protects~~reflects ~~doctors who may now discuss~~ the ~~harms~~Board’s ~~and~~ongoing ~~benefits~~focus ofon ~~using~~aligning ~~cannabis~~its ~~and~~structure ~~cannabis~~with ~~derivatives.”~~best Itpractices also requires the Department of Health and Human Services to investigate the medical utility of cannabis and barriers that exist to conducting research and requires the U.S. Attorney General to conduct an annual review to ensure that cannabis is being adequately produced for ~~research~~public ~~purposes~~companies. In January 2023, the FDA stated that given the growing cannabidiol (CBD) products market, it had convened a high-level internal working group to explore potential regulatory pathways for CBD products and is prepared to find a new regulatory pathway for CBD to balance individuals’ desire for access to CBD products with the regulatory oversight needed to manage risks.

As a result of these governance enhancements and with the termination of an agreement between the Asset Manager and YZi Labs Management Ltd. (“YZi Labs”), as previously disclosed in public statements, the Company, through the Strategic Committee of the Board, had attempted to renegotiate the terms of the AMA with the goal of achieving market standard arms-length terms, including term, termination rights, reduced management fees, and performance obligations, for the benefit of all Company stockholders. 10X did not agree to any of these proposed amendments. On May 22, 2026, the Company filed a complaint against 10X in the United States District Court for the District of Delaware regarding the AMA. The complaint seeks a declaration that the AMA is void from inception as unconscionable and orders all fees paid by the Company to 10X under the AMA since inception be returned to the Company. Alternatively, the complaint seeks a declaration that a liquidated damages clause in the AMA, which would accelerate nearly 20 years of future fees upon termination, is an unenforceable penalty. A summary of the material terms of the AMA was included in the Current Report on Form 8-K filed on August 8, 2025.

On March 13, 2026, the Company received a letter from YZi Labs that requested that we fix a record date for determining the stockholders entitled to consent to (1) repeal any provision of our 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 our directors. The Board will review YZi Labs’ letter to evaluate its validity under the Bylaws, and if such letter is valid we will disclose the record date for determining the stockholders entitled to consent to YZi Labs’ proposals.

Recent Developments

Restatements

On June 11, 2026, the management of the Company, with the concurrence of the Audit Committee of the Board of Directors, concluded that the previously issued condensed consolidated financial statements included in the Company's quarterly reports on Form 10-Q for the (i) three months ended October 31, 2025, the period from June 7, 2025 through October 31, 2025 (the “Second Quarter Successor” period) and the period from May 1, 2025 through June 6, 2025, originally filed with the SEC on December 15, 2025 (the “Second Quarter Form 10-Q”) and (ii) three months ended January 31, 2026 and the period from June 7, 2025 through January 31, 2026 (the “Third Quarter Successor” period) and the period from May 1, 2025 through June 6, 2025, originally filed with the SEC on March 16, 2026 (the “Third Quarter Form 10-Q” and together with the Second Quarter 10-Q, the “Quarterly Reports on Form 10-Q”) should no longer be relied upon.

~~Currently, there~~Table is much legislation being considered to reform cannabis products and use. The proposed laws cover a wide spectrum from complete federal legalization to specific industry nuances. In September 2023, the MORE Act was introduced that would provide full federal legalization through descheduling with a particular focus on equity provisions, including expungement for certain cannabis offenses and a community reinvestment program. The MORE Act has not passed through committee. There are two proposed federal bills that would remove cannabis from the Controlled Substances Act (CSA) entirely and task the Food and Drug Administration (FDA) with regulation of cannabis products. One of these bills, The States Reform Act, adopts a dual federal-state regulatory model, like the regulation of alcohol. Another bill, the Strengthening the Tenth Amendment Through Entrusting States (STATES) 2.0 Act, would permit states to to maintain the prohibition of cannabis, but interstate commerce in state-law-compliant cannabis would be legalized, so non-legal states would not be able to prohibit shipments to and from legal states from crossing through their borders. Finally, only one piece of legislation took the rescheduling approach to cannabis legalization in 2023. The Marijuana 1-to-3 Act of 2023, opens new tab would simply direct the Attorney General to transfer cannabis from Schedule I to Schedule III of the CSA without clarifying or addressing any other provisions of federal law. However, that was not the only piece of rescheduling-related legislation introduced last year.Contents

~~Lawmakers continued~~The toconclusion ~~offer~~was ~~various~~based ~~solutions~~on ~~for~~the ~~providing~~identification ~~financial~~of ~~relief~~an ~~for~~error ~~cannabis~~in ~~businesses~~the ~~and~~calculation ~~legal~~of ~~protections~~the ~~for~~weighted-average ~~ancillary~~number ~~businesses~~ of shares outstanding used in ~~2023~~determining basic and diluted EPS. The ~~most~~error ~~well-known~~resulted in an understatement of ~~these~~basic ~~bills~~and isdiluted ~~the~~weighted-average ~~Secure~~shares outstanding, which in turn understated or overstated basic and ~~Fair~~diluted ~~Enforcement~~EPS. ~~Regulation~~For ~~(SAFER)~~the ~~Banking~~three ~~Act~~months ended October 31, ~~which~~2025, ~~would~~basic ~~provide~~and ~~safe harbor~~diluted ~~for~~weighted ~~financial~~average ~~institutions~~number ~~and~~of ~~other~~shares ~~ancillary~~were ~~businesses~~understated ~~that~~by ~~work~~2,214,508 ~~with~~shares ~~cannabis~~and ~~industry~~as ~~clients~~a result, ~~thus~~basic ~~increasing~~and diluted EPS were overstated by $0.21. For the ~~industry’s access~~Second toQuarter ~~traditional~~Successor ~~financial~~period, ~~services~~basic ~~like~~weighted ~~loans~~average shares were understated by 1,857,056 shares and ~~deposit~~diluted ~~accounts.~~weighted ~~Similar~~average toshares ~~SAFER~~were ~~but~~understated ~~with~~by a857,057 ~~narrower~~shares ~~scope~~and as a result, basic and diluted EPS were overstated by $0.45. For the ~~Clarifying Law~~three ~~Around~~months ~~Insurance~~ended January 31, 2026, basic and diluted weighted average number of ~~Marijuana~~shares ~~(CLAIM)~~were ~~Act~~understated ~~would~~by ~~provide~~2,376,236 ashares ~~specific~~and ~~safe~~as ~~harbor~~a ~~for~~result, ~~insurance~~basic ~~companies~~and ~~that~~diluted ~~serve~~EPS ~~the~~were ~~cannabis~~understated ~~industry~~by $0. As08. ~~for~~For ~~financial~~the ~~support~~Third Quarter Successor period, ~~the~~basic ~~Small~~weighted ~~Business~~average ~~Tax~~shares ~~Equity~~were ~~Act~~understated ofby ~~2023~~21,806,662 ~~would~~shares ~~exempt~~and ~~cannabis~~diluted ~~sales~~weighted ~~conducted~~average inshares ~~compliance~~were ~~with~~understated ~~state~~by ~~law from~~21,806,663 ~~the~~shares ~~prohibition~~and ofas a result, basic EPS was overstated by $4.26 Uand diluted EPS was overstated by $4.S21.C. §The ~~280E~~error did not impact the Company's net income (loss), ~~thereby~~total ~~allowing~~assets, ~~businesses~~total toliabilities, ~~deduct~~stockholders’ ~~normal~~equity, ~~business~~revenue, ~~expenses~~cash ~~from~~flows, ~~their~~or ~~taxes~~net income (loss) available to common stockholders in each affected period.

~~During 2023~~On June 23, ~~there~~2026, ~~have~~we ~~been~~restated aour ~~myriad~~previously ofissued ~~additional~~unaudited ~~bills~~condensed ~~introduced~~consolidated ~~that~~financial ~~govern~~statements ~~the expungement and/or sealing of criminal records~~ for ~~non-violent cannabis~~the ~~offenses,~~second ~~legalizing hem~~ and ~~CBD~~third ~~products~~fiscal ~~and~~quarters ~~adding~~of ~~FDA~~2026 ~~regulation~~resulting ~~for~~from ~~these~~an ~~products,~~error ~~facilitating~~in ~~research~~the oncomputation ~~cannabis,~~of ~~access for~~weighted-average ~~veterans~~shares used to ~~medical~~compute ~~cannabis,~~basic and ~~restoring~~diluted ~~eligibility~~earnings ~~for~~(loss) ~~federal~~per ~~employment~~share, ~~and~~which ~~the~~it ~~right~~deemed ofmaterial ~~medical~~on ~~cannabis~~June 11, ~~patient to purchase and possess firearms~~2026.

~~Notwithstanding the~~Nasdaq actions of the Biden administration, it should be expected that the Department of Justice will continue at this time to enforce the Controlled Substances Act with respect to cannabis under established principles in setting their law enforcement priorities to prevent:Compliance

●On ~~the~~May ~~distribution of cannabis products~~7, ~~such as marijuana~~2026, towe ~~minors;~~received ●a ~~criminal~~letter ~~enterprises, gangs and cartels receiving revenue~~ from the ~~sale~~staff of ~~cannabis; ●~~ the ~~diversion~~Listing ofQualifications ~~cannabis~~Department ~~products~~(the ~~from~~"Staff") ~~states~~of ~~where~~The itNasdaq isStock ~~legal~~Market ~~under~~("Nasdaq") ~~state~~notifying ~~law~~us tothat ~~states~~we ~~where~~no itlonger iscomply ~~not~~with ~~legal~~Nasdaq ~~under~~Listing ~~state~~Rule ~~law;~~5620(a) ●for ~~the~~continued ~~use~~listing of ~~state-authorized~~shares ~~cannabis~~of ~~activity~~our ascommon astock, ~~cover~~due orto ~~pretext~~our ~~for~~failure ~~the~~to ~~trafficking~~hold ofan ~~other~~annual ~~illegal~~meeting ~~drugs~~within or12 ~~other~~months ~~illegal~~of ~~activity;~~our ●fiscal ~~violence~~year ~~and~~end. ~~the~~As ~~use~~a ofresult, ~~firearms~~we inhave ~~the~~submitted ~~cultivation~~a ~~and~~plan ~~distribution~~to ofNasdaq ~~cannabis~~to ~~products;~~regain ●compliance. ~~driving~~If ~~while~~Nasdaq ~~impaired~~accepts ~~and~~our ~~the~~plan, ~~exacerbation~~Nasdaq ofcan ~~other~~grant ~~adverse~~an ~~public~~exception ~~health~~of ~~and~~up ~~safety~~to ~~consequences~~180 ~~associated~~calendar ~~with~~days ~~cannabis~~from ~~product~~the ~~usage;~~fiscal ●year ~~the~~ended ~~growing~~April of30, ~~cannabis~~2026, onor ~~public~~until ~~lands;~~October ~~and~~27, ●2026, ~~cannabis~~to ~~possession~~allow orthe ~~use~~Company onto ~~federal~~regain ~~property~~compliance.

~~Since the~~Our ~~use~~plan of ~~marijuana~~compliance iswith ~~illegal~~respect ~~under~~to ~~federal~~the ~~law~~foregoing requirement sets forth, ~~most~~among ~~federally~~other ~~chartered~~things, ~~banks~~a ~~will~~proxy ~~not~~statement ~~accept~~preparation ~~deposit~~and ~~funds~~proxy ~~from~~solicitation ~~businesses~~timeline ~~involved with~~leading ~~marijuana~~to our annual meeting of our shareholders. ~~Consequently,~~We ~~businesses~~cannot ~~involved~~provide inany assurance that the ~~marijuana~~Staff ~~industry~~will ~~generally~~accept ~~bank~~our ~~with~~plan ~~state-chartered~~of ~~banks~~compliance. In the event our plan is not accepted, our securities may be subject to delisting and ~~credit~~we ~~unions~~ will have the opportunity to ~~provide~~appeal ~~banking~~the Staff’s delisting determination to a hearings panel. We expect to organize an annual meeting in the ~~industry~~coming weeks to regain compliance with the applicable Nasdaq Listing Rules.

~~In 2014,~~AMA Congress passed a spending bill containing a provision (the Rohrabacher-Farr amendment and sometimes referred to as the Rohrabacher-Blumenauer Amendment) blocking federal funds and resources allocated under the federal appropriations bills from being used to “prevent such States from implementing their own State medical marijuana laws.” The Rohrabacher-Blumenauer Amendment, however, did not codify any federal protections for medical marijuana patients and producers operating within state law. The Justice Department maintains that it can still prosecute violations of the federal cannabis laws and continue cases already in the courts. The Rohrabacher-Blumenauer Amendment must be re-enacted every year, and it is continued through March 8, 2024. However, state laws do not supersede the prohibitions set forth in the federal drug laws.Litigation

On May 22, 2026, we filed a complaint against the Asset Manager, in the United States District Court for the District of Delaware, regarding the Asset Management Agreement. The complaint seeks a declaration that the Asset Management Agreement is void from inception as unconscionable and orders all fees paid by us to the Asset Manager under the Asset Management Agreement since inception be returned to the Company. Alternatively, the complaint seeks a declaration that a liquidated damages clause in the Asset Management Agreement, which would accelerate nearly 20 years of future fees upon termination, is an unenforceable penalty.

Board and Executive Changes

On May 4, 2026, Anthony K. McDonald, our President and a member of our Board, resigned as our President and as a director of the Company. In exchange for a release of claims and Mr. McDonald’s agreement to certain covenants, including cooperation, Mr. McDonald will receive an aggregate of $0.3 million payable over 12 months and reimbursement for legal fees of up to $10,000. Mr. McDonald’s outstanding equity awards will remain in effect in accordance with their terms.

On June 10, 2026, Nicholas J. Etten, a member of the Board, resigned as a director of the Company. In exchange for a release of claims and Mr. Etten's agreement to certain covenants, including cooperation, Mr. Etten received a payment of $85,000 and will receive reimbursement for legal fees of up to $50,000. Mr. Etten's outstanding equity award will remain in effect in accordance with its terms.

Government Regulations

DAT Strategy

The laws and regulations applicable to BNB and digital assets are evolving and subject to interpretation and change.

Governments around the world have reacted differently to digital assets; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as the U.S., digital assets are subject to overlapping, uncertain, and evolving regulatory requirements.

~~In order~~Table ~~to participate in either the medical or the adult use aspects~~ of the cannabis industry, all businesses and employees must obtain licenses from the state and, for businesses, local jurisdictions as well. As an example, Colorado issues four types of business licenses including cultivation, manufacturing, dispensing, and testing. In addition, all owners and employees must obtain an occupational license to be permitted to own or work in a facility. All applicants for licenses undergo a background investigation, including a criminal record check for all owners and employees.Contents

~~Colorado has~~As ~~also~~digital ~~enacted~~assets ~~stringent~~have ~~regulations~~grown ~~governing~~in both popularity and market size, the ~~facilities~~U.S. Executive Branch, Congress and ~~operations~~a number of ~~cannabis~~U.S. ~~businesses~~federal ~~that~~and ~~are~~state ~~involved~~agencies, ~~with~~including the ~~plant and~~Financial ~~its~~Crimes ~~products.~~Enforcement ~~All~~Network, ~~facilities~~the ~~are~~Commodity ~~required~~Futures toTrading beCommission ~~licensed~~(“CFTC”), bythe SEC, the ~~state~~Financial Industry Regulatory Authority, the Consumer Financial Protection Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS, and ~~local~~state ~~authorities~~financial regulators, have been examining the operations of digital asset networks, digital asset users, and ~~are~~digital ~~subject~~asset exchanges, with particular focus on the extent to ~~comprehensive~~which ~~security and~~digital ~~surveillance~~assets ~~requirements.~~can Inbe ~~addition,~~used ~~each~~to ~~facility~~violate isstate ~~subject~~or federal laws, including to ~~extensive~~facilitate ~~regulations~~the ~~that~~laundering ~~govern~~of ~~its~~proceeds ~~businesses~~of ~~practices~~illegal activities or the funding of criminal or terrorist enterprises, ~~which includes~~and ~~mandatory~~the ~~seed~~safety and soundness and consumer-toprotective safeguards of exchanges or other service-~~sale~~providers ~~tracking~~that ~~and~~hold, ~~reporting~~transfer, ~~health~~trade, or exchange digital assets for users. Many of these state and ~~sanitary~~federal ~~standards~~agencies have issued consumer advisories regarding the risks posed by digital assets to investors. In addition, ~~packaging~~federal and ~~labeling~~state ~~requirements~~agencies, and ~~product testing~~other ~~for~~countries ~~potency~~have issued rules or guidance regarding the treatment of digital asset transactions and ~~contaminants~~requirements for businesses engaged in activities related to digital assets.

~~Laws and~~Depending ~~regulations~~on ~~affecting~~ the ~~medical~~regulatory ~~marijuana~~characterization ~~industry~~of ~~are~~BNB, ~~constantly~~the ~~changing,~~markets ~~which~~for ~~could~~BNB ~~detrimentally~~in ~~affect~~general, and our ~~proposed~~activities ~~operations. Local~~in particular, ~~state~~our business and ~~federal~~the ~~medical~~DAT ~~marijuana~~Strategy ~~laws~~may ~~and~~be ~~regulations~~subject ~~are~~to ~~broad~~regulation inby ~~scope~~one ~~and~~or ~~subject~~more toregulators ~~evolving~~in ~~interpretations,~~the ~~which~~United ~~could require~~States usand toglobally. ~~incur~~Ongoing ~~substantial~~and ~~costs~~future ~~associated~~regulatory ~~with~~actions ~~compliance~~may or alter, ~~our~~to ~~business~~a ~~plan.~~materially Inadverse ~~addition~~extent, ~~violations~~the nature of ~~these~~digital ~~laws~~assets markets, ~~or allegations~~the participation of ~~such~~industry ~~violations~~participants, ~~could~~including ~~disrupt~~service ~~our~~providers ~~business~~ and ~~result~~financial institutions in athese ~~material~~markets, ~~adverse~~and ~~effect on~~ our ~~operations.~~ability Itto ispursue ~~also possible that regulations may be enacted in~~ the ~~future~~DAT ~~that~~Strategy. ~~will~~Additionally, beU.S. ~~directly~~state ~~applicable~~and tofederal ~~our~~and ~~business.~~foreign Weregulators ~~cannot~~and ~~predict~~legislatures ~~the~~have ~~nature~~taken ofaction ~~any~~against ~~future laws,~~industry ~~regulations~~participants, ~~interpretations~~including ordigital ~~applications~~assets businesses, ~~nor~~and ~~can~~enacted werestrictive ~~determine~~regimes ~~what~~in ~~effect~~response ~~additional~~to ~~governmental~~adverse ~~regulations~~publicity orarising ~~administrative policies~~from ~~and procedures~~hacks, ~~when~~consumer ~~and~~harm, ifor ~~promulgated,~~criminal ~~could~~activity ~~have~~stemming onfrom ~~our~~digital ~~business~~assets activity.

~~Item 1A~~The CFTC takes the position that some digital assets fall within the definition of a “commodity” under the Commodity Exchange Act. ~~Risk~~Under ~~Factors~~the Commodity Exchange Act, the CFTC has broad enforcement authority to police market manipulation and fraud in spot digital assets markets in which we may transact.

~~Investing in~~Beyond ~~our~~instances ~~securities~~of ~~involves~~fraud ~~significant~~or ~~risks. Certain factors may have a material adverse effect on our business~~manipulation, ~~financial condition, and results of operations. You should carefully consider~~ the ~~risks~~CFTC ~~and~~generally ~~uncertainties~~does ~~described~~not ~~below,~~oversee incash ~~addition~~or tospot ~~other~~market ~~information contained~~exchanges inor ~~this~~transactions ~~Annual~~involving ~~Report~~digital onasset ~~Form~~commodities ~~10-K,~~that ~~including~~do ~~our consolidated financial statements and related notes. The risks and uncertainties described below are~~ not ~~the~~utilize ~~only~~margin, ~~ones we face. Additional risks and uncertainties that we are unaware of~~leverage, or ~~that~~financing. weIn ~~currently believe are not material~~addition, ~~may~~CFTC ~~also~~regulations ~~become~~and ~~important~~CFTC ~~factors~~oversight ~~that~~and ~~adversely~~enforcement ~~affect~~authority ~~our~~apply ~~business.~~with Ifrespect ~~any~~to ~~of the following risks actually occur~~futures, ~~our~~ ~~business~~swaps, ~~financial~~other ~~condition,~~derivative ~~results~~products ~~of operations,~~ and ~~future~~certain ~~prospects~~retail ~~could~~leveraged becommodity ~~materially~~transactions ~~and~~involving ~~adversely~~digital ~~affected.~~asset Incommodities, ~~that~~including ~~event,~~ the ~~trading~~markets ~~price~~on ofwhich ~~our~~these ~~securities~~products ~~could decline, and you could lose part or all of your investment~~trade.

~~Summary Of~~As ~~Risk~~of ~~Factors~~the ~~Relating~~date hereof, none of the SEC or any other U.S. federal or state regulator has publicly stated whether they agree that BNB is a “security,” and BNB has not yet been classified with respect to the U.S. federal securities laws. Although we believe that BNB is not a “security” within the meaning of the U.S. federal securities laws, and that registration of the Company or its treasury under the Investment Company Act, is therefore not required under applicable securities laws, we acknowledge the uncertainty that a regulatory body or federal court may determine otherwise in the future. If this occurs, we may face legal or regulatory action, even if our ~~Current~~beliefs ~~CEA~~were ~~Operations~~reasonable under the circumstances, and we could be required to register as an investment company under the Investment Company Act.

~~Our CEA~~As ~~business~~noted isabove, ~~subject~~activities involving BNB and other digital assets may fall within the jurisdiction of more than one financial regulator and various courts and such laws and regulations are rapidly evolving and increasing in scope. On January 23, 2025, President Trump issued an executive order titled, Strengthening American Leadership in Digital Financial Technology. While the executive order did not mandate the adoption of any specific regulations, the executive order identifies certain key objectives to aguide ~~number~~agencies involved in crypto regulation, including (i) protecting the sovereignty of ~~risks~~the United States dollar by promoting the development of United States dollar-backed stablecoins, (ii) providing regulatory clarity and ~~uncertainties~~certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including ~~those~~through well-defined jurisdictional regulatory boundaries, and (iii) taking measures to protect Americans from the risks ~~discussed~~of atCentral ~~length~~Bank Digital Currencies. To achieve these objectives, the executive order established a working group on digital asset markets within the National Economic Council, comprised of representatives from key federal agencies, with a tight timeline for examining existing regulations and proposing a new regulatory framework. There have also been several bills introduced in Congress that propose to establish additional regulation and oversight of the ~~section~~digital ~~below~~asset ~~titled “Risk~~markets. ~~Factors~~On July 18, 2025, the Guiding and Establishing National Innovation for U.”S. ~~These~~Stablecoins ~~risks~~Act ~~include~~(the "GENIUS Act") was passed and signed into law of the United States, ~~among~~which ~~others~~directs for a federal regulatory framework for the issuance of "payment stablecoins" that are designed to be used as a means of payment and settlement. The GENIUS Act prescribes a regulatory framework that would further reduce uncertainty of the legal status and treatment of "payment stablecoins" or other digital assets in general and clarify in certain instances that such digital assets would not be treated or regulated as "securities." In addition, the ~~following:~~Digital Asset Market Clarity Act of 2025 (the "CLARITY Act") has passed the U.S. House of Representatives and is currently under consideration in the U.S. Senate. If passed in its current form, the CLARITY Act would grant the CFTC jurisdiction and regulatory authority with respect to "digital commodities," including by establishing new registration requirements for digital commodity exchanges, brokers, and dealers. In addition, the CLARITY Act would amend the Commodity Exchange Act to incorporate "digital commodities" into various aspects of the CFTC’s existing jurisdiction and the regulations promulgated thereunder. If passed, the CLARITY Act could impose additional regulatory requirements on companies holding digital assets as well as their asset managers. For more information regarding the risks related to the DAT Strategy and government regulations, see "Risk Factors" included in this Form 10-K.

● Historically, we have had limited revenues and operated our business with a working capital deficit. Additionally, our operating results have fluctuated over the years. ● We enter into contracts that are performed over a period of time; therefore, we have a contract backlog in differing amounts from quarter to quarter. Converting backlog to revenue depends on many factors, such as the customer obtaining financing, building permits and construction of their facility. We may not be able to convert all of our contracts representing backlog into revenue. We currently do not convert our backlog on a consistent basis quarter to quarter. ● Although we are not cannabis plant or product touching, historically we have provided services and equipment to the cannabis industry segment. As a result, we may be subject to the changes within that sector and certain of the regulations and enforcement issues of the cannabis industry. ● We have material weaknesses in our controls and procedures for financial reporting.

●Table We may not be able to implement a successful growth program and, even if that is successful, we may not manage such a program effectively, which may affect our investors’ return on investment. ● To the extent we continue in the CEA industry, we will need to expand our customer base, expand and develop our products and services and increase marketing and achieve timely contract execution. ● Due to supply disruptions and competing demand for products, we continue to experience supply issues similar to other members of the CEA industry. International trade disputes, tariffs, international shipping and domestic trucking issues all contribute to the challenges we face in obtaining the products we need for contract performance. We have experienced and are likely to continue to experience inflationary effects on the cost of products and labor, which is likely to adversely affect our margins. The failure to procure the products we need to satisfy our customer contracts would disrupt our business, harm our reputation, result in losses and potently cause us to lose our market. ● We rely on third party manufacturers to supply the equipment we sell or lease for our CEA customers. If the equipment does not perform to specifications or to our customers’ satisfaction, there may be an adverse impact on our business and our revenues. ● We rely on a limited number of customers and suppliers. ● The build side of the CEA industry is very competitive. To be able to compete successfully, we will need to offer a wide range of products, have adequate capital for expansion, supply and execution, and develop robust marketing. ● We will need to attract and retain top quality employee talent. We are dependent on certain key sales, managerial and executive personnel for our current and future success.Contents

~~Risk Factors~~Vaping Products

~~Risks Relating~~On May 23, 2018, the Tobacco and Vaping Products Act ("TVPA") became effective, and now governs the manufacture, sale, labeling and promotion of vaping products sold in Canada. The TVPA replaced the former Tobacco Act (Canada) and established a legislative framework that applies to ~~Our~~vaping ~~Current~~products, ~~CEA~~whether ~~Business~~or not they contain nicotine. The TVPA prescribes high-level requirements in relation to vaping products, with regulations governing specific topics such as nicotine concentration and the promotion of vaping products. Other regulations remain forthcoming and there remains a high degree of uncertainty with respect to the compliance landscape for vaping products. As such, there can be no assurance that we will initially be in total compliance, remain competitive, or financially able to meet future requirements administered pursuant to the TVPA. Prior to the TVPA becoming effective, Health Canada had taken the position that electronic smoking products (i.e., electronic products for the vaporization and administration of inhaled doses of nicotine, including electronic cigarettes, cigars, cigarillos and pipes, as well as cartridges of nicotine solutions and related products) fell within the scope of the Food and Drugs Act (Canada) ("Food and Drugs Act"). Vaping products with therapeutic or health-related claims are subject to the Food and Drugs Act and related regulations. Finally, the TVPA provides the authority to make regulations to collect information from the industry about vaping products, their emissions and any research and development (e.g., sales data and information on market research, product composition, ingredients, materials, health effects, hazardous properties and brand elements). Health Canada is currently developing proposed regulations in this area.

~~Our revenues~~On ~~have~~December ~~been~~21, ~~limited~~2019, Health Canada issued a Regulatory Impact Analysis Statement titled "Vaping Products Promotion Regulations." The Impact Analysis addressed two proposed new regulations that would place stricter limits on the advertising and wepromotion ~~will~~of ~~need~~nicotine tovaping ~~obtain~~products ~~financing~~and ~~for~~make ~~any~~health ~~substantive~~warnings ~~growth,~~on nicotine vaping products mandatory (the "Proposed Regulations"). The Proposed Regulations would: (1) prohibit the promotion of nicotine vaping products and ~~possibly~~nicotine ~~our~~vaping ~~continued~~product-related ~~operations~~brand elements by means of advertising that is done in a manner that can be seen or heard by youth, ~~which may~~including ~~not~~the display of nicotine vaping products at points of sale where they can be ~~available~~seen toby usyouth; and (2) require that all nicotine vaping advertising convey a health warning about the health hazards of nicotine vaping product use.

~~Historically~~On July 1, we ~~have~~2020, ~~raised~~Health ~~equity~~Canada’s "Vaping Products Labeling and ~~debt~~Packaging ~~capital~~Regulations" (the "VPLPR") came into effect; requiring (1) all vaping products containing nicotine to ~~support~~display ~~our~~a ~~operations.~~standardized Wenicotine ~~raised~~concentration ~~approximately~~statement ~~$22~~and ~~million~~health ~~from~~warning about the addictiveness of nicotine; (2) products containing nicotine to be packaged in child-resistant containers and display a ~~public~~toxicity ~~offering~~warning ~~completed~~ and first aid treatment statement; and (3) the display of a list of ingredients contained in ~~February~~the ~~2022.~~vaping Assubstances, regardless of ~~December~~nicotine 31content. On July 14, ~~2024~~2020, weHealth ~~had~~Canada ~~working~~issued ~~capital~~a ofguidance ~~approximately~~document $9on vaping products titled,~~064,000~~ ~~and~~"Industry ~~our~~Guide ~~cash~~to ~~balance~~vaping ~~was~~products ~~approximately $9~~subject to the Canada Consumer Product Safety Act" (the "CCPA Guidance"). The CCPA Guidance provided clarity on requirements under the Canada Consumer Product Safety Act ("CCPSA") for vaping products that are manufactured,~~453~~ imported,~~000~~ advertised, or sold in Canada. The CCPA Guidance provided clarity on the requirements of the VPLPR and the authority of the CCPSA to address safety issues posed by a vaping product not marketed for therapeutic use.

~~We expect~~In addition to ~~need~~federal ~~additional~~regulations, ~~funds~~several inprovinces, ~~the~~including ~~longer term~~Alberta, ~~from~~British ~~time~~Columbia, toNova ~~time~~Scotia, toOntario, ~~complete~~Prince ~~aspects~~Edward ofIsland ~~the~~("PEI"), ~~overall~~Quebec ~~development~~and ofSaskatchewan, ~~our~~have ~~business plan,~~passed ~~such~~regulations asfully inrestricting ~~connection~~or ~~with~~limiting the ~~acquisition~~advertising and sales of ~~Fat~~certain ~~Panda~~types ~~and~~of ~~other~~nicotine ~~strategic~~vaping ~~assets~~products. WeMany ~~also~~provinces ~~anticipate~~have ~~needing~~focused ~~additional~~their ~~funds for~~tobacco ~~ongoing~~and ~~operating~~vaping ~~expenses.~~control ~~The~~efforts ~~precise~~on ~~amount~~retail access and ~~timing~~have oftaken ~~our~~action ~~funding~~to ~~needs~~go ~~cannot~~beyond bethe ~~determined~~minimum ~~accurately~~requirements atin ~~this~~the ~~time~~TVPA. For example, Nova Scotia, Newfoundland and ~~will~~ ~~depend~~Labrador, onand athe ~~number~~Northwest Territories, have increased the minimum age of ~~factors~~sale to 19. Notably, ~~including~~in ~~demand~~PEI, ~~for~~as ~~our~~of ~~products~~March ~~and~~1, ~~services~~2020, the ~~success~~minimum ofage ~~our~~for ~~product~~purchasing ~~development~~nicotine ~~efforts~~products increased to age 21. In 2019, British Columbia, Saskatchewan, and Ontario limited the ~~timing~~ sales of ~~receipts~~flavored vaping products with exceptions for ~~customer~~some ~~payments~~flavors to specialty stores, ~~the~~whereas ~~management~~some ofprovinces ~~working~~have ~~capital~~banned flavored vaping products, ~~and~~with the ~~continuation~~exception of ~~normal~~tobacco ~~payment~~flavor ~~terms~~(Nova Scotia and ~~conditions for~~PEI). ~~our~~By ~~purchase~~way of ~~goods~~example, ~~and~~on ~~services.~~August ~~The~~11, ~~continuation~~2020, ofPEI ~~normal~~adopted ~~payment~~a ~~terms~~regulation ~~and~~to ~~conditions~~ban ~~with~~the ~~our~~sale ~~customers~~of ~~and~~all ~~suppliers~~flavored vaping products, ~~including our~~effective ~~ability~~March to1, ~~obtain~~2021. ~~advance~~Quebec ~~payments~~is ~~from~~currently ~~our~~considering ~~customers~~a ban on flavored products and effective as of March 25, ~~significantly~~2022, ~~impacts~~the ~~our~~sale ~~ability~~of toflavored ~~fund~~vapor ~~our~~products ~~ongoing~~was ~~operations~~banned in the Northwest Territories.

~~Any future~~Moreover, ~~equity~~certain ~~offering~~provinces ~~will~~(British ~~result~~Columbia, Newfoundland and Labrador, Saskatchewan, Quebec, Nova Scotia) have implemented an e-cigarette retail licensing system or have guidelines for retailers in ~~dilution~~order to ~~our~~prevent ~~shareholders;~~sales ~~obtaining~~to ~~borrowed~~minors ~~capital~~(Alberta, ~~may~~British ~~not~~Columbia, beNewfoundland ~~possible~~and ~~for~~Labrador, usPEI, Saskatchewan).

~~To the~~Finally, ~~extent~~with ~~that~~respect weto ~~raise~~the ~~equity~~taxation ~~and~~of ~~equity~~vaping ~~linked~~products, ~~securities~~the inCanadian ~~any~~government ~~future~~introduced ~~offerings,~~amendments ~~our~~to ~~existing~~the ~~shareholders~~Excise ~~will~~Act, ~~experience~~2001 ato ~~dilution in~~implement ~~the~~a ~~voting~~new ~~power~~excise ~~and~~duty ~~ownership~~framework ofon ~~their~~vaping ~~common~~products. ~~stock,~~These ~~and~~amendments ~~our~~became ~~earnings~~law ~~per~~on ~~share,~~June ~~if any~~23, ~~would be impacted~~2022. ~~Any~~The ~~borrowings~~new ~~made~~framework applies to ~~finance~~ ~~acquisitions~~vaping ~~and~~products ~~operations,~~that ~~could~~are ~~make~~manufactured usin ~~more~~Canada ~~vulnerable~~or toimported, aand ~~downturn~~that inare ~~our~~intended ~~operating~~for ~~results,~~use ~~a downturn~~ in ~~economic~~a ~~conditions, or~~vaping ~~increases~~device in ~~interest~~Canada. ~~rates~~Manufacturers onof ~~borrowings~~vaping ~~that~~products are ~~subject~~required to ~~interest~~get ~~rate~~a ~~fluctuations.~~vaping ~~The~~product ~~amount~~license ~~and~~from ~~timing~~the ofCanada ~~additional~~Revenue ~~financing needs~~Agency ~~will~~("CRA"). ~~vary~~Importers ~~principally~~are ~~depending~~required onto ~~the~~apply ~~timing~~for ofregistration ~~new~~from ~~product~~the ~~launches,~~CRA. ~~investments~~Manufacturers and~~/or~~ ~~acquisitions,~~importers ~~and~~are ~~the~~also ~~amount~~required ofto ~~cash flow~~register ~~from~~for ~~our~~the ~~operations~~vaping stamping regime. IfAll ~~our~~vaping ~~resources~~products entering the Canadian duty-paid market are ~~insufficient~~required to ~~satisfy~~be ~~our~~packaged ~~cash~~with ~~requirements,~~an weexcise ~~may~~stamp ~~seek~~affixed to ~~issue~~the ~~additional~~product. ~~equity or~~The ~~debt~~excise ~~securities~~stamp orshows ~~obtain~~that aduties ~~credit~~have ~~facility~~been paid.

These developments, together with the passed and proposed federal and provincial regulations may have a material adverse effect on our business, results of operations, and financial condition.

~~There is~~Table noof ~~assurance that we will be able to convert our backlog related to our CEA operations into revenue or make a profit.~~Contents

While we continue our CEA business, we may be unable to convert the full contract value of our backlog in a timely manner, or at all. We inconsistently convert our backlog into revenue on a quarter-to-quarter basis. The performance of our obligations under a sales contract, and the timing of our revenue recognition, is dependent upon our customers’ ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can use our services and take possession of the equipment we provide. Our sales contracts currently are not time specific as to when our customers are required to take delivery of our services and equipment. More recently, we determined that some of our new construction facility projects are becoming larger and more complex and, as a result, delays were more likely due to licensing and permitting, lack of, or delay in, funding, staged facility construction, and/or the shifting priorities of certain customers with multiple facility projects in progress at one time. Even if we obtain more customers, or increase the average size of our projects, there is no guarantee that we will be able to generate a profit. Because we are a small company with limited capital, limited products and services, and limited marketing activities, we may not be able to generate sufficient revenue to operate profitably. If we cannot operate profitably, we may have to suspend or cease operations.Employees

We ~~may~~ ~~extend~~currently ~~credit~~have to48 ~~our~~active ~~CEA~~full-time ~~customers~~employees, 121 active part-time employees, and two independent contractors in the ~~future~~United States and, ifCanada. weWe ~~are~~review ~~unable~~our staffing needs in light of our current and anticipated obligations and attempt to ~~collect~~align ~~these~~headcount ~~accounts~~and ~~receivable~~employee skills accordingly. However, ~~our~~we ~~future~~may ~~profitability could~~engage, and have historically utilized, the services of consultants, independent contractors, and other non-employee professionals. Additional employees may be ~~adversely~~hired ~~impacted~~in the future depending on need, available resources, and our achieved, or near-term anticipated, growth.

~~Historically, we~~Available had little exposure to the collection risk on accounts receivable since we typically received payments from our customers in advance of our performance of services or delivery of equipment. However, in certain situations, especially as we expand our products and services offering for a customer’s entire facility lifecycle, we may extend credit to our customers, in which case we are at risk for the collection of account receivables. Accordingly, we will be at greater risk for the collection of account receivables. Any customer credit arrangements are negotiated and may not protect us if a customer develops operational difficulty or incurs operating losses which could lead to a bankruptcy. In these cases, we may lose most of the outstanding balance due. In addition, we are typically not able to insure our accounts receivables. The risk is that we derive our revenue and profits from selling products and services to the emerging cannabis industry. The failure of our customers to pay the full amounts due to us could negatively affect future profitability.Information

~~Because we~~We ~~currently~~are dosubject ~~not~~to ~~maintain~~the ~~effective~~reporting ~~internal~~requirements ~~controls~~of ~~over~~the ~~financial~~Exchange ~~reporting~~Act, wewhich ~~may~~requires beus ~~unable~~ to ~~accurately~~file ~~report~~ our ~~financial results~~annual orreports ~~prevent~~on ~~fraud~~Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and ~~investor~~amendments ~~confidence~~to such reports and other information with the ~~market~~SEC. ~~price~~Because ofwe ~~our~~file ~~common~~documents ~~stock~~electronically with the SEC, you may obtain this information by visiting the SEC’s website at: www.sec.gov. Our website is located at https://www.ceaindustries.com/. The information on, ~~therefore~~or that may be accessed through, our website is not incorporated by reference into and should not be ~~adversely~~considered ~~impacted~~a part of this report.

Our reporting obligations as a public company place significant requirements on our management, operational and financial resources, and systems, and will continue to do so for the foreseeable future. Annually, we are required to prepare a management report on our management’s assessment of the effectiveness of our internal control over financial reporting. Management has concluded that our internal control over financial reporting is currently not effective. In the event that our status with the U.S. Securities and Exchange Commission (“SEC”) changes to that of an accelerated filer from a smaller reporting company, our independent registered public accounting firm will be required to attest to and report on our management’s assessment of the effectiveness of our internal control over financial reporting. Under such circumstances, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may still decline to attest to our management’s assessment, or may issue a report that is qualified, if it is not satisfied with our controls, or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.

We have identified material weaknesses in our internal control over financial reporting and, if we do not remediate the material weakness or are unable to implement and maintain effective internal control over financial reporting in the future, the accuracy and timeliness of our financial reporting may be adversely affected.

The Company 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 the limitation on the number of our 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. A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis. If we are unable to achieve effective internal control over financial reporting, or if our independent registered public accounting firm determines we continue to have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our shares could decline, and our reputation may be damaged.

~~The inability~~Table toof ~~effectively manage our operational reorganization could harm our business and materially and adversely affect our operating results and financial condition.~~Contents

~~If there~~ITEM is any growth in or reorganization of our business and operations, including integrating any acquired business and assets, it is likely to place a strain on our management and administrative resources, infrastructure and systems1A. WeRISK expect that in those instances we will need to further refine and expand our business development capabilities, our systems and processes and our access to financing sources. We also will need to hire, train, supervise, and manage employees. These processes are time consuming and expensive, will increase management responsibilities and will divert management attention. We cannot assure that we will be able to:FACTORS

●You ~~execute~~should oncarefully ~~our~~consider ~~business~~the ~~plan~~risks ~~and~~described ~~strategy;~~below ●before ~~expand~~making ~~our~~an ~~products~~investment ~~effectively~~decision. orThe ~~efficiently~~risks orand inuncertainties adescribed ~~timely~~below ~~manner;~~are ●not ~~allocate~~the ~~our~~only ~~human~~ones ~~resources~~we ~~optimally;~~face. ●Additional ~~meet~~risks ~~our capital needs; ● identify~~ and ~~hire~~uncertainties ~~qualified~~not ~~employees~~currently orknown ~~retain~~to ~~valued~~us ~~employees;~~ or ●that ~~effectively~~we ~~incorporate~~currently ~~the~~deem ~~components~~to ofbe ~~any~~immaterial ~~business~~also ormay ~~product~~materially ~~line~~and ~~that~~adversely weaffect ~~may~~our ~~acquire~~business, infinancial ~~our~~condition, ~~effort~~operating toresults, ~~achieve~~or ~~growth~~prospects.

~~Our inability~~Summary orof ~~failure~~Risk ~~to manage our company effectively could harm our business and materially and adversely affect our operating results and financial condition.~~Factors

Our ~~operating~~ ~~results~~business ~~may~~is ~~fluctuate~~subject ~~significantly~~to ~~based~~numerous onrisks ~~customer acceptance of our services~~ and ~~products~~uncertainties, ~~industry~~discussed ~~uncertainty,~~in ~~project financing~~more ~~concerns,~~detail ~~and~~in ~~regulatory~~the ~~requirements~~following section. AsThese arisks ~~result~~include, ~~period-to-period~~among ~~comparisons~~others, ofthe ~~our~~following ~~results~~key ~~of operations are unlikely to provide a good indication of our future performance.~~risks:

~~Management expects~~Risks ~~that,~~Relating ~~under typical operating conditions, we will experience substantial variations in our revenues and operating results from quarter~~ to ~~quarter. This variance may change with fundamental changes in our operations, such as~~ the ~~planned~~DAT ~~acquisition of Fat Panda.~~Strategy

~~In our CEA operations, we have been experiencing a decline in revenues, which has also affected our operating results.~~ ●Our ~~revenue~~financial ~~recognition in~~condition ~~our CEA operations~~ is highly dependent ~~upon~~on ~~shipment of~~ the ~~equipment~~market ~~portions~~price of ~~our sales contracts~~BNB, which, inhas ~~many~~historically ~~cases,~~been ~~may~~subject be delayed while our customers complete permitting, prepare their facilities for equipment installation or obtain project financing. Uncertainty in the CEA industry, project financing concerns, and the licensing and qualification of our prospective customers, which are out of our control, make it difficult for us to ~~predict~~significant ~~when we will recognize revenue~~volatility. ~~If customers are unable to obtain licensing, permitting or financing, our sales and revenue will decline, resulting in a reduction in our operating income or possible increase in losses.~~

●Our DAT Strategy is concentrated primarily in a single asset, which subjects us to risks specific to the Binance ecosystem.

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

●Our digital asset holdings’ liquidity may be limited by market conditions.

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

●We are subject to significant competition in the growing digital asset industry and the Company’s business, operating results and financial condition may be adversely affected if the Company is unable to compete effectively.

Risks Relating to Cryptocurrencies

●The further development and acceptance of BNB Chain and other cryptocurrency networks, which represent a relatively new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate.

●The digital asset trading platforms on which cryptocurrency trades are relatively new and largely unregulated or may not be complying with existing regulations.

●The availability of spot exchange-traded products and futures exchange-traded funds for BNB and other digital assets may adversely affect the market price of our common stock.

●The trading prices of many digital assets, including BNB, have experienced extreme volatility in recent periods and may continue to do so.

●We may be subject to regulatory developments related to cryptocurrencies and cryptocurrency markets, which could adversely affect our business, financial condition, and results of operations and the price of our common stock.

●Loss or theft of private keys or breaches of our digital wallets could result in the permanent loss of our BNB and materially adversely affect our business.

●The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of BNB and adversely affect our business.

●The lack of legal recourse and insurance for digital assets increases the risk of total loss in the event of theft or destruction.

●The U.S. federal, the state, local and non-U.S. income tax treatment of transactions in digital assets is unclear.

Risks Related to Investing in BNB

●BNB is subject to extreme price volatility, and any sustained decline in the market price of BNB could lead to substantial losses on our digital asset holdings and could adversely affect the market price of our common stock.

●BNB and BNB Chain have links to, and may be controlled by, Binance and its principals.

●The value of our common stock depends on the development and acceptance of BNB Chain. The slowing or stopping of the development or acceptance of BNB Chain may adversely affect an investment in our common stock.

●Digital assets represent a new and rapidly evolving industry, and the price of our common stock would depend on the acceptance of BNB.

●Regulatory changes or actions in foreign jurisdictions may affect the price of our common stock or restrict the use of BNB, mining activity or the operation of their networks or the global BNB markets in a manner that adversely affects our business, financial condition and results of operations and the price of our common stock.

Risk Related to Fat Panda Operations

●There is uncertainty related to the regulation of vaporization products and certain other consumption accessories. Increased regulatory compliance burdens, no matter how they arise, could have a material adverse impact on our business development efforts and our operations.

●The market for vaporizer products and related items is a niche market, subject to a great deal of uncertainty and is still evolving.

~~To date,~~Table ~~the majority~~ of ~~our revenues have been generated from clients that operate in the legal cannabis industry in the United States and Canada.~~Contents

~~We provide~~●Our ~~the~~success ~~overwhelming~~depends, ~~majority~~in ofpart, ~~our~~on ~~facility~~the ~~engineering~~quality ~~design~~ and ~~equipment~~safety ~~integration~~of ~~and~~our ~~solutions~~products, toas ~~facilities~~well inas the ~~legal cannabis~~perception ~~industry. While we are hopeful that the proportion~~ of ~~non-cannabis~~quality ~~revenues~~and ~~might~~safety ~~increase over time, decreases~~ in ~~demand from~~ the ~~legal~~vaporization ~~cannabis~~products ~~industry will have a material adverse effect on our revenues~~ and ~~the~~consumption ~~success~~accessories ofindustry ~~our business operations~~generally.

~~The cannabis~~●If ~~industry~~provinces ~~has~~continue ~~been an emerging industry over~~ the ~~last~~trend ~~several~~of ~~years~~imposing, ~~and~~expanding, ~~cannabis has only been legalized in some states~~ and ~~remains~~ ~~illegal~~increasing intaxes ~~other~~on ~~states~~vaporizer ~~and under U.S. federal law~~products, ~~making~~ it ~~difficult~~could tomaterially ~~accurately forecast the demand for our engineering~~ and ~~product~~adversely ~~solutions~~affect ~~in this specific industry. Losing clients from the cannabis industry may have a material adverse effect on~~ our ~~revenues~~ ~~and the success of our~~ business.

~~The cannabis~~●We ~~industry~~face isintense ~~still~~competition ~~developing~~and inmay ~~the~~fail ~~United States. While the majority of U.S. states now have legal cannabis, it remains illegal under U.S. federal law, making it difficult~~ to ~~accurately~~compete ~~predict and forecast the demand for our engineering and product solutions~~effectively. ~~If the U.S. Department of Justice (“DOJ”) did take action against the cannabis industry, we believe those of our clients operating in the legal cannabis industry would be lost to us.~~

~~In our~~●We ~~operations,~~may webecome ~~rely~~subject heavily upon the various U.S. federal governmental memos issued in the past, including the memorandum issued by the DOJ on October 19, 2009, known as the “Ogden Memorandum”, the memorandum issued by the DOJ on August 29, 2013, known as the “Cole Memorandum” and other guidance, in the attempt to ~~keep~~significant ~~our~~product ~~operations~~liability ~~acceptable to those state and federal entities that regulate, enforce, or choose to defer enforcement of certain current regulations regarding cannabis~~litigation. By doing this, we seek to avoid the many possible consequences of providing grow equipment to the cannabis industry as our customers continue to comply with their state and local jurisdictional laws, rules and regulations and the interpretations of relevant authorities.

~~The legal~~Risks ~~cannabis~~Related industry is not yet well or fully developed, and many aspects of this industry’s development and evolution cannot be accurately predicted. Therefore, the loss of any of our current clients or our inability to ~~capture new client contracts will have a material adverse effect on~~ our ~~business.~~Current ~~While~~Controlled weEnvironment ~~have~~Agriculture attempted to identify our business risks in the legal cannabis industry, you should carefully consider that there are other risks that cannot be foreseen or are not described in this report, which could materially and adversely affect our business and financial performance.Operations

~~There is~~●To ~~heightened~~the ~~scrutiny~~extent bywe ~~Canadian~~continue ~~regulatory~~in ~~authorities~~the ~~related~~controlled environment agriculture industry, we will need to ~~the~~expand ~~cannabis~~our ~~industry~~customer base, expand and develop our products and services and increase marketing and achieve timely contract execution.

~~Our existing~~●International ~~and~~trade ~~future~~disputes, ~~operations~~tariffs, ~~may~~international ~~become~~shipping ~~the~~and ~~subject~~domestic oftrucking ~~heightened~~issues ~~scrutiny~~all bycontribute ~~those~~to ~~regulators~~the ~~and~~challenges ~~other~~we ~~authorities~~face in ~~Canada~~obtaining ~~that oversee~~ the ~~cannabis~~products ~~industry.~~we Asneed afor ~~result,~~contract weperformance. ~~may~~We ~~become~~have ~~subject~~experienced ~~to direct~~ and ~~indirect~~are ~~interaction~~likely ~~with~~to ~~public~~continue ~~officials~~to inexperience ~~one~~inflationary ~~or both~~effects on the ~~United~~cost ~~States~~of products and ~~Canada.~~labor, Nowhich ~~assurance~~is ~~can~~likely beto ~~provided~~adversely ~~that~~affect ~~any~~our ~~heightened~~margins. ~~scrutiny~~The ~~will~~failure ~~not~~to inprocure ~~turn~~the ~~lead~~products we need to ~~the~~satisfy ~~imposition of~~our ~~restrictions~~customer oncontracts ~~our~~would ~~ability~~disrupt toour ~~operate~~business, inharm ~~Canada~~our reputation, result in ~~addition~~losses and potentially cause us to ~~those~~lose ~~described~~our ~~herein~~market.

●The build side of the controlled environment agriculture industry is very competitive. To be able to compete successfully, we will need to offer a wide range of products, have adequate capital for expansion, supply and execution, and develop robust marketing.

Risks Related to Our Business and Operations

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

●We are party to the AMA which contains terms that are materially adverse to our stockholders, and we may be unable to reform or terminate the AMA without incurring substantial costs despite pending litigation against the Asset Manager.

●The Company has identified material weaknesses in its internal control over financial reporting.

Risk Factors

Risks Related to the DAT Strategy

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

Our financial condition is highly dependent on the market price of BNB, which has historically been subject to significant volatility. At April 30, 2026, we held 515,544 BNB tokens with an aggregate fair value of $317.3 million, representing the substantial majority of our total assets. As a result, our financial condition, results of operations, and the market price of our common stock may be materially affected by fluctuations in the market price of BNB. The price of BNB has historically experienced significant volatility and may continue to fluctuate substantially 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 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 large holders of BNB or other digital assets; and market speculation, media coverage, or social media commentary relating to digital assets. Digital asset markets may be more volatile and less regulated than traditional financial markets, and prices may fluctuate significantly over short periods of time. Because BNB represents a substantial portion of our assets, even modest declines in the market price of BNB could materially reduce the value of our assets and stockholders’ equity and may negatively affect our reported financial results. In addition, because changes in the fair value 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 fiscal year ended April 30, 2026, we recognized an unrealized loss of $130.3 million and a realized loss of $1.3 million on digital assets primarily 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.

Table of Contents

Our DAT Strategy is concentrated primarily in a single asset, which subjects us to risks specific to the Binance ecosystem.

Our DAT 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 our Board. 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.

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

BNB operates on the BNB Chain blockchain network, which relies on complex software, cryptographic protocols, and a distributed network of validators to process transactions and maintain the integrity of the blockchain. The BNB Chain network may be subject to technical failures, software bugs, consensus failures, or other vulnerabilities that could compromise the network’s security or functionality. In addition, blockchain networks have historically been targets of cyberattacks, including attempts to exploit vulnerabilities in network software or associated applications. Any successful attack or exploit affecting the BNB Chain network could disrupt network operations, reduce confidence in 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.

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.

Table of Contents

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, U.S. Department of the Treasury's Financial Crimes Enforcement Network ("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.

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

The 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.

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

The market value 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 media 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.

Table of Contents

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

At April 30, 2026, we held digital assets with an aggregate fair value of $319.6 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. 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.

We are subject to significant competition in the growing digital asset industry and the Company’s business, operating results and financial condition may be adversely affected if the Company is unable to compete effectively.

The Company is operating in a competitive environment and will compete against other companies and other entities with similar strategies, including companies with significant holdings in BNB and other digital assets, and the Company’s business, operating results and financial condition may be adversely affected if the Company is unable to compete effectively.

Risks Related to Cryptocurrencies

The further development and acceptance of BNB Chain and other cryptocurrency networks, which represent a relatively new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of BNB Chain and other cryptocurrency networks may adversely affect an investment in the Company.

Cryptocurrency such as BNB may be used, among other things, to buy and sell goods and services or to transfer and store value by users. The cryptocurrency networks and chains are a new and rapidly evolving industry of which BNB Chain are a prominent, but not unique, part. The growth of the cryptocurrency industry in general, and BNB Chain in particular, is subject to a high degree of uncertainty. The factors affecting the further development of the cryptocurrency industry, as well as BNB Chain, include:

●continued worldwide growth in the adoption and use of BNB and other cryptocurrencies, including those competitive with BNB;

●government and quasi-government regulation of BNB and other cryptocurrencies and their use, or restrictions on or regulation of access to and operation of BNB Chain or similar cryptocurrency systems;

●the maintenance and development of the open-source software protocol of BNB Chain;

●changes in consumer demographics and public tastes and preferences;

●the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; and

●general economic conditions and the regulatory environment relating to cryptocurrencies and cryptocurrency service providers.

A decline in the popularity or acceptance of BNB Chain and other cryptocurrency networks may harm the price of our common stock. There is no assurance that BNB Chain, or the service providers necessary to accommodate it, will continue in existence or grow. Furthermore, there is no assurance that the availability of and access to cryptocurrency service providers will not be negatively affected by government regulation or supply and demand of BNB.

Table of Contents

The digital asset trading platforms on which cryptocurrency trades are relatively new and largely unregulated or may not be complying with existing regulations.

Cryptocurrency markets, including spot markets for BNB, are growing rapidly. The digital asset trading platforms through which BNB and other cryptocurrencies trade are new and largely unregulated or may not be complying with existing regulations. These markets are local, national and international and include a broadening range of cryptocurrencies and participants. Significant trading may occur on systems and platforms with minimum predictability. Spot markets may impose daily, weekly, monthly or customer-specific transaction or withdrawal limits or suspend withdrawals entirely, rendering the exchange of BNB for fiat currency difficult or impossible. Participation in spot markets requires users to take on credit risk by transferring BNB from a personal account to a third-party’s account.

Digital asset trading platforms do not appear to be subject to, or may not comply with, regulation in a manner similar to other regulated trading platforms, such as national securities exchanges or designated contract markets. Many digital asset trading platforms are unlicensed, are unregulated, operate without extensive supervision by governmental authorities, and do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. In particular, those located outside the United States may be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions. Digital asset trading platforms may be out of compliance with existing regulations.

As a result, trading activity on or reported by these digital asset trading platforms is generally significantly less regulated than trading in regulated U.S. securities and commodities markets and may reflect behavior that would be prohibited in regulated U.S. trading venues. Furthermore, many digital asset trading platforms lack certain safeguards put in place by more traditional exchanges to enhance the stability of trading on the platform and prevent flash crashes, such as limit-down circuit breakers. As a result, the prices of cryptocurrencies such as BNB on digital asset trading platforms may be subject to larger and/or more frequent sudden declines than assets traded on more traditional exchanges. Tools to detect and deter fraudulent or manipulative trading activities (such as market manipulation, front-running of trades, and wash-trading) may not be available to or employed by digital asset trading platforms or may not exist at all. As a result, the marketplace may lose confidence in, or may experience problems relating to, these venues and the digital assets that trade on these venues.

No digital asset trading platform on which cryptocurrency trades is immune from these risks. The closure or temporary shutdown of digital asset trading platforms due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in cryptocurrency and can slow down the mass adoption of it. Further, digital asset trading platform failures can have an adverse effect on cryptocurrency markets and the price of cryptocurrency and could therefore have a negative impact on the performance of our common Stock.

Negative perception, a lack of stability in the digital asset trading platforms, manipulation of cryptocurrency trading platforms by customers and/or the closure or temporary shutdown of such trading platforms due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in cryptocurrency generally and result in greater volatility in the market price of BNB and other cryptocurrency and our common stock. Furthermore, the closure or temporary shutdown of a cryptocurrency trading platform may impact the Company’s ability to determine the value of its cryptocurrency holdings.

The availability of spot exchange-traded products (“ETPs”) and futures exchange-traded funds (“ETFs”) for BNB and other digital assets may adversely affect the market price of our common stock.

Although BNB and other digital assets have experienced a surge of investor attention since BNB was invented in 2017, until recently investors in the United States had limited means to gain direct exposure to BNB through traditional investment channels, and instead generally were only able to hold BNB through “hosted” wallets provided by digital asset service providers or through “unhosted” wallets that expose the investor to risks associated with loss or hacking of their private keys. Given the relative novelty of digital assets, general lack of familiarity with the processes needed to hold BNB directly, as well as the potential reluctance of financial planners and advisers to recommend direct BNB holdings to their retail customers because of the manner in which such holdings are custodied, some investors have sought exposure to BNB through investment vehicles that hold BNB and issue shares representing fractional undivided interests in their underlying BNB holdings. These vehicles, which were previously offered only to “accredited investors” on a private placement basis, have in the past traded at substantial premiums to net asset value, possibly due to the relative scarcity of traditional investment vehicles providing investment exposure to BNB.

Table of Contents

Although we are a holding company, and we believe we offer a different value proposition than a BNB investment vehicle such as a spot BNB ETP or a BNB futures ETF, investors may nevertheless view our common stock as an alternative to an investment in a spot BNB ETP or BNB futures ETF, and choose to purchase shares of a spot BNB ETP or BNB futures ETF instead of our common stock. They may do so for a variety of reasons, including if they believe that ETPs or ETFs offer a “pure play” exposure to BNB that is generally not subject to federal income tax at the entity level as we are, or the other risk factors applicable to an operating business, such as ours. Additionally, unlike spot BNB ETPs or BNB futures ETFs, we (i) do not seek for our shares of common stock to track the value of the underlying BNB we hold before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the Securities Exchange Act of 1934, as amended, including Regulation M, and other securities laws, which enable ETPs and ETFs to continuously align the value of their shares to the price of the underlying assets they hold through share creation and redemption, (iii) are a Nevada corporation rather than a statutory trust and do not operate pursuant to a trust agreement that would require us to pursue one or more stated investment objectives and (iv) are not required to provide daily transparency as to our BNB holdings or our daily net asset value. Furthermore, recommendations by broker-dealers to buy, hold or sell complex products and non-traditional ETPs or ETFs, or an investment strategy involving such products, may be subject to additional or heightened scrutiny that would not be applicable to broker-dealers making recommendations with respect to our common stock. Based on how we are viewed in the market relative to ETPs and ETFs, and other vehicles which offer economic exposure to BNB, futures BNB ETFs, and similar vehicles offered on international exchanges, any premium or discount in our common stock relative to the value of our BNB holdings may increase or decrease in different market conditions.

As a result of the foregoing factors, availability of spot ETPs or futures ETFs for BNB and other digital assets could have a material adverse effect on our business, financial condition and results of operations and the market price of our common stock.

A disruption of the Internet may affect the operation of the cryptocurrency networks, which may adversely affect the cryptocurrency industry and an investment in the Company.

The cryptocurrency networks rely on the Internet. A significant disruption of Internet connectivity could disrupt the cryptocurrency networks’ functionality until such disruption is resolved. A disruption in the Internet could adversely affect an investment in the Company. In particular, some variants of cryptocurrencies have experienced a number of denial-of-service attacks, which have led to temporary delays in block creation and cryptocurrency transfers.

Cryptocurrencies are also susceptible to border gateway protocol hijacking (“BGP hijacking”). Such an attack can be a very effective way for an attacker to intercept traffic en route to a legitimate destination. BGP hijacking impacts the way different nodes and miners are connected to one another to isolate portions of them from the remainder of the network, which could lead to a risk of the network allowing double-spending and other security issues. If BGP hijacking occurs on any cryptocurrency network, participants may lose faith in the security of cryptocurrency, which could affect cryptocurrency’s value and consequently the value of our common stock.

Any Internet failures or Internet connectivity-related attacks that impact the ability to transfer cryptocurrency could have a material adverse effect on the price of cryptocurrency and the value of an investment in the Company.

The trading prices of many digital assets, including BNB, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility in the future, including further declines in the trading prices of BNB, could have a material adverse effect on the value of our common stock and our common stock could lose all or substantially all of their value.

The trading prices of many digital assets, including BNB, have experienced extreme volatility in recent periods and may continue to do so. For instance, there were steep increases in the value of certain digital assets, including BNB, over the course of 2021, and multiple market observers asserted that digital assets were experiencing a “bubble.” These increases were followed by steep drawdowns throughout 2022 in digital asset trading prices, including for BNB. These episodes of rapid price appreciation followed by steep drawdowns have occurred multiple times throughout BNB’s history. BNB prices have continued to exhibit extreme volatility.

Table of Contents

Extreme volatility may persist and the value of our common stock may significantly decline in the future without recovery. The digital asset markets may still be experiencing a bubble or may experience a bubble again in the future. For example, in the first half of 2022, each of Celsius Network, Voyager Digital Ltd., and Three Arrows Capital declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and negative publicity surrounding digital assets more broadly. In November 2022, FTX Trading Ltd. (“FTX”), one of the largest digital asset exchanges by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency, which were subsequently corroborated by its CEO. Shortly thereafter, FTX’s CEO resigned and FTX and many of its affiliates filed for bankruptcy in the United States, while other affiliates have entered insolvency, liquidation, or similar proceedings around the globe, following which the U.S. Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil securities and commodities fraud charges, against certain of FTX’s and its affiliates’ senior executives, including its former CEO. In addition, several other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC (“Genesis”). In response to these events (collectively, the “2022 Events”), the digital asset markets have experienced extreme price volatility and other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital asset markets. The 2022 Events have also negatively impacted the liquidity of the digital asset markets as certain entities affiliated with FTX engaged in significant trading activity. If the liquidity of the digital asset markets continues to be negatively impacted by these events, digital asset prices, including BNB, may continue to experience significant volatility or price declines and confidence in the digital asset markets may be further undermined.

Extreme volatility in the future, including further declines in the trading price of BNB, could have a material adverse effect on the value of our common stock and our common stock could lose all or substantially all of its value. Furthermore, negative perception and a lack of stability and standardized regulation in the cryptocurrency economy may reduce confidence in the cryptocurrency economy and may result in greater volatility in the price of BNB and other cryptocurrencies, including a depreciation in value.

We face significant risks relating to disruptions, forks, gain-of-control attacks, hacks, network disruptions, or other adverse events or other compromises to the cryptocurrency blockchains, which could materially and adversely impact our business, financial condition and results of operations.

Blockchain networks are maintained by decentralized networks of participants, and as such are susceptible and vulnerable to a variety of risks, including disruptions, security breaches, and fundamental technical issues. Both networks are vulnerable to attacks by malicious actors who gain control of a significant portion of the network’s validating authority . In such an event, the attacker could potentially double-spend transactions, reverse previously confirmed transactions, or otherwise disrupt the normal operations of the network. Successful attacks have historically undermined trust in affected blockchain networks and could materially decrease the value of cryptocurrency assets.

Additionally, forks, or splits in the underlying protocol, may occur when participants fail to reach consensus on proposed upgrades or changes. Forks can lead to the creation of duplicate networks, confusion among market participants, dilution of the original network’s value, and disruption of the network’s operations. Hard forks, in particular, can materially and adversely impact the perceived stability and value of digital assets, leading to reduced demand and price declines.

Further, hacks and other security breaches targeting the core infrastructure of blockchain networks or major participants, such as exchanges and custodians, could severely impact the reputation and market confidence in these networks. Exploits of protocol-level vulnerabilities could also compromise the integrity of the cryptocurrency blockchains, resulting in a substantial loss of value.

The success and growth of cryptocurrency assets depend significantly on their continued security, stability, and scalability. Any technical failures, consensus breakdowns, governance disputes, or regulatory interventions that diminish confidence in the networks or impair their functionality could lead to a material decline in their market prices, which could materially and adversely impact our business, financial condition and results of operations. A sustained or significant decrease in the price or liquidity of cryptocurrencies, whether due to gain-of-control attacks, forks, hacks, network disruptions, or other adverse events, could negatively impact our business, financial condition, and results of operations. Furthermore, even the perception that any of these events could occur may lead to significant market volatility and price declines, adversely affecting our business, financial condition and results of operations.

Crypto assets and blockchains are subject to various “attack” risks.

All networked systems are vulnerable to various kinds of attacks. A blockchain may be vulnerable to several types of attacks, including:

Table of Contents

●a “33% attack,” where, if a validator or group of validators were to gain control of more than 33% of the total staked crypto asset on the applicable blockchain, a malicious actor could temporarily impede or delay block confirmation or even cause a temporary fork in the blockchain.

●a “50% attack” where, if a validator or group of validators acting in concert were to gain control of more than 50% of the total staked crypto asset on the blockchain, a malicious actor would be able to gain full control of the blockchain and the ability to manipulate the blockchain on a forward-looking basis, including censoring transactions following the achievement of threshold, double-spending and fraudulent block propagation, while the attacker maintains the threshold. In theory, the minority non-attackers might reach social consensus to reject blocks proposed by the malicious majority attacker, reducing the attacker's ability to engage in malicious activity, but there can be no assurance this would happen or that non-attackers would be able to coordinate effectively.

●a “>66% attack,” where, if a validator or group of validators acting in concert were to gain control of more than 66% of the total staked BNB on the blockchain, a malicious actor could permanently and irreversibly manipulate the blockchain, including censorship, double-spending, and fraudulent block propagation, both on a forward- and backward-looking basis. The attacker could unilaterally finalize their preferred chain without the votes of any other stakers and could also reverse past finalized blocks.

Further, smart contracts on the network may create systemic risk for the price of a crypto asset in the event of an exploit. If a significant portion of a crypto asset is held by a small number of holders sometimes referred to as “whales,” these holders have the ability to manipulate the price of the crypto asset.

Political or economic crises may motivate large-scale sales of digital assets, which would result in a reduction in values and materially and adversely affect us.

Cryptocurrencies, as an alternative to fiat currencies that are backed by central governments, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. For example, political or economic crises could motivate large-scale acquisitions or sales of digital assets either globally, regionally or locally. Large-scale sales of certain digital assets would result in a reduction in their value and could materially and adversely affect our investment and trading strategies, the value of our assets, our business, financial condition and results of operations, and the price of our common stock.

The value of cryptocurrencies and other digital assets may be subject to momentum pricing risk.

Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value. Cryptocurrency and other digital asset market prices are determined primarily using data from various digital asset trading platforms, over-the-counter markets and derivative platforms. Momentum pricing may have resulted, and may continue to result, in speculation regarding future appreciation in the value of cryptocurrencies and other digital assets, inflating and making their market prices more volatile, and such effects may be material and adverse. As a result, cryptocurrencies, including BNB, and other digital assets may be more likely to fluctuate in value due to changing investor confidence in future appreciation (or depreciation) in their market prices, which could adversely materially affect the value of our cryptocurrency holdings and other digital asset inventory and thereby have a material adverse effect on our business, financial condition and results of operations and the market price of our common stock.

The emergence of DeFi subjects us to evolving risks and uncertainties relating to our investments and our services.

DeFi refers to a variety of blockchain-based applications or protocols that provide for peer-to-peer financial services using smart contracts and other technology rather than such services being offered by central intermediaries. There are various DeFi applications and protocols, each with its own unique risks and uncertainties. Common DeFi applications include borrowing/lending digital assets and providing liquidity or market making in digital assets and derivatives referencing digital assets. DeFi applications and ecosystems are demonstrating how public blockchains and smart contracts can revolutionize financial services, but the nascent technology comes with several risks that could materially and adversely affect our investments and trading strategies. It is difficult to quantify the amount of leverage that exists within the DeFi ecosystem and price volatility can result in deleveraging that moves asset prices dramatically. In addition, smart contracts may contain bugs which put funds at risk of theft or loss. Furthermore, in certain decentralized protocols, it may be difficult or impossible to verify the identity of a transaction counterparty necessary to comply with any applicable anti-money laundering, countering the financing of terrorism, or sanctions regulations or controls.

Table of Contents

The complexity and interconnectedness of digital asset networks, applications and economic systems enables new forms of malicious attacks that leverage a feature or vulnerability of one system to attack another. Such an attack may take the form of a temporary manipulation of the price of certain digital assets that trigger second order behaviors, such as automatic collateral liquidations on decentralized applications or digital asset trading platforms. Such an attack could adversely affect investments. A malicious actor can exploit the structure of one or a series of smart contracts or applications in ways that do not technically constitute exploitation of a “bug” or flaw in the smart contract or application. For example, such an exploit has occurred repeatedly in the Ethereum DeFi ecosystem, whereby a decentralized trading platform or lending application is designed to reference an external pricing source of a particular digital asset to determine when to liquidate collateral. By manipulating the price of the particular digital asset on a third-party platform (such as a digital asset trading platform), the pricing source used by the decentralized trading platform or application is consequently manipulated, which then leads to uneconomic collateral liquidations on the decentralized trading platform or application. Such liquidations may be processed automatically and could have a material adverse effect on our investments and trading strategies and an adverse impact on the price of our common stock.

Loss or theft of private keys or breaches of our digital wallets could result in the permanent loss of our BNB and materially adversely affect our business.

Digital assets such as BNB are controllable only by the possessor of the unique private keys relating to the digital wallet in which the assets are held. Safeguarding these private keys is critical. If our private keys are lost, destroyed, stolen, or otherwise compromised, we may be unable to access some or all our BNB. Likewise, if the digital wallets used to store our BNB are hacked or otherwise breached, our assets could be diverted, and such losses may be irreversible.

Recovery of lost or stolen assets may be impossible, and remedies against custodians or service providers may be limited. Even if recourse were theoretically available, litigation or enforcement in the jurisdictions where such custodians are located may be uncertain, costly and time-consuming. Any loss of BNB due to key mismanagement, wallet compromise or other security failure could materially adversely affect our financial condition, results of operations and the price of our common stock.

Competition from central bank digital currencies and emerging payments initiatives involving financial institutions could adversely affect the value of BNB and other digital assets.

Central banks in various countries have introduced digital forms of legal tender (“CBDCs”). Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could have an advantage in competing with, or replace, BNB and other cryptocurrencies as a medium of exchange or store of value. Central banks and other governmental entities have also announced cooperative initiatives and consortia with private sector entities, with the goal of leveraging blockchain and other technology to reduce friction in cross-border and interbank payments and settlement, and commercial banks and other financial institutions have also recently announced a number of initiatives of their own to incorporate new technologies, including blockchain and similar technologies, into their payments and settlement activities, which could compete with, or reduce the demand for, BNB. As a result of any of the foregoing factors, the value of BNB could decrease, which could adversely affect the Company.

For example, China’s CBDC project was made available to consumers in January 2022, and governments including the United States, the United Kingdom, the European Union and Israel have been discussing the potential creation of new CBDCs. Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete with, or replace, BNB and other digital assets as a medium of exchange or store of value. As a result, the emergence or growth of these or other digital assets could cause the market price of BNB to decrease, which could have a material adverse effect on our business, prospects, financial condition and operating results and the price of our common stock.

The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of BNB and adversely affect our business.

As a result of our DAT Strategy, our assets will be concentrated in our BNB holdings. Accordingly, the emergence or growth of digital assets other than BNB may have a material adverse effect on our financial condition. There are numerous alternative digital assets and many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain platforms or digital assets that do not use proof-of-work mining. For example, in late 2022, the Ethereum network transitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly less computing power than proof-of-work mining. The Ethereum network has completed other major upgrades since then and may undertake additional upgrades in the future.

Table of Contents

Other alternative digital assets that compete with BNB in certain ways include “stablecoins,” which are designed to maintain a constant price because of, for instance, their issuers’ promise to hold high-quality liquid assets (such as U.S. dollar deposits and short-term U.S. treasury securities) equal to the total value of stablecoins in circulation. Stablecoins have grown rapidly as an alternative to BNB and other digital assets as a medium of exchange and store of value, particularly on digital asset trading platforms. On July 18, 2025, the GENIUS Act was passed and signed into law of the United States, which directs for a federal regulatory framework for the issuance of “payment stablecoins” that are designed to be used as a means of payment and settlement. The GENIUS Act prescribes a regulatory framework that would further reduce uncertainty of the legal status and treatment of “payment stablecoins” or other digital assets in general and clarify in certain instances that such digital assets would not be treated or regulated as “securities.”

The reliance on open-source code by digital asset networks exposes us to risks related to competitive networks and products built on such code, the failure of individuals to maintain that code and discovery of security vulnerabilities that could threaten the ability of such networks to operate.

Digital asset networks are open-source projects and, although there may be an influential group of leaders in the network community, generally there is no official developer or group of developers that formally controls the digital asset network. Without guaranteed financial incentives, there may be insufficient resources to address emerging issues, upgrade security or implement necessary improvements to the network in a timely manner. If the digital asset network’s software is not properly maintained or developed, it could become vulnerable to security threats, operational inefficiencies and reduced trust, all of which could negatively impact the digital assets’ long-term viability and have a material adverse effect on our business, financial condition and results of operations and the price of our common stock.

The lack of legal recourse and insurance for digital assets increases the risk of total loss in the event of theft or destruction.

Digital assets that we have acquired and will acquire will not be insured against theft, loss or destruction. If an event occurs where we lose our digital assets, whether due to cyberattacks, fraud or other malicious activities, we may not have any viable legal recourse or ability to recover the lost assets. Unlike funds held in insured banking institutions, our digital assets would not be protected by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. If our digital assets are lost under circumstances that render another party liable, there is no guarantee that the responsible party will have the financial resources to compensate us. As a result, we and our stockholders could face significant financial losses.

The state, local and non-U.S. tax treatment of digital assets is unclear.

The taxing authorities of certain states (i) have announced that they will follow the Notice 2014-21 issued by the Internal Revenue Service with respect to the treatment of digital assets for state income tax purposes and/or (ii) have issued guidance exempting the purchase and/or sale of digital assets for fiat currency from state sales tax. It is unclear what further guidance on the treatment of digital assets for state tax purposes may be issued in the future. Any future guidance on the treatment of digital assets for state or local tax purposes could result in adverse tax consequences to us and could adversely affect the price of digital assets.

The treatment of digital assets for tax purposes by non-U.S. jurisdictions may differ from the treatment of digital currency for U.S. federal, state or local tax purposes. It is possible, for example, that a non-U.S. jurisdiction would impose sales tax or value-added tax on purchases and sales of digital assets for fiat assets. For instance, if a foreign jurisdiction with a significant share of the market of a digital assets users imposes onerous tax burdens on digital asset users, or imposes sales or value-added tax on purchases and sales of digital assets for fiat assets, such actions could result in decreased demand for digital currency in such jurisdiction, which could adversely affect the price of digital assets.

Table of Contents

Risks Related to Investing in BNB

BNB is subject to extreme price volatility, and any sustained decline in the market price of BNB could lead to substantial losses on our digital asset holdings and could adversely affect the market price of our common stock.

Historical prices of BNB have exhibited sudden and significant fluctuations due to shifts in market sentiment, speculative trading, macroeconomic trends, technology-related disruptions, and regulatory announcements. Because digital asset trading markets are relatively new, largely unregulated, and, at times, subject to limited liquidity, BNB may experience larger or more frequent price swings than traditional asset classes and may not be complying with existing regulations. As a result, trading activity on or reported by these digital asset trading platforms is generally significantly less regulated than trading in regulated U.S. securities and commodities markets and may reflect behavior that would be prohibited in regulated U.S. trading venues. Furthermore, many digital asset trading platforms lack certain safeguards put in place by more traditional exchanges to enhance the stability of trading on the platform and prevent flash crashes, such as limit-down circuit breakers. As a result, the prices of cryptocurrencies such as BNB on digital asset trading platforms may be subject to larger and/or more frequent sudden declines than assets traded on more traditional exchanges. A rapid decrease in the price of BNB—whether the result of negative perception, a lack of stability in the digital asset trading platforms, market manipulation of cryptocurrency trading platforms by customers, a cyber-security incident, regulatory action, or other factors—could materially reduce the value of any BNB we hold, force us to recognize impairment charges, trigger defaults or covenant breaches in any future financing arrangements, and depress the market price of our securities.

Additionally, a significant majority of the daily BNB trading volume occurs on the Binance Exchange, which is controlled by Binance, the original distributors of BNB. Most of the BNB in circulation has been reported to be held by the founder and former controller of Binance. As a result, trading activity by these parties could have a material impact on the price and trading volume of BNB on the Binance Exchange. While Binance and its former controller have indicated that they and their respective related entities do not actively trade BNB or undertake gross or net purchasing activities to support its price or increase trading volume, publicly available information is insufficient to enable a conclusion as to whether trading activity in BNB on the Binance Exchange by such parties (or others) is occurring in compliance with the Binance Exchange’s policies and procedures or having a material impact on the price or trading volume of BNB on the Binance Exchange or other secondary markets. Further, to the Company’s knowledge, Binance and its founder are not subject to trading restrictions in respect of BNB going forward; as such, prior conduct and indications of current intent are not necessarily indicative of future trading activities by these parties. Any allegations of BNB price or volume manipulation could result in regulatory actions against such parties and/or loss of confidence in BNB, and/or Binance generally, which could negatively impact the price of our common stock.

BNB and BNB Chain have links to, and may be controlled by, Binance and its principals.

Binance has links to BNB and BNB Chain, and Binance has historically played a major role in BNB Chain’s development. Binance typically has among the highest trading volume of BNB for any global trading platform. Users of the Binance trading platform who pay trading fees in BNB receive a trading discount, and users who maintain a certain minimum balance of BNB on Binance’s trading platform may qualify to receive additional benefits, such as additional reduced fees, lower interest rates, higher borrowing limits, and other benefits, from Binance. (Binance, Fee Schedule, https://www.binance.com/en/fee/schedule (last visited October 15, 2025)). Concurrent with the launch of the Binance’s exchange in July 2017, Binance or its affiliates minted 200 million BNB tokens on the Ethereum blockchain using Ethereum’s ERC-20 functionality. These tokens were initially created for the purpose of allowing the holder of BNB to pay for fees incurred from the use of the Binance exchange, among other uses. Binance according to the Binance Exchange white paper V 1.1 (the “BNB white paper”) issued the 200 million BNB as follows: 10% (20 million BNB) to angel investors in Binance Ltd., 40% (80 million BNB) to the founding employees of Binance exchange subject to a 4 year schedule, and 50% (100 million BNB) in what the BNB white paper termed an “ICO” (an abbreviation of “Initial Coin Offering”) in exchange for Ethereum (ETH) or the equivalent Ethereum price in Bitcoin in three consecutive tranches from July 1, 2017 to July 21, 2017. Neither the Asset Manager nor the Company is aware of the precise extent that the employees, principals and angel investors of Binance and its affiliates have retained their BNB that they originally received in the BNB ICO, or what percentage of outstanding BNB is currently owned by Binance and its associated persons (following open-market purchases or otherwise), but there can be no assurance that they do not currently control a majority of outstanding BNB. If Binance and persons associated with it did in fact possess control of a majority of outstanding BNB, it would give them the corresponding ability to control validator selection via voting, and numerous other governance decisions relating to the future of BNB Chain and BNB, such as forks, future development roadmaps, scaling decisions, etc., which they could in theory choose to exercise in a way that benefits themselves or their interests. In the BNB white paper, Binance represented it would use the proceeds of the BNB ICO to develop the Binance exchange. Moreover, Binance has been responsible for operating the deflationary burning program for BNB tokens, which was a significant force in their market value. U.S. regulators have scrutinized burn mechanisms in past enforcement actions, with the SEC citing issuer-controlled burn programs as evidence of efforts to influence a cryptocurrency’s value consistent with securities characteristics. If regulators were to reach a similar conclusion regarding BNB’s burn mechanism, it could increase the likelihood that BNB would be classified as a security and subject to heightened regulatory restrictions, adversely affecting its liquidity and price.

Table of Contents

Apart from the risks of potential centralized control, the perception that BNB Chain and BNB are associated with Binance could cause BNB’s value to be affected by developments involving or affecting Binance. For example, in 2023 the SEC filed a lawsuit against Binance, alleging, inter alia, that the offering and sale of BNB by Binance was an unregistered securities offering. The district court’s decision in SEC v. Binance Holdings Ltd. et al., 738 F.Supp.3d 20, 48-58 (D.D.C. Aug. 23, 2024), ruled that, while the SEC’s allegations regarding the manner in which Binance offered and sold BNB as part of the initial distribution of BNB were sufficient at the motion to dismiss stage, the SEC’s complaint did not include sufficient facts to support a plausible inference that any particular secondary sales of BNB satisfy the Howey test for an investment contract. In 2023, the Department of Justice, the Office of Foreign Assets Control, the Financial Crimes Enforcement Network, and the CFTC reached a series of settlements with Binance for charges involving violations of U.S. laws governing money laundering, sanctions, registration as a money services business, and registration under the Commodity Exchange Act, among others. If Binance were to subject to operating restrictions or was no longer able to facilitate trading in BNB, the liquidity and market value of BNB would be negatively affected, causing our common stock to decline in value. If BNB were no longer able to be used for trading fee discounts on Binance, the demand for BNB would be negatively affected, which would likewise negatively impact BNB’s market value and therefore the price of our common stock. Likewise, negative developments, publicity, or sentiment relating to Binance or its principals could affect market demand for, and value of, BNB.

Proof-of-stake blockchains are a relatively recent innovation, and have not been subject to as widespread use or adoption over as long of a period of time as traditional proof-of-work blockchains.

Certain digital assets, such as Bitcoin, use a “proof-of-work” consensus algorithm. Bitcoin’s blockchain has been in continual operation since its “genesis” block was mined in 2009. Many newer blockchains that enable smart contract functionality are built on a consensus algorithm known as “proof-of-stake,” including the current Ethereum network following the completion of its transition to a “proof-of-stake” model in 2022. Proponents believe that there are certain advantages to the use of “proof-of-stake” models; however, the “proof-of-stake” consensus mechanisms and governance systems underlying many newer blockchain protocols, including BNB Chain, and their associated digital assets (including the BNB held by the Company), have not been tested at scale over as long of a period of time or subject to as widespread use or adoption. This is in contrast with, for example, Bitcoin’s proof-of-work consensus mechanism.

“Proof-of-stake” blockchains, and their associated digital assets, may have undetected vulnerabilities, structural design flaws, suboptimal incentive structures for network participants (e.g., validators), technical disruptions, or a wide variety of other problems, that might otherwise be apparent for a consensus protocol with a longer operational history, such as the bitcoin blockchain. If such problems were to occur, they could result in disrupted functions, or other unintended outcomes, which could further lead to (i) an outright failure that causes a total outage or disruption of network activity, or (ii) other operational problems or reputational damage, leading to a loss of users or adoption or a loss in value of the associated digital assets, including the Company’s assets. Over the long term, there can be no assurance that the “proof-of-stake” blockchain on which the Company’s assets rely will achieve widespread scale or adoption or perform successfully; any failure to do so could negatively impact our business, financial condition and results of operations and the price of our common stock.

The value of our common stock depends on the development and acceptance of BNB Chain. The slowing or stopping of the development or acceptance of BNB Chain may adversely affect an investment in our common stock.

Digital assets such as BNB were only introduced within the past 15 years, and the medium-to-long-term value of our common stock is subject to a number of factors over time relating to the capabilities and development of blockchain technologies, such as the recentness of their development, their dependence on the internet and other technologies, their dependence on the role played by users, developers, validators and the potential for malicious activity. BNB itself was launched only in 2017. For example, the realization of one or more of the following risks could materially adversely affect the value of our common stock: digital asset networks, including BNB Chain, and the software used to operate them are in the early stages of development. Given the recentness of the development of digital asset networks, digital assets may not function as intended and parties may be unwilling to use digital assets, which would dampen the growth, if any, of digital asset networks. Because BNB is a digital asset, the value of our common stock is subject to a number of factors relating to the fundamental investment characteristics of digital assets, including the fact that digital assets are bearer instruments and loss, theft, compromise, or destruction of the associated private keys could result in permanent loss of the asset.

BNB Chain, including the cryptographic and algorithmic protocols associated with the operation of BNB Chain, has only been in existence since 2017, and BNB markets have a limited performance record, making them part of a new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. For example, the following are some of the risks that could materially adversely affect the value of our common stock:

Table of Contents

●Digital assets, including BNB, are controllable only by the possessor of both the unique public key and private key or keys relating to the BNB Chain address, or “wallet”, at which the digital asset is held. Private keys must be safeguarded and kept private in order to prevent a third party from accessing the digital asset held in such wallet. The loss, theft, compromise or destruction of a private key required to access a digital asset may be irreversible. If a private key is lost, stolen, destroyed or otherwise compromised and no backup of the private key is accessible, the owner would be unable to access the digital asset corresponding to that private key and the private key will not be capable of being restored by the digital asset network resulting in the total loss of the value of the digital asset linked to the private key

●Digital asset networks are dependent upon the internet. A disruption of the internet or a digital asset network, such as BNB Chain, would affect the ability to transfer digital assets, including BNB, and, consequently, their value.

●The foregoing notwithstanding, BNB Chain’s protocol is informally overseen by a collective of core developers who propose amendments to the relevant network’s source code. Core developers’ roles evolve over time, largely based on self-determined participation. If a significant majority of users and validators were to adopt amendments to BNB Chain based on the proposals of such core developers, BNB Chain would be subject to new protocols that may adversely affect the value of BNB.

●To the extent that any validators cease to record transactions that do not include the payment of a transaction fee in solved blocks or do not record a transaction because the transaction fee is too low, such transactions will not be recorded on BNB Chain until a block is validated by a validator who does not require the payment of transaction fees or is willing to accept a lower fee. Any widespread delays in the recording of transactions could result in a loss of confidence in a digital asset network.

●Many digital asset networks, including BNB Chain, face significant scaling challenges and are being upgraded with various features designed to increase the speed of digital asset transactions and the number of transactions that can processed in a given period (known as “throughput”). These attempts to increase the volume of transactions may not be effective, and such upgrades may fail, resulting in potentially irreparable damage to BNB Chain and the value of BNB.

●Moreover, in the past, bugs, defects and flaws in the source code for digital assets have been exposed and exploited, including flaws that disrupted normal blockchain network or DApp and smart contract operations or disabled related functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets. The cryptography underlying BNB Chain or BNB as an asset could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography becoming ineffective. In any of these circumstances, a malicious actor may be able to compromise the security of BNB Chain or take the treasury’s BNB, which would adversely affect the value of our common stock. Moreover, normal operations and functionality of BNB Chain may be negatively affected. Such losses of functionality could lead to BNB Chain losing attractiveness to users, nodes, validators, or other stakeholders, thereby dampening demand for BNB. Even if another digital asset other than BNB were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital assets generally could negatively affect the demand for digital assets and therefore adversely affect the value of our common stock.

●BNB Chain is still in the process of developing and making significant decisions that will affect policies that govern the supply and issuance of BNB as well as other BNB Chain protocols. The open-source nature of many digital asset network protocols, such as the protocol for BNB Chain, means that developers and other contributors are generally not directly compensated for their contributions in maintaining and developing such protocols. As a result, the developers and other contributors of a particular digital asset may lack a financial incentive to maintain or develop the network, or may lack the resources to adequately address emerging issues. Alternatively, some developers may be funded by companies whose interests are at odds with other participants in a particular digital asset network. If BNB Chain does not successfully develop its policies on supply and issuance, and other major design decisions or does so in a manner that is not attractive to network participants it could lead to a decline in adoption of BNB Chain and price of BNB.

●Software applications running on top of BNB Chain (often referred to as “decentralized applications” or “Dapps”, whether or not decentralized in fact) and smart contract developers depend on being able to obtain BNB to be able to run their programs and operate their businesses. In particular, decentralized applications and smart contracts require BNB in order to pay the transaction fees needed to pay validators to execute transactions and smart contract operations. As such, they represent a significant source of demand for BNB. BNB’s price volatility (particularly where BNB prices increase), or BNB Chain’s wider inability to meet the demands of decentralized applications and smart contracts in terms of inexpensive, reliable, and prompt transaction execution (including during congested periods), or to solve its scaling challenges or increase its throughput, may discourage such decentralized application and smart contract developers from using BNB Chain as the foundational infrastructure layer for building their applications and smart contracts. If decentralized application and smart contract developers abandon BNB Chain for other blockchain or digital asset networks or protocols for whatever reason, the value of BNB could be negatively affected.

Moreover, because digital assets, including BNB, have been in existence for a short period of time and are continuing to develop, there may be additional risks in the future that are impossible to predict as of the date of this prospectus.

Table of Contents

If validators exit BNB Chain, it could increase the likelihood of a malicious actor obtaining control.

Validators exiting the network could make BNB Chain more vulnerable to a malicious actor obtaining control of a large percentage of staked BNB, which might enable them to manipulate BNB Chain by censoring or manipulating specific transactions. If BNB Chain suffers such an attack, the price of BNB could be negatively affected, and a loss of confidence in BNB Chain could result. Any reduction in confidence in the transaction confirmation process or staking power of BNB Chain may adversely affect an investment in our common stock.

Blockchain technologies are based on theoretical conjectures as to the impossibility of solving certain cryptographical puzzles quickly. These premises may be incorrect or may become incorrect due to technological advances.

Blockchain technologies are premised on theoretical conjectures as to the impossibility, in practice, of solving certain mathematical problems quickly. Those conjectures remain unproven, however, and mathematical or technological advances could conceivably prove them to be incorrect. Blockchain technology companies may also be negatively affected by cryptography or other technological or mathematical advances, such as the development of quantum computers with significantly more power than computers presently available, that undermine or vitiate the cryptographic consensus mechanism underpinning BNB Chain and other distributed ledger protocols. If either of these events were to happen, markets that rely on blockchain technologies, such as BNB Chain, could quickly collapse, and an investment in our common stock may be adversely affected.

Due to the nature of private keys, BNB transactions are irrevocable and stolen or incorrectly transferred BNB may be irretrievable. As a result, any incorrectly executed BNB transactions could adversely affect our business, financial condition and results of operations and the price of our common stock.

BNB transactions are typically not reversible without the consent and active participation of the recipient of the transaction. Once a transaction has been signed with private keys, verified and recorded in a block that is added to BNB Chain, an incorrect transfer of cryptocurrency, such as BNB, or a theft of BNB generally will not be reversible and the Company may not be capable of seeking compensation for any such transfer or theft. It is possible that, through computer or human error, or through theft or criminal action, the Company’s BNB or other assets could be transferred from the Company’s custodial accounts in incorrect amounts or to unauthorized third parties, or to uncontrolled accounts. To the extent that the Company is unable to successfully seek redress for such error or theft, such loss could adversely affect our business, financial condition and results of operations and the price of our common stock.

If a custodian’s internal procedures and controls are inadequate to safeguard the Company’s BNB holdings, and the Company’s private key(s) is (are) lost, destroyed or otherwise compromised and no backup of the private key(s) is (are) accessible, the Company will be unable to access its BNB, which could adversely affect our business, financial condition and results of operations and the price of our common stock. In addition, if the Company’s private key(s) is (are) misappropriated and the Company’s BNB holdings are stolen, including from or by a custodian, the Company could lose some or all of its BNB holdings, which could adversely impact our business, financial condition and results of operations and the price of our common stock.

Such events have occurred in connection with digital assets in the past. For example, in October 2022, an unidentified hacker or hackers found a bug in the BNB Smart Chain bridge’s code and used it to mint and withdraw about US$570 million worth of BNB tokens. Binance and the crypto community reacted quickly and were able to freeze most of the stolen money. However, around US$100 million worth of stolen assets were moved off-chain. To the extent that the Company is unable to seek a corrective transaction with such third party or is incapable of identifying the third party which has received the Company’s BNB through error or theft, the Company will be unable to revert or otherwise recover incorrectly transferred BNB. The Company will also be unable to convert or recover its BNB transferred to uncontrolled accounts. To the extent that the Company is unable to seek redress for such error or theft, such loss could adversely affect our business, financial condition and results of operations and the price of our common stock.

Table of Contents

BNB Chain’s decentralized governance structure may negatively affect its ability to grow and respond to challenges.

The governance of decentralized networks, such as BNB Chain, is by voluntary consensus and open competition. In other words, BNB Chain has no central decision-making body or clear manner in which participants can come to an agreement other than through voluntary, widespread consensus. As a result, a lack of widespread consensus in the governance of BNB Chain may adversely affect the network’s utility and ability to adapt and face challenges, including technical and scaling challenges. If a significant majority of users and validators adopt amendments to a decentralized network based on the proposals of core developers, such network will be subject to new protocols that may adversely affect the value of the relevant digital asset. However, BNB Chain would cease to operate successfully without both validators and users, and the core developers cannot formally compel them to adopt the changes to the source code desired by core developers, or to continue to render services or participate in BNB Chain. As a general matter, the governance of BNB Chain generally depends on most of members of the BNB Chain community ultimately reaching some form of voluntary agreement on significant changes.

The decentralized governance of BNB Chain may make it difficult to find or implement solutions or marshal sufficient effort to overcome existing or future problems, especially protracted ones requiring substantial directed effort and resource commitment over a long period of time, such as scaling challenges. BNB Chain’s failure to overcome governance challenges could exacerbate problems experienced by the network or cause the network to fail to meet the needs of its users, and could cause users, validators, and developer talent to abandon BNB Chain or to choose competing blockchain protocols, or lead to a drop in speculative interest, which could cause the value of BNB to decline. If the BNB Chain community is unable to reach consensus in the future, it could have adverse consequences for the network or lead to a fork, which could affect the value of BNB.

We face risks relating to the potential compromise of BNB Chain and other cryptocurrencies’ network security by emerging technologies, including artificial intelligence and quantum computing, which may materially and adversely impact our operations and financial condition.

The security and integrity of BNB Chain and other cryptocurrencies’ network are fundamentally dependent on the robustness of its cryptographic algorithms. BNB and other cryptocurrencies’ protocol relies heavily on public key cryptography and hashing algorithms to secure transactions, safeguard private keys, and prevent double-spending. Advances in emerging technologies, particularly artificial intelligence (“AI”) and quantum computing may pose significant risks to BNB Chain and other cryptocurrencies’ network’s security and operational stability.

Quantum computing, in particular, presents a long-term threat to the cryptographic assumptions underpinning BNB Chain and other cryptocurrencies. Should quantum computing achieve sufficient maturity, it could undermine the effectiveness of the cryptographic algorithms used to secure the blockchain, such as elliptic curve digital signature algorithms (ECDSA). A sufficiently powerful quantum computer could potentially reverse-engineer private keys from public addresses or compromise the blockchain’s consensus mechanism, leading to the theft of digital assets, double-spending, and other forms of fraud. Although current quantum computing capabilities are not yet at this level, advancements in quantum technologies could materialize more rapidly than anticipated, creating significant systemic risks for BNB Chain.

AI may also pose indirect security risks. AI-driven cyberattacks, including advanced phishing schemes, autonomous malware, and intelligent blockchain analysis tools, could increase the sophistication and success rate of attacks targeting BNB and other cryptocurrencies’ users, exchanges, custodians, and node operators. The use of AI to exploit vulnerabilities in software, validator hardware, or network protocols could threaten the stability and reliability of the BNB and other cryptocurrencies’ ecosystem.

There can be no assurance that BNB and other cryptocurrencies’ current cryptographic safeguards will be sufficient to protect against future technological advances. While research and development efforts are ongoing to develop quantum-resistant cryptographic protocols, BNB Chain and other cryptocurrencies’ network may face challenges in adopting such technologies at scale, particularly given its decentralized governance structure. Any successful attack or perceived vulnerability arising from AI or quantum computing could materially and adversely affect the price, liquidity, and adoption of BNB and other cryptocurrencies and could negatively impact our business, financial condition and results of operations.

Table of Contents

Any name change and any associated rebranding initiative by the core developers of BNB may not be favorably received by the digital asset community, which could negatively impact the value of BNB, our business, financial condition and results of operations and the price of our common stock.

From time to time, digital assets may undergo name changes and associated rebranding initiatives. For example, Bitcoin Cash may sometimes be referred to as Bitcoin ABC in an effort to differentiate itself from any Bitcoin Cash hard forks, such as Bitcoin Satoshi Vision, and in August 2024, MakerDAO, one of the largest decentralized finance protocols, rebranded to "Sky" and introduced new tokens to replace its established MKR governance token and DAI stablecoin. We cannot predict the impact of any name change and any associated rebranding initiative on BNB. After a name change and an associated rebranding initiative, a digital asset may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status previously enjoyed by such digital asset. The failure of any name change and any associated rebranding initiative by a digital asset may result in such digital asset not realizing some or all of the anticipated benefits contemplated by the name change and associated rebranding initiative, and could negatively impact the value of BNB, our business, financial condition and results of operations and the price of our common stock.

Banks, financial institutions and BNB exchanges that our DAT Strategy relies on, may be located outside the United States, may not be subject to U.S. regulation, and may be less reliable than U.S.-equivalents.

In connection with the implementation of our DAT Strategy and the PIPE Transaction, the Company and/or Asset Manager entered into agreements with one or more U.S. state-chartered bank or other U.S. regulated financial institution to provide custodial, trading, and exchange-access services on our behalf. These banks or financial institutions may not be subject to U.S. federal regulation. These arrangements serve as an initial setup for our digital asset and certain fiat activities, including a cash deposit account for U.S. dollars. To increase yield, our service providers may subsequently migrate a substantial portion of related fiat and digital asset custody, trading, and yield-generation activities to offshore custodians or DeFi trading platforms, including U.S. dollar deposits. In addition, our trading and yield-generation activities, whether or not our accounts are held in custody at a U.S. regulated or regulated offshore custodian, are likely to require us to transfer digital assets and fiat currency to counterparties who may be unregulated and who may be located offshore. The use of such onshore unregulated or offshore custodians, banks, counterparties, and DeFi platforms, which may not be subject to U.S. regulation, would expose our assets to heightened risks, including: (i) counterparty risk and the potential insolvency of such custodians or DeFi trading platform operators, which may not be subject to capital, segregation, or supervisory requirements commensurate with those of the initial U.S. custodial, trading, and exchange-access service providers; (ii) regulatory and jurisdictional uncertainty, which could result in sudden changes to access or withdrawal rights; and (iii) increased risk of loss of, or inaccessibility to, our fiat or digital assets in the event of a custodial or bank failure, exchange freeze, government intervention or fraud. Any of these risks could materially and adversely affect our ability to safeguard our assets, reduce expected yields, and negatively impact our business, financial condition and results of operations as well as the price of our common stock.

Additionally, to the extent any of the Company’s activities involving BNB are conducted on BNB trading platforms outside the United States, trading on such exchanges is not regulated by any U.S. governmental agency and may involve certain risks not applicable to trading on U.S. exchanges. Certain foreign markets may be more susceptible to disruption than U.S. exchanges. These factors could adversely affect the performance of the Company and its common stock.

Our DAT Strategy may subject us to enhanced regulatory oversight.

Several spot BNB ETPs have received approval from the SEC to list their shares on a national securities exchange with continuous share creation and redemption at net asset value. Even though we are not, and will not expect to function in the manner of, a spot BNB ETP, it is possible that we nevertheless could face regulatory scrutiny from the SEC or other federal or state agencies due to our BNB holdings.

In addition, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict between Russia and Ukraine. If we are found to have purchased any of our BNB from bad actors that have used BNB to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in BNB by us may be restricted or prohibited.

We may incur indebtedness or enter into other financial instruments in the future that may be collateralized by our BNB holdings. We may also consider pursuing strategies to create income streams or otherwise generate funds using our BNB holdings. These types of BNB -related transactions are the subject of enhanced regulatory oversight. These and any other BNB -related transactions we may enter into, beyond simply acquiring and holding BNB, may subject us to additional regulatory compliance requirements and scrutiny, including under federal and state money services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.

Table of Contents

Additional laws, guidance and policies may be issued by domestic and foreign regulators following the filing for Chapter 11 bankruptcy protection by FTX in November 2022. The FTX collapse may have increased regulatory focus on the digital assets industry. Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting BNB, as well as enforcement actions involving or impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold and transact in BNB.

In addition, private actors that are wary of BNB or the regulatory concerns associated with BNB have in the past taken and may in the future take further actions that may have an adverse effect on our business, financial condition and results of operations and the market price of our common stock.

Regulatory changes or actions in foreign jurisdictions may affect the price of our common stock or restrict the use of BNB, validator activity or the operation of their networks or the global BNB markets in a manner that adversely affects our business, financial condition and results of operations and the price of our common stock.

Various foreign jurisdictions have, and may continue to adopt laws, regulations or directives that affect digital asset networks (including BNB Chain), the digital asset markets (including the BNB market), and their users, particularly digital asset exchanges and service providers that fall within such jurisdictions’ regulatory scope. For example, if China or other foreign jurisdictions were to ban or otherwise restrict validating activity, including by regulating or limiting manufacturers’ ability to produce or sell semiconductors or hard drives in connection with BNB validating activities, it would have a material adverse effect on digital asset networks (including BNB Chain), the digital asset market, and as a result, adversely impact our business, financial condition and results of operations and the price of our common stock.

A number of foreign jurisdictions have recently taken regulatory action aimed at digital asset activities. China has made transacting in cryptocurrencies illegal for Chinese citizens in mainland China, and additional restrictions may follow. Both China and South Korea have banned initial coin offerings entirely and regulators in other jurisdictions, including Canada, Singapore and Hong Kong, have opined that initial coin offerings may constitute securities offerings subject to local securities regulations. In May 2021, the Chinese government announced renewed efforts to restrict cryptocurrency trading and mining activities. Regulators in the Inner Mongolia and other regions of China have proposed regulations that would create penalties for companies engaged in cryptocurrency mining activities and introduce heightened energy saving requirements on industrial parks, data centers and power plants providing electricity to cryptocurrency miners. The United Kingdom’s Financial Conduct Authority published final rules in October 2020 banning the sale of derivatives and exchange traded notes that reference certain types of digital assets, contending that they are “ill- suited” to retail investors citing extreme volatility, valuation challenges and association with financial crime. A new bill, the Financial Services and Markets Bill (“FSMB”), became law in 2023. The FSMB brings digital asset activities within the scope of existing laws governing financial institutions, markets and assets. In addition, the European Council of the European Union approved the text of MiCA in October 2022. MiCA came into effect in 2024, establishing a regulatory framework for digital asset services across the European Union. MiCA is intended to serve as a comprehensive regulation of digital asset markets and imposes various obligations on digital asset issuers and service providers. The main aims of MiCA are industry regulation, consumer protection, prevention of market abuse and upholding the integrity of digital asset markets.

Foreign laws, regulations or directives may conflict with those of the United States and may negatively impact the acceptance of one or more digital assets by users, merchants and service providers outside the United States and may therefore impede the growth or sustainability of the digital asset economy in the European Union, China, Japan, Russia and the United States and globally, or otherwise negatively affect the value of BNB. Moreover, other events, such as the interruption in telecommunications or internet services, cyber-related terrorist acts, civil disturbances, war or other catastrophes, could also negatively affect the digital asset economy in one or more jurisdictions. For example, Russia’s invasion of Ukraine on February 24, 2022 led to volatility in digital asset prices, with an initial steep decline followed by a sharp rebound in prices. The effect of any future regulatory change on the Company or BNB is impossible to predict, but such change could be substantial and adverse to our business, financial condition and results of operations and the price of our common stock.

Table of Contents

Risks Related to Fat Panda Operations

If we fail to manage our business and growth effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately.

Our success in the Fat Panda business will depend, in part, on our ability to manage our business and its growth. Any growth in, expansion of, or shift in the focus of our business, is likely to place a strain on our management and administrative resources, infrastructure and systems. As with acquired businesses, we expect that we will need to further refine and expand our business development capabilities, our systems and processes and our access to financing sources. We will also need to hire, train, supervise, and manage existing and new employees. Prior to the acquisition our operations have been handled by a limited number of persons at one location. The acquisition brings into our company over thirty retail locations and a wide range of different products. Learning the new business and its processes will be time consuming and will increase management responsibilities and divert management attention from the historical business. We cannot assure that we will be able to:

●optimize our product offerings effectively or efficiently or in a timely manner, if at all;

●achieve expected synergies or other anticipated benefits;

●allocate our human resources optimally;

●meet our capital needs;

●identify and hire qualified employees or retain valued employees;

●effectively incorporate the components of any business or product line that we may acquire in our effort to achieve growth and income; or

●continue to grow our business.

Our inability or failure to manage our business and its growth effectively could harm our business and materially adversely affect our operating results and financial condition. As a result of our rapid growth, we may find it difficult to build and maintain our business, which could limit our ability to innovate and operate effectively. Any failure to preserve our business could also negatively affect our ability to retain current and recruit new personnel, continue to perform at current levels or execute on our business strategy.

The market for vaporizer products and related items is a niche market, subject to a great deal of uncertainty and is still evolving.

Vaporizer products and related accessories comprise a significant portion of our product offerings through our retail outlets and within our manufacturing line up. These products represent core components of a niche market that is evolving rapidly, is characterized by a number of market participants and is subject to regulatory oversight and a potentially fluctuating regulatory framework. Rapid growth in the use of, and interest in, vaporizer products is recent, and may not continue on a lasting basis. The demand and market acceptance for these products is subject to a high level of uncertainty, including, but not limited to, changes in governmental regulation, developments in product technology, perceived safety and efficacy of our products, perceived advantages of competing products and sale and use of materials that can be vaporized. Therefore, we are subject to many of the business risks associated with a new enterprise in a niche market. Continued technical evolution, market uncertainty, evolving regulation and the resulting risk of failure of our new and existing product offerings in this market could have a material adverse effect on our ability to build and maintain market share and on our business, results of operations and financial condition. Further, there can be no assurance that we will be able to continue to compete effectively in this marketplace.

We depend on third-party suppliers for many of our products and may experience supply shortages which could have a material adverse effect on our business.

We depend on third-party suppliers for many of our vaporization products and accessory consumption products that we sell in our retail outlets. Our customers associate certain characteristics of our products, including the weight, feel, draw, flavor, packaging and other unique attributes, to the brands we market, distribute and sell. The selection of our inventory is important. In the future, we may have difficulty obtaining the products we need from our suppliers as a result of unexpected demand or production difficulties that might extend lead times, as well as constraints relating to our low cash position. Also, products may not be available to us in quantities sufficient to meet our customer demand. Any interruption in supply and/or consistency of these products may adversely impact our ability to deliver products to our customers, may harm our relationships and reputation with our customers, and may have a material adverse effect on our business, results of operations and financial condition. Interruptions in supply or consistency of products could arise for a number of reasons, including but not limited to economic and civil unrest, public health crises, embargoes, and sanctions.

Table of Contents

We may enter into new markets or lines of business that offer new products, or may expand existing lines of business, which may subject us to additional risks.

From time to time, we may enter into new markets or lines of business that entail offering new products, or may expand existing lines of business. Our historical experience does not necessarily ensure that we will be able to successfully operate expanded lines of business or will be successful in launching new products or entering new markets. In addition, external factors, such as competitive alternatives, potential conflicts of interest, either real or perceived, and shifting market preferences, in addition to our lack of experience with or knowledge of new lines of business or markets may impact our implementation, expansion and operation of new and existing lines of business. Other related risks include:

●the potential diversion of management’s attention, available cash, and other resources from our existing businesses;

●unanticipated liabilities or contingencies;

●compliance with additional regulatory burdens;

●potential damage to existing customer relationships, lack of customer acceptance or an inability to attract new customers; and

●the inability to compete effectively in the new line or expanded line of business or in a new market.

Failure to successfully manage these risks in the implementation, expansion or operation of new and existing lines of business and markets or the offering of new products or services could have a material adverse effect on our reputation, business, results of operations and financial condition.

We may be unable to identify or contract with new suppliers in the event of a disruption to our supply.

In the event of a disruption to our supply of product inventory and in respect of the products we manufacture, we would have to identify new suppliers that can meet our needs. Only a limited number of suppliers may have the ability to produce certain products we sell at the volumes we need, and it could be costly or time-consuming to locate and approve such alternative sources. Moreover, it may be difficult or costly to find suppliers to produce small volumes of products in the event we are looking only to supplement our current supply as suppliers may impose minimum order requirements. In addition, we may be unable to negotiate pricing or other terms with our existing or new suppliers as favorable as those we currently enjoy. We cannot guarantee that a failure to adequately replace or supplement our existing suppliers would not have a material adverse effect on our business, results of operations and financial condition.

Demand for the products we distribute could decrease if the trend of our suppliers selling products directly to consumers or retailers continues or accelerates.

Retailers and consumers of vaporization products and consumption accessories have historically purchased certain amounts of these products directly from suppliers. Recently, direct to consumer sales of vaporization products and consumption accessories have accelerated, consistent with broader sales trends. If our customers were to increase their purchases of products directly from suppliers, or if suppliers further increase their efforts to sell such products directly to consumers or retailers, we could experience a significant decrease in our business, results of operations and financial condition. These, or other developments that remove us from, or limit our role in, the distribution chain, may harm our competitive position in the marketplace and reduce our sales and earnings and adversely affect our business.

We are vulnerable to third-party transportation risks, including governmental laws and common carriers’ policies that prevent the shipment of the types of products we sell.

We depend on fast and efficient shipping services to obtain our inventory and distribute our products that we manufacture. Any prolonged disruption of these services may have a material adverse effect on our business, financial condition and results of operations. Rising costs associated with transportation services used by us to receive or deliver our products, including tariffs, as well as delays as a result of factors outside of our control have had and may continue to have a material adverse effect on our business, financial condition and results of operations.

Table of Contents

The loss of a significant supplier would require us to rely more heavily on our other existing suppliers or to develop relationships with new suppliers. Such a loss may have an adverse effect on our product offerings and our business.

We generally make our purchases through purchase orders. As a result, we have experienced and may in the future experience inventory shortages or price increases on certain products. Furthermore, our industry occasionally experiences significant product supply shortages, and we sometimes experience customer order backlogs due to the inability of certain suppliers to make available to us certain products as needed. We cannot provide assurances that suppliers will maintain an adequate inventory of products to fulfill our orders on a timely basis, or at all, or that we will be able to obtain particular products on favorable terms, or at all. Additionally, we cannot provide assurances that product lines currently offered by suppliers will continue to be available to us. A decline in the supply or continued availability of the products of our suppliers, or a significant increase in the price of those products, could reduce our sales and negatively affect our operating results.

In addition, some of our suppliers have the ability to terminate their relationships with us at any time, or to decide to sell, or increase their sales of, their products through other resellers or channels. Although we believe there are numerous suppliers with the capacity to supply the products we distribute, the loss of one or more of our major suppliers could have an adverse effect on our product offerings and our business. Such a loss would require us to rely more heavily on our other existing suppliers, develop relationships with new suppliers or undertake our own manufacturing, which may cause us to pay higher prices for products due to, among other things, a loss of volume discount benefits currently obtained from our major suppliers. Any termination, interruption or adverse modification of our relationship with a key supplier or a significant number of other suppliers would likely adversely affect our operating income, cash flow and future prospects.

If we fail to maintain proper inventory levels, our business could be harmed.

We often purchase key products in quantity from suppliers to maintain inventory. We do this to minimize purchasing costs, the time necessary to stock our retail outlets and ameliorate the risk of non-delivery. However, we may be unable to sell the products we have purchased. Inventory levels in excess of customer demand have previously and may in the future, result in inventory write-downs, and the sale of excess inventory at discounted prices could significantly impair our brand image and have a material adverse effect on our business, results of operations and financial condition. Conversely, if we underestimate demand for our products or if we fail to acquire the products that we require at the time we need them, we may experience inventory shortages. Inventory shortages might delay shipments to customers, reduce revenue, negatively impact customer relationships and diminish brand loyalty, which in turn could have a material adverse effect on our business, results of operations and financial condition.

Our success is dependent in part upon our ability to distribute popular products from new suppliers, as well as the ability of our existing suppliers to develop and market products that meet changes in market demand or regulatory requirements.

Many of the products we sell are generally subject to rapid changes in marketplace demand and regulatory requirements. For example, recent laws and regulations have prohibited the sale of certain types of products that we previously sold. Our success is dependent, in part, upon the ability of our suppliers to develop and market products that meet these changes. Our success is also dependent on our ability to develop relationships with and sell products from new suppliers that address these changes in market demand or regulatory requirements. To the extent products that address recent changes are not available to us, or are not available to us in sufficient quantities or on acceptable terms, we could encounter increased competition, which would likely adversely affect our business, results of operations and financial condition.

Changes in our customer, product or competition mix could cause our product margin and results of operations to fluctuate.

From time to time, we may experience changes in our customer mix, our product mix or our competition mix. Changes in our customer mix may result from geographic expansion or contractions, legislative, regulatory or enforcement priority changes affecting the products we distribute, selling activities within current geographic markets and targeted selling activities to new customer sectors. Changes in our product mix may result from marketing activities to existing customers, the needs of existing and prospective customers and from regulatory and legislative changes. Changes in our competition mix may result from new competitors entering into our business segment or existing competitors growing their operations. If customer demand for lower-margin products increases and demand for higher-margin products decreases, our business, results of operations and financial condition may suffer.

Our ability to distribute certain licensed brands and to use or license certain trademarks may be terminated or not renewed.

We are reliant upon brand recognition in the markets in which we compete, as the industry is characterized by a high degree of brand loyalty and a reluctance of consumers to switch to substitute or unrecognizable brands. Any loss in brand-name appeal to our existing customers as a result of product offerings changes could have a material adverse effect on our business, results of operations and financial condition.

Table of Contents

We may not be successful in maintaining the consumer brand recognition and loyalty of our products.

We compete in a market that relies on innovation and the ability to react to evolving consumer preferences. The vaporization products and consumption accessories industry is subject to changing consumer trends, demands and preferences. Therefore, products once favored may, over time, become disfavored by consumers or no longer perceived as the best option. Consumers in the vaporizer market have demonstrated a degree of brand loyalty, but suppliers must continue to adapt their products in order to maintain their status among customers as the market evolves. Our continued success depends in part on our ability and our supplier’s ability to continue to differentiate the brand names we carry at our locations and those that we own or license. Trends within the vaporization products and consumption accessories industry change often and our failure to anticipate, identify or react to changes in these trends could, among other things, lead to reduced demand for our products. Factors that have previously and may continue to affect consumer perception of our products include health trends and attention to health concerns associated with herbs, oils or other materials used with vaporizers, price-sensitivity in the presence of competitors’ products or substitute products and trends in favor of new vaporization products or technology consumption accessories products that are currently being researched and produced by participants in our industry. For example, in recent years, we have witnessed a shift in consumer purchases from vaporizers designed for dry herbs to those designed for liquids or wax type concentrates. A failure to react to similar trends in the future could enable our competitors to grow or establish their brands’ market share in these categories before we have a chance to respond.

Regulations have recently been and are likely to continue to be enacted in the future that would make it more difficult to appeal to consumers or to leverage the brands that we distribute, own or license. Furthermore, even if we are able to continue to distinguish our products, there can be no assurance that the sales, marketing and distribution efforts of our competitors will not be successful in persuading consumers of our products to switch to their products. Some of our competitors have greater access to resources than we do, which better positions them to conduct market research in relation to branding strategies or costly marketing campaigns. Any loss of consumer brand loyalty to our products or in our ability to effectively brand our products in a recognizable way will have a material effect on our ability to continue to sell our products and maintain our market share, which could have a material adverse effect on our business, results of operations and financial condition.

New products face intense media attention and public pressure.

Many of the vaporizers and other products are new to the marketplace as they change over time. Certain members of the media, politicians, government regulators and advocacy groups, including independent doctors, have called for the adoption of regulation for limiting sale of certain products and in some cases, an outright ban of such products pending increased regulatory review and a further demonstration of safety. Product bans would likely have the effect of adversely affecting our sales and marketing efforts of certain products in locations.

Our success depends, in part, on the quality and safety of our products, as well as the perception of quality and safety in the vaporization products and consumption accessories industry generally.

Our success depends, in part, on the quality and safety of the products we sell, including manufacturing issues, health concerns about the substances consumed using the products we sell, and unforeseen product misuse. Even a single incident of product defect or misuse, whether relating to products sold by us or just to our industry generally, could result in significant harm to our reputation. If any of our product offerings are found to be, or are perceived to be, defective or unsafe, or if they otherwise fail to meet our customers’ standards, our sales may be affected, and we could lose market share for our stores and/or become subject to liability claims to the extent a retailer could be responsible, any of which could result in a material adverse effect on our business, results of operations and financial condition.

Damage to our reputation, or that of any of our key suppliers or their brands, could affect our business performance.

The success of our business depends in part upon the positive image that consumers have of the brands we distribute. Incidents, publicity or events arising accidentally or through deliberate third-party action that harm the integrity or consumer support of the products we sell could affect the demand for those products. Unfavorable media, whether accurate or not, related to our industry, to us, or to the products we sell could negatively affect our sales, and consequently adversely affect our corporate reputation, stock price, ability to attract high-quality talent, or the performance of our business. Additional negative publicity or commentary on social media outlets also could cause consumers to react rapidly by avoiding the products we produce and those we sell, which could have a material adverse effect on our business, results of operations and financial condition.

Table of Contents

Significant increases in state and local regulation of our vaporizer products have been proposed and enacted, and are likely to continue to be proposed and enacted in numerous jurisdictions.

As discussed under the heading “Government Regulations – Vaping Products” above, there has been increasing activity on the provincial and local levels with respect to scrutiny of vaporizer products. National, provincial and local governmental bodies have indicated that vaporization products and certain other consumption accessories may become subject to new laws and regulations. If one or more of the provinces in which we operate bring actions that prevent us from selling certain or all of our vaporizer products, we would be required to cease sales and distribution of those products at locations therein, which could have a material adverse effect on our business, results of operations and financial condition.

The Canadian federal government, as well as certain provincial governments have passed or propose to pass legislation which will restrict the extent to which e-cigarettes, e-liquid and other vaping products may be displayed or sold. Additionally, Canadian laws require health warnings to be placed on certain vaporizer products, which could reduce the appeal of these products. These regulations and future regulations could have a material adverse effect on our business, results of operations and financial condition.

Based on regulations surrounding health-related concerns related to the use of some of our vaporizer products, possible new or increased taxes by government entities intended to reduce use of our products or to raise revenue, additional governmental regulations concerning the marketing, labeling, packaging or sale of some of our products, negative publicity resulting from actual or threatened legal actions against us or other companies in our industry, all may reduce demand for, or increase the cost of, certain of our products, which could adversely affect our profitability and ultimate success.

If provinces continue the trend of imposing, expanding, and increasing taxes on vaporizer products, it could materially and adversely affect our business.

Supply of our products and increased sales taxes and economic conditions will affect our sales. Many customers buy our products with their discretionary income. To the extent taxes make our offered products more expensive, such as on vaporization products and consumption accessories, there may be a decline in sales during recessionary periods or at other times when disposable income is lower and taxes may be higher.

We may become involved in regulatory or agency proceedings, investigations, prosecutions, and audits.

Our business, and the businesses of the suppliers from which we acquire products we sell, requires compliance with many laws and regulations. Failure to comply with these laws and regulations could subject us or suppliers to regulatory or agency proceedings, investigations, or prosecutions, and could also lead to damage awards, fines and penalties. We or such suppliers may become involved in a number of government proceedings, investigations and audits. The outcome of any government proceedings, investigations, prosecutions, audits, and other contingencies could harm our reputation or the reputations of the brands that we sell, require us to take, or refrain from taking, actions that could harm our operations or require us to pay substantial amounts of money, harming our financial condition. There can be no assurance that any pending or future regulatory or agency proceedings, investigations and audits will not result in substantial costs or a diversion of management’s attention and resources or have a material adverse impact on our business, financial condition and results of operations.

We are subject to increasing international control and regulation.

The World Health Organization’s Framework Convention on Tobacco Control (“FCTC”) is the first international public health treaty that establishes a global agenda to reduce initiation of tobacco use and regulate tobacco in an effort to encourage tobacco cessation. Over 180 governments worldwide have ratified the FCTC, including Canada. The FCTC has led to increased efforts to reduce the supply of and demand for tobacco products and to encourage governments to further regulate the tobacco industry. The tobacco industry and others expect significant regulatory developments to take place over the next few years, driven principally by the FCTC.

To the extent our existing or future products become subject to international regulatory regimes that we are unable to comply with or fail to comply with, they may have a material adverse effect on our business, results of operations and financial condition.

Changes in our credit profile may affect our relationship with our suppliers, which could have a material adverse effect on our liquidity.

Changes in our credit profile may affect the way our suppliers view our ability to make payments and may induce them to shorten the payment terms of their invoices. Given the large dollar amounts and volume of our purchases from suppliers, a change in payment terms may have a material adverse effect on our liquidity and our ability to make payments to our suppliers and, consequently, may have a material adverse effect on us.

Table of Contents

We face intense competition and may fail to compete effectively.

The vaporization products and consumption accessories industry is characterized by brand recognition and loyalty, with product quality features, price, marketing and packaging constituting the primary methods of competition. Competition in the vaporization products and consumption accessories industry is particularly intense, and the market is highly fragmented.

Product defects could increase our expenses, damage our reputation or expose us to liability.

We may not be able to adequately address product defects. Product defects in vaporizers and other accessories may harm the health or safety of our end-consumers. In addition, remedial efforts could be particularly time-consuming and expensive if product defects are only found after we have sold the defective product in volume. Any actual or perceived defects in our products could result in unsold inventory, product recalls, repairs or replacements, damage to our reputation, increased customer service costs and other expenses, as well as divert management attention and expose us to liabilities. Furthermore, a product liability claim brought against us by our customers or end-consumers could be time-consuming and costly to defend and, if successful, could require us to make significant payments.

We may not have adequate insurance for potential liabilities, including liabilities arising from litigation.

In the ordinary course of business, we may become the subject of various claims, lawsuits and governmental proceedings seeking damages or other remedies concerning our commercial operations, the products we distribute, our employees and other matters, including potential claims by individuals alleging injury or other harm caused by the products we distribute. Some of these claims may relate to the activities of businesses that we have acquired, even though these activities may have occurred prior to our acquisition of the businesses. The products we distribute may contain lithium ion or similar type batteries that can explode or release hazardous substances. In addition, defects in the products we distribute could result in death, personal injury, property damage, pollution, release of hazardous substances or damage to equipment and facilities. Actual or claimed defects in the products we distribute may give rise to claims against us for losses and expose us to claims for damages.

We maintain insurance to cover certain of our potential losses, and we are subject to various self-retentions, deductibles and caps under our insurance. We face the following risks with respect to our insurance coverage:

●we may not be able to continue to obtain insurance on commercially reasonable terms;

●we may incur losses from interruption of our business that exceed our insurance coverage;

●we may be faced with types of liabilities that will not be covered adequately or at all by our insurance;

●our insurance carriers may not be able to meet their obligations under the policies; or

●the dollar amount of any liabilities may exceed our policy limits.

Even a partially uninsured claim, if successful and of significant size, could have a material adverse effect on us. Finally, even in cases where we maintain insurance coverage, our insurers may raise various objections and exceptions to coverage that could make uncertain the timing and amount of any possible insurance recovery.

We may become subject to significant product liability litigation.

The tobacco and e-cigarette industries have experienced and continue to experience significant product liability litigation and other claims, such as those related to marketing of tobacco and e-cigarettes to minors. As a result of their relative novelty, electronic cigarette, vaporizer product and other consumption product manufacturers, suppliers, distributors and sellers have only recently become subject to litigation. While we have not been a party to any product liability litigation, several lawsuits have been brought against other manufacturers and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. We may be subject to similar claims in the future relating to our vaporizer products. We may also be named as a defendant in product liability litigation against one of our suppliers by association, including in class action lawsuits. In addition, we may see increasing litigation over our vaporizer products or the regulation of our products as the regulatory regimes surrounding these products develop. We may face substantial costs due to increased product liability litigation relating to new regulations or other potential defects associated with our vaporizer and other consumption products, including litigation arising out of faulty devices or improper usage, which could have a material adverse effect on our business, results of operations and financial condition.

There can be no assurances that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of products.

Table of Contents

The scientific community has not yet extensively studied the long-term health effects of the use of vaporizers, electronic cigarettes or e-liquids products.

Vaporizers, electronic cigarettes and related products were recently developed, and therefore the scientific community has not had a sufficient period of time to study the long-term health effects of their use. Currently, there is no way of knowing whether these products are safe for their intended use. If the scientific community were to determine conclusively that use of any or all of these products poses long-term health risks, market demand for these products and their use could materially decline. Such a determination could also lead to litigation and significant regulation. Loss of demand for our product, product liability claims and increased regulation stemming from unfavorable scientific studies on these products could have a material adverse effect on our business, results of operations and financial condition.

Reliance on information technology means a significant disruption could affect our communications and operations.

We increasingly rely on information technology systems for our internal communications, controls, reporting and relations with customers, vendors and suppliers, and information technology is becoming a significantly important tool for our sales staff. Our marketing and distribution strategy is dependent upon our ability to closely monitor consumer and market trends on a highly specified level, for which we are reliant on our sophisticated data tracking systems, which are susceptible to disruption or failure. In addition, our reliance on information technology exposes us to cyber-security risks, which could have a material adverse effect on our ability to compete. Security and privacy breaches may expose us to liability and cause us to lose customers, or may disrupt our relationships and ongoing transactions with other entities with whom we contract throughout our supply chain. The failure of our information systems to function as intended, or the penetration by outside parties intent on disrupting business processes, could result in significant costs, loss of revenue, assets or personal or other sensitive data and reputational harm.

Internet security poses a risk to our e-commerce sales.

At present, we generate a portion of our sales through e-commerce sales on our own websites. We manage our websites and e-commerce platform internally and, as a result, any compromise of our security or misappropriation of proprietary information could have a material adverse effect on our business, results of operations and financial condition. We rely on encryption and authentication technology licensed from third parties to provide the security and authentication necessary to effect secure Internet transmission of confidential information, such as credit and other proprietary information. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments may result in a compromise or breach of the technology used by us to protect client transaction data. Anyone who is able to circumvent our security measures could misappropriate proprietary information or cause material interruptions in our operations. We may be required to expend significant capital and other resources to protect against security breaches or to minimize problems caused by security breaches. To the extent that our activities or the activities of others involve the storage and transmission of proprietary information, security breaches could damage our reputation and expose us to a risk of loss and/or litigation. Our security measures may not prevent security breaches. Our failure to prevent these security breaches may result in consumer distrust and may adversely affect our business, results of operations and financial condition.

Security and privacy breaches may expose us to liability and cause us to lose customers.

Provincial and national laws require us to safeguard our customers’ financial information, including credit information, as well as our employees’ information. Although we have established security procedures to protect against identity theft and the theft of information of our customers, distributors, consumers, and employees, our security and testing measures may not prevent security breaches and breaches of privacy may occur, which would harm our business. Typically, we rely on encryption and authentication technology licensed from third parties to enhance transmission security of confidential information in relation to financial and other sensitive information that we have on file. Advances in computer capabilities, new discoveries in the field of cryptography, inadequate facility security or other developments may result in a compromise or breach of the technology used by us to protect customer data. Any compromise of our security could harm our reputation or financial condition and therefore, our business. In addition, a party who is able to circumvent our security measures or exploit inadequacies in our security measures, could, among other effects, misappropriate proprietary information, cause interruptions in our operations or expose customers and other entities with which we interact to computer viruses or other disruptions. Actual or perceived vulnerabilities may lead to claims against us. To the extent the measures we have taken prove to be insufficient or inadequate, we may become subject to litigation or administrative sanctions, which could result in significant fines, penalties or damages and harm to our reputation.

Table of Contents

If the methodologies of internet search engines are modified, traffic to our websites and corresponding consumer origination volumes could decline.

We depend in part on various internet search engines, including Google® and others to direct traffic to our websites. Our ability to maintain the number of visitors directed to our websites by search engines through which we distribute our content is not entirely within our control. Our competitors’ search engine optimization (“SEO”) efforts may result in their websites receiving a higher search result page ranking than ours, or Internet search engines could revise their methodologies, which could adversely affect the placement of our search result page ranking. If search engine companies modify their search algorithms in ways that are detrimental to our consumer growth or in ways that make it harder for our customers to access or use our websites, or if our competitors’ SEO efforts are more successful than ours, our consumer engagement and number of consumers could decline. Any reduction in the number of consumers directed to our websites could negatively affect our ability to earn revenue. If traffic on our websites declines, we may need to employ more costly resources to replace lost traffic, and such increased expense could adversely affect our business, results of operations and financial condition.

Our intellectual property may be infringed and we may be unable to secure or maintain all the intellectual property required to sell all of our offerings.

We currently rely on trademark and other intellectual property rights to establish and protect the brand names and logos we own or license on some of the products we distribute. Third parties have in the past infringed, and may in the future infringe, on these trademarks and our other intellectual property rights. Our ability to maintain and further build brand recognition is dependent on the continued use of these trademarks, service marks and other proprietary intellectual property, including the names and logos we own or license. Despite our attempts to ensure these intellectual property rights are protected, third parties may take actions that could materially and adversely affect our rights or the value of this intellectual property. Any litigation concerning our intellectual property rights or the intellectual property rights of our suppliers, whether successful or unsuccessful, could result in substantial costs to us and diversions of our resources. Expenses related to protecting our intellectual property rights or the intellectual property rights of our suppliers, the loss or compromise of any of these rights or the loss of revenues as a result of infringement could have a material adverse effect on our business, results of operations and financial condition, and may prevent the brands we own or license, or are owned or licensed by our suppliers, from growing or maintaining market share. There can be no assurance that any trademarks or common marks that we own or license, or are owned or licensed by our suppliers, will not be challenged in the future, invalidated or circumvented or that the rights granted thereunder or under licensing agreements will provide us or our suppliers competitive advantages. We are dependent on the validity, integrity and intellectual property of our suppliers and their efforts to appropriately register, maintain and enforce intellectual property in all jurisdictions in which their products are sold.

We devote a portion of our resources to the registration and protection of our trademarks and to anti-counterfeiting efforts. Despite these efforts, we regularly discover products that infringe on our proprietary rights or that otherwise seek to mimic or leverage our intellectual property or the intellectual property of our suppliers. Counterfeiting and other infringing activities typically increase as brand recognition increases. Counterfeiting and other infringement of our intellectual property could divert away sales, and association of our brands with inferior counterfeit reproductions or third party labels could adversely affect the integrity and reputation of our brands.

We are subject to the risks of exchange rate fluctuations.

Currency movements and suppliers’ price increases relating to currency exchange rates are significant factors affecting our cost of sales. Some of our products are purchased from suppliers located in foreign countries and we make payments for our products in numerous currencies. Thus, we bear certain foreign exchange rate risk for certain of our inventory purchases. In addition, we recently expanded our footprint in Canada, and as part of our strategy, we may undertake further international expansion. As a result, in the future, we may be more sensitive to the risks of exchange rate fluctuations, which may have a material adverse effect on our business, results of operations and financial condition.

Our failure to comply with certain environmental, health and safety regulations could materially and adversely affect our business.

The storage, distribution and transportation of some of the products that we sell are subject to a variety of national, provincial and local environmental regulations. We are also subject to operational, health and safety laws and regulations. Our failure to comply with these laws and regulations could cause a disruption in our business, an inability to maintain our warehousing resources, additional and potentially significant remedial costs and damages, fines, sanctions or other legal consequences that could have a material adverse effect on our business, results of operations and financial condition. In addition, changes in environmental, employee health and safety or other laws, more vigorous enforcement thereof or other unanticipated events could require extensive changes to our operations or give rise to material liabilities, which could have a material adverse effect on our business, financial condition and results of operations.

Table of Contents

Risks Relating to Our Current Controlled Environment Agriculture Business

There is no assurance that we will be able to convert our backlog related to our controlled environment agriculture operations into revenue or make a profit.

While we continue our controlled environment agriculture business, we may be unable to convert the full contract value of our backlog in a timely manner, or at all. We inconsistently convert our backlog into revenue on a quarter-to-quarter basis. The performance of our obligations under a sales contract, and the timing of our revenue recognition, is dependent upon our customers’ ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can use our services and take possession of the equipment we provide. Our sales contracts currently are not time specific as to when our customers are required to take delivery of our services and equipment. More recently, we determined that some of our new construction facility projects are becoming larger and more complex and, as a result, delays were more likely due to licensing and permitting, lack of, or delay in, funding, staged facility construction, and/or the shifting priorities of certain customers with multiple facility projects in progress at one time. Even if we obtain more customers, or increase the average size of our projects, there is no guarantee that we will be able to generate a profit. Because we are a small company with limited capital, limited products and services, and limited marketing activities, we may not be able to generate sufficient revenue to operate profitably. If we cannot operate profitably, we may have to suspend or cease operations.

Our operating results may fluctuate significantly based on customer acceptance of our services and products, industry uncertainty, project financing concerns, and regulatory requirements. As a result, period-to-period comparisons of our results of operations are unlikely to provide a good indication of our future performance.

Management expects that, under typical operating conditions, we will experience substantial variations in our revenues and operating results from quarter to quarter. This variance may change with fundamental changes in our operations.

In our controlled environment agriculture operations, we have been experiencing a decline in revenues, which has also affected our operating results. Our revenue recognition in our controlled environment agriculture operations is dependent upon shipment of the equipment portions of our sales contracts, which, in many cases, may be delayed while our customers complete permitting, prepare their facilities for equipment installation or obtain project financing. Uncertainty in the controlled environment agriculture industry, project financing concerns, and the licensing and qualification of our prospective customers, which are out of our control, make it difficult for us to predict when we will recognize revenue. If customers are unable to obtain licensing, permitting or financing, our sales and revenue will decline, resulting in a reduction in our operating income or possible increase in losses.

If we do not successfully have additional products and services, or if those products and services are not successfully commercialized, we could lose revenue opportunities.

Our future success depends, in part, on our ability to expand our product and service offerings in our current operational sector or otherwise expand or change our operations. The processes of identifying and commercializing products are complex and uncertain, and if we fail to accurately predict customers’ changing needs and emerging technological or other trends, then our business could be harmed. We have already and may have to continue to commit significant resources to commercializing products before knowing whether our investments will result in products the market will accept. We may be unable to differentiate our products from those of our competitors, and our products may not be accepted by the market. There can be no assurance that we will successfully identify additional product opportunities, develop and bring products to market in a timely manner, or achieve market acceptance of our products or that products and technologies developed by others will not render our products or technologies obsolete or non-competitive. Furthermore, we may not execute successfully on commercializing those products because of errors in product planning or timing, technical hurdles that we fail to overcome in a timely fashion, or a lack of appropriate resources. This could result in competitors providing those solutions before we do and a reduction in revenue and earnings.

Our future success depends on our ability to grow and expand our customer base. Our failure to achieve such growth or expansion could materially harm our business.

Our success depends on us achieving greater and broader acceptance of our products and services in our current and proposed business operations. This will require us to expand our ~~commercial~~industrial customer base and win larger contracts. There can be no assurance that customers will purchase our services or products or that we will continue to expand our customer base. If we are unable to effectively market or expand our product and service offerings, we will be unable to grow and expand our business or implement our business strategy. This could materially impair our ability to increase sales and revenue, and materially and adversely affect our margins, which could harm our business and cause our stock price to decline.

Our suppliers in our CEA operations could fail to fulfil our orders for parts used to assemble our products, which would disrupt our business, increase our costs, harm our reputation, and potentially cause us to lose our market. 38

~~We depend~~Table ~~on third party suppliers around the world, including those in The People’s Republic~~ of China, for materials used in our CEA operations, to assemble our products. Any of these suppliers could fail to produce products to our specifications or in a workmanlike manner and may not deliver the material or products on a timely basis. Our suppliers may also have to obtain inventories of the necessary parts and tools for production. Any change in our suppliers’ approach to resolving production issues could disrupt our ability to fulfil orders and could also disrupt our business due to delays in finding new suppliers, providing specifications and testing initial production.Contents

Our suppliers in our controlled environment agriculture operations could fail to fulfil our orders for parts used to assemble our products, which would disrupt our business, increase our costs, harm our reputation, and potentially cause us to lose our market.

We depend on third party suppliers around the world, including those in The People’s Republic of China ("PRC"), for materials used in our controlled environment agriculture operations, to assemble our products. Any of these suppliers could fail to produce products to our specifications or in a workmanlike manner and may not deliver the material or products on a timely basis. Our suppliers may also have to obtain inventories of the necessary parts and tools for production. Any change in our suppliers’ approach to resolving production issues could disrupt our ability to fulfil orders and could also disrupt our business due to delays in finding new suppliers, providing specifications and testing initial production.

Equipment failures or poor performance may negatively impact our business.

We rely on third party manufacturers for equipment used in ~~CEA~~controlled environment agriculture operations which we sell or lease. From time to time, such equipment may not perform to specifications or to our customers’ satisfaction. Such equipment deficiencies may lead to down time impacting our revenue. Further, frequent downtime at customers’ sites due to equipment failures may result in such customers generating less revenue and increasing credit default risk. In addition, these failures may also result in additional time spent by our personnel, decreasing profit margins on certain ancillary services.

The failure of equipment supplied by third parties may also result in breach of contract and warranty claims from our customers. Whether or not we will be able to pass the responsibility for equipment failures that are not of our making will depend on many factors. We, however, will take all action necessary to identify the correct responsible party and pass through any responsibility in respect of an equipment or other failure. We may not be successful in such action and may ultimately be responsible for damages.

~~We have~~Changes ato ~~concentration~~United ofStates ~~customers~~tariff and ~~suppliers,~~import/export ~~which~~regulations ~~could~~may ~~affect~~have a material adverse effect on our business, financial condition and results of operations.

~~Two customers~~The ~~accounted~~United ~~for~~States ~~45%~~has recently enacted and ~~10%~~proposed to enact significant new tariffs. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of ~~the~~U.S. ~~Company’s~~trade ~~revenue~~policy ~~for~~and ~~the~~there ~~year~~has ~~ended~~been ~~December~~ongoing 31discussion and commentary regarding potential significant changes to U.S. trade policies, ~~2024~~treaties and tariffs. ~~Three~~For ~~customers~~example, ~~accounted~~on ~~for 37%~~February 20, ~~21%~~2026, ~~and~~the ~~12%~~United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977. Following the ~~Company~~Supreme Court’s ~~revenue~~decision, ~~for~~ the ~~year~~Trump ~~ended~~Administration ~~December~~has 31implemented a baseline 10% tariff on imports from most U.S. trading partners, ~~2023~~with significantly higher rates applicable to goods from specific countries and sectors. The ~~Company’s~~U.S. ~~accounts~~Trade ~~receivable~~Representative ~~from~~has ~~two customers~~also ~~made~~proposed upnew 61Section 301 tariffs of 10% ~~and~~to 3612.5%, ~~respectively,~~on ofgoods from 59 countries and the ~~total~~European ~~balance~~Union asfollowing ofan ~~December~~investigation ~~31,~~into ~~2024~~alleged forced labor-related trade practices. ~~The~~There ~~Company’s~~remains ~~accounts~~substantial ~~receivable~~uncertainty ~~from three~~regarding ~~customers~~the ~~made~~duration upof ~~59%~~existing and newly announced tariffs, ~~29%~~potential changes or pauses to such tariffs, tariff levels, and ~~12%~~whether further additional tariffs or other retaliatory actions may be imposed, ~~respectively~~modified, ofor ~~the~~suspended. ~~total~~Shifts ~~balance~~in astrade ofpolicy ~~December~~– 31whether through legislation, ~~2023.~~executive ~~One~~action, ~~supplier~~or ~~accounted~~international ~~for~~negotiation-could ~~80% of~~alter the ~~Company’s~~global ~~purchases~~trade oflandscape ~~inventory~~and affect supply chains, pricing, and demand for ~~the~~goods ~~year~~and ~~ended~~services. ~~December~~These 31developments, ~~2024~~or the perception that such changes may occur, have and ~~three~~could ~~suppliers~~continue ~~accounted~~to ~~for~~have ~~34%~~a material adverse effect on global economic conditions, ~~17%~~contribute to volatility in financial markets, and ~~16% of~~disrupt international trade, including trade between the ~~Company’s~~U.S. ~~purchases~~and ofits ~~inventory~~key ~~for~~partners. There continues to exist significant uncertainty about the ~~year~~future ~~ended~~relationship ~~December~~between 31the U.S. and other countries with respect to such trade policies, ~~2023~~treaties and tariffs. ~~Our~~These ~~results~~developments, or the perception that any of ~~operations~~them ~~will~~could beoccur, ~~significantly~~may ~~affected if~~have wea ~~lose~~material ~~our~~adverse ~~primary~~effect ~~customer~~on global economic conditions and the stability of global financial markets, orand ifmay wesignificantly ~~are~~reduce ~~not~~global ~~able~~trade toand, ~~replace~~in particular, trade between the ~~customer~~impacted atnations and the ~~conclusion~~U.S. Any of these factors could depress economic activity and restrict our ~~services~~access to ~~that~~suppliers ~~customer.~~or ~~Our~~ customers and have a material adverse effect on our business, financial condition and results of operations. ~~will~~As ~~also~~the bePRC ~~impacted~~is ~~negatively~~a ifparticular focus of the tariffs and trade policies, and the Company uses products from the PRC in its product offerings, we ~~are~~expect ~~not~~that ~~able~~there towill ~~find~~be ~~suppliers~~disruption in that aspect of our business. The progress and continuation of trade negotiations between the U.S. and China continues to ~~replace~~be ~~those~~uncertain ~~that~~and wea ~~currently~~further ~~use~~escalation of the trade war remains a possibility. ~~Overall~~The imposed tariffs as well as the potential for additional tariffs or trade barriers by the U.S., ~~our operations~~China ~~and~~or other countries have, ~~therefore~~and will continue to have, ~~financial~~an adverse effect on our results ~~are~~of ~~dependent~~operations onand aprofit ~~limited~~margins. ~~number~~We are in the process of ~~customers~~searching ~~and~~for alternative suppliers, but there is no assurance that we will be able to find other suppliers at a price that will be reasonable.

International trade disputes could result in tariffs and other protectionist measures that could adversely affect the Company’s business.

Tariffs could increase the cost of our products and the components and raw materials that go into making them. These increased costs could adversely impact the gross margin that we earn on sales of our products. Tariffs could also make our products more expensive for customers, which could make our products less competitive and reduce customer demand. Countries may also adopt other protectionist measures that could limit our ability to offer our products and services.

14 39

Table of Contents

Our inability to effectively protect our intellectual property would adversely affect our ability to compete effectively, our revenue, our financial condition, and our results of operations.

We may be unable to obtain intellectual property rights to effectively protect our branding, products, and other intangible assets. Our ability to compete effectively may be affected by the nature and breadth of our intellectual property rights. While we intend to defend against any threats to our intellectual property rights, there can be no assurance that any such actions will adequately protect our interests. If we are unable to secure intellectual property rights to effectively protect our branding, products, and other intangible assets, our revenue and earnings, financial condition, or results of operations could be adversely affected.

We also rely on non-disclosure and non-competition agreements to protect portions of our intellectual property portfolio. There can be no assurance that these agreements will not be breached, that we will have adequate remedies for any breach, that third parties will not otherwise gain access to our trade secrets or proprietary knowledge, or that third parties will not independently develop competitive products with similar intellectual property.

We may become subject to additional regulation of ~~CEA~~controlled ~~facilities~~environment ~~that~~agriculture ~~are unrelated to cannabis~~facilities.

Our engineering and design services and solutions are focused on ~~CEA~~controlled environment agriculture facilities that are able to grow a wide variety of crops ~~other than that of cannabis~~, such as leafy greens (kale, Swiss chard, mustard, cress), microgreens (leafy greens harvested at the first true leaf stage), ethnic vegetables and small fruits (such as strawberries, blackberries and raspberries), bell peppers, cucumbers, and tomatoes. Some of these crops and their growing methodologies are subject to regulation by the United States Food and Drug Administration, environmental agencies, public utility agencies and other federal, state or foreign agencies. Changes to any regulations and laws that complicate the design and engineering of a subject ~~CEA~~controlled environment agriculture facility, such as wastewater treatment and electricity-related mandates, make it possible that potential related zoning and enforcement could decrease the demand for our services, and in turn negatively impact our revenues and business opportunities.

The ~~CEA~~ controlled environment agriculture industry is highly competitive, and we have less capital and resources than many of our competitors, which may give them an advantage in developing and marketing services and products similar to ours or make our services and products obsolete.

There are many competitors in the ~~CEA~~controlled ~~industry,~~environment ~~including~~agriculture ~~some companies that focus on the cannabis~~ industry. These companies generally offer products and services similar or the same as those offered by us. There can be no guarantees that in the future other companies will not enter this arena by developing products that are in direct competition with us or even superior in quality or price. The barriers to entry into the ~~CEA~~controlled environment agriculture industry are not ~~significant~~insignificant. Over time we anticipate growth and intensity in our competition. Some of our current and future competition may have longer operating histories, greater name recognition, larger client bases and significantly greater financial, technical, sales and marketing resources. One or more of these qualities may allow them to respond more quickly than us to market opportunities. They may be able to devote greater resources to the marketing, promotion and sale of their products and/or services. Competitors may also adopt more aggressive pricing policies and make more attractive offers to clients, employees, strategic partners, distribution channels and advertisers. Increased competition is likely to result in price reductions, reduced gross margins and a potential loss of market share.

We will be required to have top quality talent to compete in the marketplace.

We believe our success will depend in part on our ability to have skilled managerial, product development, sales and marketing, and finance personnel. Our ability to attract and retain personnel with the requisite credentials, experience and skills will depend on several factors including, but not limited to, our ability to offer competitive wages, benefits and professional growth opportunities. There can be no assurance of success in attracting and retaining such personnel. Shortages in qualified personnel could limit our ability to increase sales of existing products and services and launch new product and service offerings.

We are dependent upon certain key sales, managerial and executive personnel for our future success. If we lose any of our key personnel, our ability to implement our business strategy could be significantly harmed.

We depend on the industry knowledge, technical and financial skill, and network of business contacts of certain key employees. Our future success will depend on the continued service of these key employees or our ability to engage others who are similarly situated in the industry. While we may have employment agreements with certain of these key employees, they are free to terminate their employment with us at any time, although they may be subject to certain restrictive covenants on their post-termination activities. We do not carry key-man life insurance on the lives of our key employees. The departure of any one of our key employees could have a material adverse effect on our ability to achieve our business objective and maintain the specialized services that we offer our customers.

15 40

Table of Contents

We have a limited number of employees that may not be sufficient to service our contracts.

As a result of various factors affecting the ~~CEA~~controlled environment agriculture industry in which we operate, we have made employee reductions from time to time in the last ~~year~~several years. We believe we are operating as leanly as needed to be able to service our contract obligations. The mix of our current employees and their number may not be sufficient for our current needs and if we increase our business we will need additional employees, which may not be available. If we are not able to service our contract obligations, our business will suffer and we may be liable for contract damages.

System security risks, data protection breaches, cyber-attacks and systems integration issues could disrupt our internal operations or services provided to customers, and any such disruption could reduce our expected revenue, increase our expenses, damage our reputation and adversely affect our stock price.

Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other malicious software programs that attack or otherwise exploit any security vulnerabilities of the products that we may sell in the future, especially our SentryIQ® sensors, controls and automation platform. The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers ~~that~~ may impede our engineering, sales, manufacturing, distribution or other critical functions.

Portions of our IT infrastructure may also experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time. We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource intensive. Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes. Delayed sales, lower profits, or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation.

We incur significant costs as a result of being a public company, which will make it more difficult for us to achieve profitability.

As a public company, we incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to a company whose securities are registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as additional corporate governance requirements, including requirements under the Sarbanes-Oxley Act, and other rules implemented by the SEC. These costs will make it more difficult for us to achieve profitability.

Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.

U.S. generally accepted accounting principles (“GAAP”) and related pronouncements, implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, revenue recognition, stock-based compensation, trade promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments by our management. Changes to these rules or their interpretation or changes in underlying assumptions, estimates or judgments by our management could significantly change our reported results.

Our ability to use net operating losses to offset future taxable income may be subject to limitations.

As of December 31, 2024, the Company has U.S. federal and state net operating losses (“NOLs”) of approximately $31,985,000, of which $11,196,000 will expire, if not utilized, in the years 2034 through 2037. However, the balance of $20,789,000 NOLs generated subsequent to December 31, 2017, do not expire but may only be used against taxable income to 80%. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited. We have experienced ownership changes in the past and we may experience additional ownership changes in the future as a result of subsequent changes in our stock ownership, some of which may be outside of our control. Our September 2021 and February 2022 securities sales also will have to be taken into account for determination of any “ownership change” that we have undergone during a determination period. If an ownership change occurs and our ability to use our net operating loss carryforwards is materially limited, it would harm our post tax income by effectively increasing our future tax obligations.

We may not be able to successfully identify, consummate or integrate acquisitions or to successfully manage the impacts of such transactions on our operations.

Part of our business strategy includes evaluating and pursuing synergistic and other acquisitions. ~~Currently,~~We wehave ~~are~~recently incompleted the ~~process~~acquisition of ~~acquiring~~ Fat Panda. Material acquisitions and other strategic transactions, such as the acquisition of Fat Panda involve a number of risks, including: (i) the potential disruption of our ongoing business; (ii) the distraction of management away from the ongoing oversight of our existing business activities; (iii) incurring additional indebtedness; (iv) the anticipated benefits and cost savings of those transactions not being realized fully, or at all, or taking longer to realize than anticipated; (v) an increase in the scope and complexity of our operations; (vi) the disruption of a significant reorganization of the company; and (vii) the loss or reduction of control over certain of our assets.

The pursuit of any acquisitions may pose certain risks to us. We may not be able to identify acquisition candidates that fit our criteria for growth and profitability. Even if we are able to identify such candidates, we may not be able to acquire them on terms or financing satisfactory to us. We will incur expenses and dedicate attention and resources associated with the review of acquisition opportunities, whether or not we consummate such acquisitions.

~~Risks Related~~We tomay ~~the~~not ~~Cannabis~~have ~~Industry~~adequate insurance for potential liabilities, including liabilities arising from litigation.

~~Cannabis remains~~In ~~illegal~~the ~~under~~ordinary ~~federal~~course ~~law~~of business, we have and ~~therefore~~in the future may become the subject of various claims, ~~strict~~lawsuits ~~enforcement~~and governmental proceedings seeking damages or other remedies concerning our commercial operations, the products we distribute, our employees and other matters, including potential claims by individuals alleging injury or other harm caused by the products we distribute. Some of ~~federal~~these ~~laws~~claims ~~regarding~~may ~~cannabis~~relate to the activities of businesses that we have acquired, ~~particularly~~even ~~against~~though these activities may have occurred prior to our ~~customers~~acquisition of the businesses. The products we distribute may contain lithium ion or similar type batteries that can explode or release hazardous substances. In addition, ~~would~~ ~~likely~~defects in the products we distribute could result in ~~our~~death, ~~inability~~personal injury, property damage, pollution, release of hazardous substances or damage to ~~execute~~equipment ~~our~~and ~~business~~facilities. ~~plan~~Actual or claimed defects in the products we distribute may give rise to claims against us for losses and expose us to claims for damages.

~~Marijuana legalization~~We ismaintain ~~mixed~~insurance ~~across~~to ~~the~~cover ~~country.~~certain ~~And~~of itour ispotential ~~constantly~~losses, ~~evolving.~~and Inwe ~~four~~are ~~states~~subject ~~it continues~~ to bevarious ~~fully illegal. In the other states it is either legalized~~self-retentions, ~~available~~deductibles ~~for~~and ~~medical~~caps ~~uses~~under ~~and~~our ~~decriminalized,~~insurance. ~~available~~We ~~for~~face ~~medical~~the ~~uses,~~following ~~decriminalized,~~risks orwith ~~permitted for~~respect ~~low-tetrahydrocannabinol~~to ~~(“THC”)/high-CBD~~our ~~extracts.~~insurance coverage:

~~Under U.S. federal law, however, those activities are illegal.~~ 41

~~Cannabis, other~~Table ~~than hemp (defined by the U.S. government as Cannabis sativa L. with a THC concentration~~ of not more than 0.3% on a dry weight basis), is a Schedule I controlled substance under the U.S. Controlled Substances Act (21 U.S.C. § 801, et seq.) (the “CSA”). Even in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the CSA and are punishable by imprisonment, substantial fines and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA is a predicate for certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. The U.S. Supreme Court has ruled that the federal government has the authority to regulate and criminalize the sale, possession and use of cannabis, even for individual medical purposes, regardless of whether it is legal under state law. For over six years, however, the U.S. government has not enforced those laws against companies complying with state cannabis law and their vendors.Contents

~~The likelihood~~●we ofmay ~~any~~not ~~future~~be ~~adverse~~able enforcement against companies complying with state cannabis laws remains uncertain. The U.S. Attorney’s Office will follow established principles that govern all federal prosecutions when deciding which cannabis activities to ~~prosecute. As~~continue ~~a result, federal prosecutors could and still can use their prosecutorial discretion~~ to ~~decide~~obtain toinsurance ~~prosecute~~on ~~even~~commercially ~~state-legal~~reasonable cannabis activities. However, generally, U.S. Attorneys have not targeted state law compliant entities. The policy of not prosecuting companies complying with state cannabis laws is likely to continue under the Biden Administration.terms;

17●we may incur losses from interruption of our business that exceed our insurance coverage;

~~Additionally, since~~●we ~~2014,~~may ~~versions~~be offaced ~~the~~with ~~U.S.~~types omnibus spending bill have included a provision prohibiting the DOJ, which includes the Drug Enforcement Administration, from using appropriated funds to prevent states from implementing their medical-use cannabis laws. In USA vs. McIntosh, the U.S. Court of ~~Appeals~~liabilities ~~for the Ninth Circuit held~~ that ~~the~~will provision prohibits the DOJ from spending funds to prosecute individuals who engage in conduct permitted by state medical-use cannabis laws and who strictly comply with such laws. The court noted that, if the spending bill provision were not ~~continued,~~be ~~prosecutors~~covered ~~could~~adequately enforce against conduct occurring during the statute of limitations even while the provision was previously in force. Other courts that have considered the issue have ruled similarly, although courts disagree about which party bears the burden of proof of showing compliance or ~~noncompliance~~at ~~with~~all ~~state~~by ~~law.~~our insurance;

~~We cannot~~●our ~~predict~~insurance ~~the~~carriers ~~timing~~may ofnot ~~any~~be ~~change~~able ~~in federal law or possible changes in federal enforcement. In the unlikely event that the federal government were~~ to ~~reverse~~meet ~~its~~their ~~long-standing~~obligations ~~hands-off~~under ~~approach to~~ the ~~state~~policies; legal cannabis markets and start more broadly enforcing federal law regarding cannabis, we would likely be unable to execute our business plan, and our business and financial results would be adversely affected.or

~~Certain of our customers may be outside any protections extended to medical-use cannabis under~~ ●the ~~spending~~dollar ~~bill~~amount ~~provision~~of and more recent medical-use and research laws. This could subject them to greater and/or different federal legal and other risks as compared to businesses where cannabis is sold exclusively for medical use, which could in turn materially adversely affect our business. Furthermore, any ~~change~~liabilities ~~in the~~may ~~federal~~exceed government’s enforcement posture with respect to state-licensed cannabis sales, including the enforcement postures of individual federal prosecutors in judicial districts where we operate, could result in our ~~inability~~policy ~~to execute our business plan, and we would likely suffer significant losses with respect to our customer base, which would adversely affect our operations, cash flow and financial condition~~limits.

~~We are~~Even a partially uninsured claim, if successful and ~~will~~of besignificant ~~subject~~size, could have a material adverse effect on us. Finally, even in cases where we maintain insurance coverage, our insurers may raise various objections and exceptions to ~~applicable~~coverage ~~anti-money~~that ~~laundering~~could ~~laws~~make uncertain the timing and ~~regulations~~amount of any possible insurance recovery.

We are subject to a variety of laws and regulations in the United States and Canada that involve money laundering, financial recordkeeping and proceeds of crime, including the U.S. Currency and Foreign 125 Transactions Reporting Act of 1970 (commonly known as the Bank Secrecy Act), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended and the rules and regulations thereunder, and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States, Canada and internationally. Further, under U.S. federal law, banks or other financial institutions that provide a cannabis business with a checking account, debit or credit card, small business loan, or any other service could be found guilty of money laundering if certain other elements are met.

Despite these laws, the FinCEN Memorandum states that in some circumstances, it is permissible for banks to provide services to cannabis-related businesses without risking FinCEN enforcement. It refers to and incorporates supplementary Cole Memo guidance issued to federal prosecutors relating to the prosecution of money laundering offenses predicated on cannabis-related violations of the CSA on the same day.

Notwithstanding former Attorney General Sessions’ revocation of the Cole Memo, the status of the FinCEN Memorandum has not been affected, nor has the Department of the Treasury given any indication that it intends to rescind the FinCEN Memorandum itself. Though it was originally intended for the Cole Memo and the FinCEN Memorandum to work in tandem, the FinCEN Memorandum appears to remain in effect as a standalone document which explicitly lists the eight enforcement priorities originally cited in the rescinded Cole Memo. Although the FinCEN Memorandum remains intact, indicating that the Department of the Treasury and FinCEN intend to continue abiding by its guidance, it is unclear whether the current administration will continue to follow the guidelines of the FinCEN Memorandum.

We face risks related to civil asset forfeiture due to the regulatory environment of the cannabis industry in the United States.

Because the cannabis industry remains illegal under U.S. federal law, any property owned by participants in the cannabis industry, which are either used in the course of conducting such business, or are the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture. Even if the owner of the property were never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture. As a result, the equipment that our customers acquire from us in the United States may be subject to such seizure and forfeiture. Additionally, a broad interpretation of the law could potentially result in the seizure and forfeiture of proceeds we generate from client payments who are subject to property seizure.

Public opinion and perception of the cannabis industry may have an adverse effect on our business reputation.

Government policy changes or public opinion may also result in a significant influence over the regulation of the cannabis industry in the United States, Canada, or elsewhere. Public opinion and support for medical and adult-use marijuana has traditionally been inconsistent and varies from jurisdiction to jurisdiction. While public opinion and support appears to be improving for legalizing medical and adult-use marijuana, it remains a controversial issue subject to differing opinions surrounding the level of legalization (for example, medical marijuana as opposed to legalization in general). A negative shift in the public’s perception of cannabis in the United States or any other applicable jurisdiction could affect future legislation or regulation. Among other things, such a shift could cause state jurisdictions to abandon initiatives or proposals to legalize medical and/or adult-use cannabis, thereby limiting the number of new state jurisdictions into which we could expand. Any inability to fully implement our expansion strategy may have a material adverse effect on our business, results of operations or prospects.

We may have difficulty accessing bankruptcy courts.

Because cannabis is illegal under federal law, federal bankruptcy protection is currently not available to parties who engage in the cannabis industry or cannabis-related businesses. Recent bankruptcy rulings have denied bankruptcies for dispensaries upon the justification that businesses cannot violate federal law and then claim the benefits of federal bankruptcy for the same activity and upon the justification that courts cannot ask a bankruptcy trustee to take possession of and distribute cannabis assets as such action would violate the CSA. Therefore, we may not be able to seek the protection of the bankruptcy courts, and this could materially affect our business or our ability to obtain credit.

Our historical business efforts in Canada have presented opportunities, but no assurance can be given that our revenues and earnings will be improved on the basis of our addressing the Canadian business.

In addition to U.S. operations, we seek to sell products and services to CEA and cannabis growers in Canada, where medical and recreational cannabis has been legal since 2018 across the country both federally and provincially (subject to certain restrictions relating to CBD). We believe Canada, with its federal legal regime, represents a business opportunity for us, but we have noticed softening demand from Canadian prospects due, in part, to limited capital being available for new facilities and an overbuilding of cultivation capacity following federal legalization. As a result, Canada now appears to be in a period of correction. There can be no assurance that we will be able to make any additional sales of products or services in Canada.

Variations in state and local regulation and enforcement in states that have legalized cannabis may impose certain restrictions on cannabis-related activities that may adversely impact our revenue and earnings.

Variations exist among states that have legalized, decriminalized, or created medical cannabis programs. For example, Alaska and Colorado have limits on the number of cannabis plants that can be grown by an individual in the home. In most states, the cultivation of cannabis for personal use continues to be prohibited except by those states that allow small-scale cultivation by the individual in possession of cannabis for medicinal purposes or that person’s caregiver. Active enforcement of state laws that prohibit personal cultivation of cannabis may indirectly and adversely affect our revenue and earnings.

The cannabis industry could face strong opposition from other industries.

We believe that established businesses in other industries may have a strong economic interest in opposing the development of the cannabis industry. Cannabis may be seen by companies in other industries as an attractive alternative to their products, including recreational marijuana as an alternative to alcohol, and medical marijuana as an alternative to various commercial pharmaceuticals. Many industries that could view the emerging cannabis industry as an economic threat are well established, with vast economic and United States federal and state lobbying resources. It is possible that companies within these industries could use their resources to attempt to slow or reverse legislation legalizing cannabis. Any inroads these companies make in halting or impeding legislative initiatives that would be beneficial to the cannabis industry could have a detrimental impact on our clients and, in turn on our operations.

Changing legislation and evolving interpretations of law, could negatively impact our clients and, in turn, our operations.

Laws and regulations affecting the medical and adult-use marijuana industry are constantly changing, which could detrimentally affect our clients involved in that industry and, in turn, our operations. Local, state and federal cannabis laws and regulations are often broad in scope and subject to constant evolution and inconsistent interpretations, which could require our clients and ourselves to incur substantial costs associated with modification of operations to ensure compliance. In addition, violations of these laws, or allegations of such violations, could disrupt our clients’ business and result in a material adverse effect on our operations. In addition, it is possible that regulations may be enacted in the future that will limit the amount of cannabis grown or related products that our commercial clients are authorized to produce. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can it determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our operations.

The fact that we provide products and services to companies in the cannabis industry may impact our ability to raise adequate capital for future expansion, which could hinder our growth potential as well as our revenue and earnings.

A very large percentage of our customers are operating in an industry that is still illegal under U.S. federal law. With the lingering uncertainty of federal enforcement, many potential investors, especially institutional investors, either refuse to invest in the industry or are very reluctant to make such investments. Our inability to raise adequate capital for future expansion could substantially hinder our growth potential as well as our revenue and earnings.

Our success may be dependent on additional states legalizing recreational and/or medical cannabis use.

Continued development of the recreational and medical cannabis markets is dependent upon continued legislative authorization of cannabis at the state level for recreational and/or medical purposes. Any number of factors could slow or halt the progress. Furthermore, progress, while encouraging, is not assured, and the process normally encounters setbacks before achieving success. While there may be ample public support for legislative proposals, key support must be created in the relevant legislative committee, or a bill may never advance to a vote. Numerous factors impact the legislative process. Any one of these factors could slow or halt the progress and adoption of cannabis for recreational and/or medical purposes, which would limit the overall available market for our products and services, which could adversely impact our business, revenue and earnings.

Our customers may have difficulty accessing the service of banks, which may make it difficult for them to purchase our products and services.

As a result of the federal illegality of marijuana, many banks do not provide banking services to the cultivation and distribution segments of the cannabis industry, the argument being that they would be accepting for deposit funds derived from the operation of a federally illegal business. On February 14, 2014, the U.S. Department of the Treasury Financial Crimes Enforcement Network (“FinCEN”) released guidance to banks “clarifying Bank Secrecy Act (“BSA”) expectations for financial institutions seeking to provide services to marijuana-related businesses.” In addition, there have been legislative attempts to allow banks to transact business with state-authorized cannabis businesses. While these are positive developments, there can be no assurance that legislation will be successful, or that, even with the FinCEN guidance, banks will decide to do business with cannabis companies, or that, in the absence of actual legislation, state and federal banking regulators will not strictly enforce current prohibitions on banks handling funds generated from an activity that is illegal under federal law. Moreover, the FinCEN guidance may be rescinded or amended at any time in order to reconcile the now conflicting guidance of the Sessions Memo. At present, few banks have taken advantage of the FinCEN guidance, resulting in many cannabis businesses still operating on an all-cash basis. This makes it difficult for cannabis businesses to manage their businesses and pay their employees and taxes; in addition, having so much cash on hand creates significant public safety issues. Many ancillary businesses that service cannabis businesses have to deal with the unpredictability of their clients or customers not having a bank account. The inability of our customers to open bank accounts and otherwise access the services of banks, including obtaining credit, may make it more difficult and costly for them to operate and more difficult for such customers to purchase our products and services, which could materially harm our business, revenue and earnings.

We are subject to certain federal regulations relating to cash reporting.

The BSA, enforced by FinCEN, requires us to report currency transactions in excess of $10,000, including identification of the customer by name and social security number, to the Internal Revenue Service. This regulation also requires us to report certain suspicious activity, including any transaction that exceeds $5,000 that we know, suspect or have reason to believe involves funds from illegal activity or is designed to evade federal regulations or reporting requirements and to verify sources of funds. Substantial penalties can be imposed against us if we fail to comply with this regulation. If we fail to comply with these laws and regulations, the imposition of a substantial penalty could have a material adverse effect on our business, financial condition and results of operations.

State and municipal governments in which our customers do business or seek to do business may have or may adopt laws that adversely affect our ability to do business with such customers.

While the federal government has the right to regulate and criminalize cannabis, state and municipal governments may adopt or amend additional laws and regulations that further criminalize or adversely affect cannabis businesses. States that currently have laws that decriminalize or legalize certain aspects of cannabis, such as medical marijuana, could in the future, reverse course and adopt new laws that further criminalize or adversely affect cannabis businesses. Additionally, municipal governments in certain states may have laws that adversely affect cannabis businesses, even though there are no such laws at the state level. For example, municipal governments may have zoning laws that restrict where cannabis operations can be located and the manner and size of which they can expand and operate. These municipal laws, like the federal laws, may adversely affect our customers’ ability to do business. Also, given the complexity and rapid change of the federal, state and local laws pertaining to cannabis, our customers may incur substantial legal costs associated with complying with these laws and in acquiring the necessary state and local licenses required by their business endeavour’s. All the foregoing may impact our customers’ ability to purchase our products and services, which may adversely affect our business, revenue and earnings.

Most, if not all, of our customers are impacted by Section 280E of the Code, which limits certain expenses marijuana companies can deduct. This negative impact could affect the financial condition of our customers, which in turn may negatively affect the ability of our customers to purchase our products and services.

Section 280E of the Code forbids businesses from deducting otherwise ordinary business expenses from gross income associated with the “trafficking” of Schedule I or II substances, as defined by the CSA. The Internal Revenue Service (the “IRS”) has subsequently applied Section 280E to state-legal cannabis businesses since marijuana is still a Schedule I substance. Section 280E states that no deductions should be allowed on any amount “in carrying on any trade or business if such trade or business consists of trafficking in controlled substances.” Section 280E affects all businesses that engage in the cultivation, sale or processing of marijuana. This includes cultivators, medical dispensaries, marijuana retail stores and infused product manufacturers, as well as marijuana-derived concentrates and oil manufacturers. Because Section 280E limits certain deductions, it can have a dramatic effect on the profitability of these businesses, which in turn may adversely affect their ability to purchase our products and services. Such result may adversely impact our revenue and earnings.

There may be difficulty enforcing certain of our commercial agreements and contracts.

Courts will not enforce a contract deemed to involve a violation of law or public policy. Because cannabis remains illegal under U.S. federal law, parties to contracts involving the state legal cannabis industry have argued that the agreement was void as federally illegal or against public policy. Some courts have accepted this argument in certain cases, usually against the company trafficking in cannabis. While courts have enforced contracts related to activities by state-legal cannabis companies, and the trend is generally to enforce contracts with state-legal cannabis companies and their vendors, there remains doubt and uncertainty that we will be able to enforce our commercial agreements in court for this reason. We cannot be assured that we will have a remedy for breach of contract, which would have a material adverse effect on our business.

Due to our involvement in the cannabis industry, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.

Insurance that is otherwise readily available, such as general liability and directors’ and officers’ insurance, is more difficult for us to find, and more expensive, because we are product and service providers to companies in the cannabis industry. There are no guarantees that we will be able to find such insurances in the future, or that the cost will be affordable to us. If we are forced to go without such insurances, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial liabilities.

A drop in the retail price of cannabis products may negatively impact our business.

The fluctuations in economic and market conditions that impact the prices of commercially grown cannabis, such as increases in the supply of cannabis and decreases in demand for cannabis, could have a negative impact on our clients that are cannabis producers, and therefore could negatively impact our business.

Risks Related to Our Common Stock

Our common stock may be delisted if we fail to comply with Nasdaq’s continued listing standards.

On May 7, 2026, we received written notice from Nasdaq notifying us that we were not in compliance with Nasdaq Listing Rule 5620(a) for continued listing of shares of our common stock, due to our failure to hold an annual meeting within 12 months of our fiscal year end. As a result, we have submitted a plan to Nasdaq to regain compliance. If Nasdaq accepts our plan, Nasdaq can grant an exception of up to 180 calendar days from the fiscal year ended April 30, 2026, or until October 27, 2026, to allow us to regain compliance.

Our plan of compliance with respect to the foregoing requirement setting forth, among other things, a proxy statement preparation and proxy solicitation timeline leading to our annual meeting of our shareholders. We cannot provide any assurance that we will be able to present a plan of compliance that will be accepted by Nasdaq. In the event our plan is not accepted, our securities may be subject to delisting and we will have the opportunity to appeal Nasdaq’s delisting determination to a hearings panel. We expect to organize an annual meeting in the coming weeks to regain compliance with the applicable Nasdaq Listing Rules.

If our common stock ultimately were to be delisted from Nasdaq for any reason, including because we cannot regain compliance with Nasdaq’s annual shareholder meeting requirement, it could negatively impact us by (i) reducing the liquidity and market price of our common stock; (ii) reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; (iii) limiting our ability to use a registration statement to offer and sell freely tradable securities, thereby preventing us from accessing the public capital markets; and (iv) impairing our ability to provide equity incentives to its employees.

Our securities prices may be volatile and may decrease substantially.

The public trading prices of our securities fluctuate, in some cases substantially, and we expect that they will continue to do so. The price of our securities in the market on any particular day depends on many factors including, but not limited to, the following:

● our ability to maintain the listing of our securities on the Nasdaq Stock Market, and our ability to satisfy current continued listing standards; ● price and volume fluctuations in the overall stock market from time to time; ● investor demand for our shares and warrants; ● significant volatility in the market price and trading volume of companies in the cannabis industry; ● variations in our operating results and market conditions specific to our business; ● the emergence of new competitors or new technologies; ● operating and market price performance of other companies that investors deem comparable; ● changes in our Board of Directors (the “Board”) or management; ● sales or purchases of our securities by insiders, including sales of our common stock issued to employees, directors and consultants under our equity incentive plans which were registered under the Securities Act of 1933, as amended (the “Securities Act”) under our S-8 registration statement; ● commencement of, or involvement in, litigation; ● changes in governmental regulations, in particular with respect to the cannabis industry; ● actual or anticipated changes in our earnings, and fluctuations in our quarterly operating results; ● market sentiments about the cannabis industry; ● general economic conditions and trends; and ● departures of any of our key employees.

●price and volume fluctuations in the overall stock market from time to time;

●investor demand for our shares and warrants;

●variations in our operating results and market conditions specific to our business;

●the emergence of new competitors or new technologies;

●operating and market price performance of other companies that investors deem comparable;

●changes in our Board or management;

●sales or purchases of our securities by insiders, including sales of our common stock issued to employees, directors and consultants under our equity incentive plans which were registered under the Securities Act under our S-8 registration statement;

●commencement of, or involvement in, litigation;

●actual or anticipated changes in our earnings, and fluctuations in our quarterly operating results;

●general economic conditions and trends; and

●departures of any of our key employees.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Due to the potential volatility of our securities prices, we may therefore be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.

22 42

~~In addition,~~Table ~~if the market for equity stocks~~ of companies in our industry, or the stock market in general, experiences a loss of investor confidence, the market price of our securities could decline for reasons unrelated to our business, financial condition, or results of operations. If any of the foregoing occurs, it could cause the price of our securities to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to our Board of Directors and management.Contents

~~Our Board~~In addition, if the market for equity stocks of ~~Directors~~companies isin ~~authorized~~our industry, or the stock market in general, experiences a loss of investor confidence, the market price of our securities could decline for reasons unrelated to ~~reclassify~~our business, financial condition, or results of operations. If any ~~unissued~~of ~~shares~~the foregoing occurs, it could cause the price of our ~~preferred~~securities ~~stock~~to ~~into~~fall ~~one~~and ormay ~~more~~expose ~~classes~~us to lawsuits that, ~~which~~even if unsuccessful, could ~~convey special~~be ~~rights~~costly to defend and ~~privileges~~a distraction to ~~its~~our ~~owners~~Board and management.

Our ~~articles~~ ~~of incorporation permit our~~ Board ofis ~~Directors~~authorized to reclassify any ~~authorized but~~ unissued shares of our preferred stock into one or more classes~~. Our Board of Directors will generally have broad discretion over the size and timing of any such classification~~, ~~subject to~~which acould ~~finding~~convey ~~that~~special ~~the~~rights ~~classification~~ and ~~issuance~~privileges ~~of preferred stock is in our best interests. In the event our Board of Directors opts~~ to ~~classify~~its ~~a portion of our unissued shares of preferred stock into a class of preferred stock, those preferred shares would have a preference over our common stock with respect to dividends and liquidation~~owners. The class voting rights of any preferred shares we may issue could make it more difficult for us to take some actions that may, in the future, be proposed by the Board of Directors and/or the holders of our common stock, such as a merger, exchange of securities, liquidation, or alteration of the rights of a class of our securities, if these actions were perceived by the holders of preferred shares as not in their best interests. These effects, among others, could have an adverse effect on your investment in our common stock.

Our articles of incorporation permit our Board to reclassify any authorized but unissued shares of preferred stock into one or more classes. Our Board will generally have broad discretion over the size and timing of any such classification, subject to a finding that the classification and issuance of preferred stock is in our best interests. In the event our Board opts to classify a portion of our unissued shares of preferred stock into a class of preferred stock, those preferred shares would have a preference over our common stock with respect to dividends and liquidation. The class voting rights of any preferred shares we may issue could make it more difficult for us to take some actions that may, in the future, be proposed by the Board and/or the holders of our common stock, such as a merger, exchange of securities, liquidation, or alteration of the rights of a class of our securities, if these actions were perceived by the holders of preferred shares as not in their best interests. These effects, among others, could have an adverse effect on your investment in our common stock.

Registration rights and Rule 144 sales contain risks for shareholders.

From time to time, we issue our securities on an unregistered basis, which may be eligible for resale under SEC Rule 144 promulgated under the Securities Act or may require us to register with the SEC the securities for resale. In the event there are securities outstanding that can be sold under Rule 144 or under a registration statement for resale, there may be market pressure on our stock to absorb the securities in respect of the then market value of the company.

We have a substantial number of options and public warrants outstanding, which if exercised for shares of common stock, may put pressure on the market price of a share.

We have sold to public investors a substantial number of warrants to purchase common stock that may be exercised from time to time over the next several years. In addition, we have a substantial number of options and public warrants outstanding held by investment bankers who provided us with underwriting and placement services that were issued warrants and employees that were issued options. To the extent that these are exercised for shares, there may be pressure on our stock price while the market absorbs them. The potential of exercise may also have the same effect. Investors should expect that the options and warrants will be exercised when the stock price is substantially above the exercise price.

We do not anticipate paying any cash dividends on our common stock in the foreseeable future.

We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund our business. We do not intend to pay any dividends to holders of our common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our Board taking into account various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion, any legal or contractual limitations on our ability to pay dividends under our loan agreements or otherwise. As a result, if our Board does not declare and pay dividends, the capital appreciation in the price of our common stock, if any, will be your only source of gain on an investment in our common stock, and you may have to sell some or all of your common stock to generate cash flow from your investment.

The market price of our securities may be adversely affected by the sale of shares by our management or large stockholders.

Sales of our shares of common stock by our officers or senior managers through 10b5-1 plans or otherwise or by large stockholders could adversely and unpredictably affect the price of our common stock. Additionally, the price of our shares of common stock could be affected even by the potential for sales by these persons. We cannot predict the effect that any future sales of our common stock, or the potential for those sales, will have on our share price. Furthermore, due to relatively low trading volume of our stock, should one or more large stockholders seek to sell a significant portion of their stock in a short period of time, the price of our stock may decline.

23 43

~~An active,~~Table ~~liquid~~of ~~trading market for our common stock and warrants may not develop or be sustained, and as a result, investors may not be able to sell their common stock at or above their acquisition price, or at all.~~Contents

Prior to February 10, 2022, our common stock was quoted on the OTC Markets Group, Inc., OTCQB. Trading on the OTCQB marketplace was infrequent and in limited volume. Although our common stock is now listed on Nasdaq, along with our public warrants, an active trading market for these securities may never develop or be sustained. If an active trading market does not develop, investors will have difficulty selling their shares of common stock and warrants at an attractive price, or at all. An inactive market may also impair our ability to raise capital and may impair our ability to expand our business by using our common stock and common stock related securities as consideration in an acquisition. If we are unable to maintain our listing on the Nasdaq Market, it is possible that our securities will once again trade on the OTC with the limitations noted above.

Investors may be diluted by future issuances of preferred stock or additional common stock in connection with our incentive plans, acquisitions or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price.

Our articles of incorporation authorize us to issue shares of our common stock and options, rights, warrants and appreciation rights relating to our common stock for the consideration and on the terms and conditions established by our Board in its sole discretion. We could issue a significant number of shares of common stock in the future in connection with investments or acquisitions. Any of these issuances could dilute our existing stockholders, and such dilution could be significant. Moreover, such dilution could have a material adverse effect on the market price for the shares of our common stock.

The future issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of shares of our common stock, either by diluting the voting power of our common stock if the preferred stock votes together with the common stock as a single class, or by giving the holders of any such preferred stock the right or ability to block an action on which they have a separate class vote, even if the action were approved by the holders of our shares of our common stock.

The future issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock, when compared to the rights of the common stockholders, could adversely affect the market price for our common stock by making an investment in the common stock less attractive. For example, investors in the common stock may not wish to purchase common stock at a price above the conversion price of a series of convertible preferred stock because the holders of the preferred stock would effectively be entitled to purchase common stock at the lower conversion price, causing economic dilution to the holders of common stock.

~~Item 1B.~~Risks ~~Unresolved~~Related ~~Staff~~to ~~Comments~~Our Business and Operations

~~We are~~Shareholder aactivism ~~smaller~~has ~~reporting~~caused ~~company~~and aswill ~~defined~~continue byto ~~Rule~~cause ~~12b-2~~us ofto ~~the~~incur ~~Exchange~~substantial ~~Act,~~costs and ~~therefore~~divert wemanagement’s ~~are~~attention ~~not~~and ~~required~~resources toand ~~provide~~could ~~information under~~disrupt ~~this~~our ~~item~~operations and the trading price of our common stock.

~~Item 1C~~A stockholder of the Company, YZi Labs has launched a shareholder activism campaign against the Company . ~~Cybersecurity~~Among other public actions, YZi Labs has filed preliminary consent materials indicating its intent to solicit consents of our stockholders to expand the size of our 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.

~~We have~~On March 13, 2026, the Company received a ~~cybersecurity~~letter ~~program~~from YZi Labs Management Ltd. (“YZi Labs”) that requested that the Company fix a record date for determining the stockholders entitled to ~~identify~~consent to (1) repeal any provision of the Company’s Amended and Restated Bylaws (the “Bylaws”), ~~monitor~~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 ~~mitigate~~were ~~cybersecurity~~filed ~~risks~~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 ~~The~~of ~~security~~the ~~program~~Bylaws, ~~consists~~(3) amend Article II, Section .04 of ~~responsibilities for~~the ~~information~~Bylaws ~~security~~to clarify and ~~incident~~affirm ~~response~~stockholders’ ~~and~~ability isto ~~overseen~~fill byvacancies aon ~~third-party~~the ~~consultant~~Board, ~~with~~including ~~guidance~~those resulting from ~~subcontracted~~an ~~cybersecurity vendors~~increase ~~that~~in ~~our~~the ~~third-party~~size ~~consultant~~of ~~contracts.~~the WeBoard ~~consider~~by ~~cybersecurity~~the ~~risks~~vote ~~alongside~~or ~~other~~written ~~company~~consent ~~risks~~of the Company’s stockholders or by court order, and ~~consult~~(4) ~~with~~elect ~~subject matter~~YZi ~~experts~~Labs’ ~~where~~seven ~~necessary~~(7) tonominees: ~~identify~~Max ~~cybersecurity~~S. ~~risks~~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 ~~their~~its ~~nature~~validity under the Bylaws, and ~~severity~~if such letter is valid the Company will disclose the record date for determining the stockholders entitled to consent to YZi Labs’ proposals.

~~Management offers~~While ~~cybersecurity~~we ~~updates~~welcome toinput ~~the~~from ~~Audit~~all ~~Committee~~our onstockholders, atincluding ~~least~~YZi ~~an annual basis~~Labs, and ~~more~~desire ~~frequently~~to ifhave ~~circumstances~~a ~~warrant.~~constructive ~~These briefings~~relationship ~~include~~with ~~assessments~~them ofas ~~risks,~~our ~~the~~largest ~~threat~~stockholder ~~landscape~~and a key business partner, YZi Labs’ campaign has adversely affected and ~~updates~~may oncontinue ~~any~~to ~~incidents~~adversely affect our business.

24Our 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:

Our third-party consultant provides and assists with implementation on a formal IT Security Policy to provide appropriate governance over information security including control requirements for change management and patching, multifactor authentication, data backup, security monitoring, and mobile device management. Management coordinates with its third-party consultant on security controls and any issues are reported to the Audit Committee. In addition, we carry insurance that provides levels of reimbursement protection against the potential losses arising from a cybersecurity incident; however, the insurance may not cover all the costs that we might incur, and we may suffer direct economic loss.

We have not had any reportable cybersecurity breaches, including what we may perceive or recognize as cybersecurity incidents or credible threats during the fiscal year ended December 31, 2024. To date, as a result, there has not been any material adverse effect on our business operations or financial condition. If there is a cybersecurity attack and an infiltration of our files, data, customer data and the like, there would be a material adverse effect on our business, our reputation, our operations and financial condition. For example, our reputation would be damaged in the event of a cybersecurity infiltration. If there were a cybersecurity infiltration, we could lose access to our data which would disrupt our operations, and we even may not be able to operate. Such a loss of access might be temporary or permanent, and it might be localized or general. The level of disruption will depend on our backup systems. Our clients financial and other data could be taken and used against us reputationally or to damage our clients in different ways. In the latter instance, we may be liable for monetary damages to our clients. We may be held for cyber ransom, which would be loss to our financial resources. Our inability to operate, payment of damages, payment of ransom, and the costs of reparation of our systems, consultants and tangential expenses will all result in damage to our business and our financial resources.

Item 2. Properties

We own no real property. On July 28, 2021, we executed a lease, which became effective November 1, 2021, for our manufacturing and headquarters office space at 385 S. Pierce Avenue, Suite C, Louisville, Colorado 80027. The term of the lease commenced November 1, 2021, and continues through January 31, 2027. Our leased space is approximately 11,491 square feet. We believe that our lease is at market rates and that there is sufficient space available in the Louisville, Colorado area to obtain additional or other space if and when required.

Item 3. Legal Proceedings

On October 20, 2023, Sweet Cut Grow, LLC and Green Ice, LLC (collectively, “Claimant”) a client of the Company with which it had an equipment contract and engineering contract, filed a demand for arbitration asserting claims for breach of contract, breach of warranty, and unjust enrichment, and demand for $1,049,280 in damages, plus interest (“Claims”). The Company continues to deny all the Claims and has asserted a counterclaim. The Company believes Claimant is owed nothing as the Company fulfilled all its obligations under the contracts to Claimant, and further, that the negligence of a third-party supplier is the basis of the Claims. We intend to generally defend the claims on the basis that we promptly addressed all problems, and that any issues with defective HVAC equipment are the responsibility of our third-party equipment manufacturer. The Company’s equipment contract with Claimant requires the parties to arbitrate their disputes under the rules of the American Arbitration Association (“AAA”). The arbitration will be heard in Denver, Colorado. The matter is in the discovery phase. The parties will pay their own legal fees and expenses. The Company intends to defend itself vigorously, believing there are no merits to the claims as currently presented.

On or about April 17, 2024, Optima Consulting Services, LLC (the “Claimant”), a client of the Company with which it had an equipment contract and engineering contract, advised 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 the Company it was asserting claims for negligent/defective design and breach of warranty, and alleges its damages exceed $2,000,000 (Claims”). The Company denies all the Claims and that Claimant is entitled to any damages. The Company believes Claimant is owed nothing as the Company fulfilled all its obligations under the contracts to Claimant and performed all work in line with all applicable standards. We intend to generally defend the Claims on the basis that all work was performed pursuant to the contract and any alleged issues that may have occurred were the result of actions by Claimant and/or third parties. If Claimant moves forward with its Claims, the Company’s equipment contract with Claimant requires the parties to arbitrate their dispute with the American Arbitration Association (“AAA”). The arbitration will be heard in Denver, Colorado. The matter is in the preliminary phase. The parties will pay their own legal fees and expenses. The Company intends to defend itself vigorously, believing there are no merits to the Claims as currently presented.

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

From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our customers. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Public Securities: Common Stock and Warrants

Our shares of common stock currently are quoted on Nasdaq under the symbol “CEAD”. In addition, we have a class of publicly traded warrants to purchase shares of common stock that are quoted on Nasdaq under the symbol “CEADW.”

As of March 7, 2025, we had approximately 40 shareholders of record and we believe we have approximately 12,247 shareholders who hold their shares in street name based on the solicitation of proxies for our 2024 annual meeting.

Equity Compensation Plans

2017 Equity Incentive Plan

On August 1, 2017, our Board of Directors adopted and approved the 2017 Equity Incentive Plan (the “2017 Equity Plan”) in order to attract, motivate, retain, and reward high-quality executives and other employees, officers, directors, consultants, and other persons who provide services to us by enabling such persons to acquire an equity interest in us. Under the 2017 Equity Plan, our Board of Directors may award 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 27,778 shares of our common stock (“Plan Shares”) for issuance of equity awards under the 2017 Equity Plan. If any shares subject to an award are forfeited, expire, or otherwise terminate without issuance of such shares, the shares will, to the extent of such forfeiture, expiration, or termination, again be available for awards under the 2017 Equity Plan. As of December 31, 2024, we have granted, under the 2017 Equity Plan, awards in the form of RSAs for services rendered by independent directors and consultants, non-qualified stock options, RSUs, and stock bonus awards.

The information for our 2017 Equity Plan as of December 31, 2024 is summarized as follows:

	Number of shares to be issued upon exercise of outstanding options		Weighted-average exercise price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)
Equity compensation plans approved by shareholders		-		-		-
Equity compensation plans not approved by shareholders (1)		11,615	$	140.70		2,522
Total		11,615	$	140.70		2,522

(1) Of the 27,778 Plan Shares allocated for issuance under the 2017 Equity Plan, as of December 31, 2024, 13,641 shares have been issued, non-qualified stock options over 11,615 shares were issued and outstanding, and securities in respect of the remaining 2,522 shares were available for future issuance.

2021 Equity Incentive Plan

On March 22, 2021, the Board approved the 2021 Equity Incentive Plan (the “2021 Equity Plan”), which was approved by the stockholders on July 22, 2021. The 2021 Equity Plan permits the Board to grant awards of up to 55,556 shares of common stock. The 2021 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. As of December 31, 2024, we have granted under the 2021 Equity Plan, incentive stock options, non-qualified stock options, and a stock bonus award.

	Number of shares to be issued upon exercise of outstanding options		Weighted-average exercise price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)
Equity compensation plans approved by shareholders (1)		16,035	$	33.81		15,581
Equity compensation plans not approved by shareholders		-		-		-
Total		16,035	$	33.81		15,581

(1) Of the 55,556 Plan Shares allocated for issuance under the 2021 Equity Plan, as of December 31, 2024, 23,940 shares have been issued, non-qualified stock options over 11,104 shares were issued and outstanding, incentive stock options over 3,401 shares were issued and outstanding, restricted stock units over 1,529 shares were issued and outstanding, and securities in respect of the remaining 15,581 shares were available for future issuance.

Refer to Note 12 – Equity Incentive Plan of our consolidated financial statements, which are included as part of this Annual Report for further details on our 2017 Equity Plan and 2021 Equity Plan.

Item 6. Selected Financial Data

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

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information included elsewhere in this Annual Report, which include additional information about our accounting policies, practices, and the transactions underlying our financial results. In addition to historical information, this Annual Report contains 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 this Annual Report.

Please also refer to “Non-GAAP Financial Measures” discussed elsewhere in this Annual Report.

The following discussion should be read in conjunction with Item 1 – Business in this Annual Report, and our consolidated financial statements and accompanying notes to consolidated financial statements included in this Annual Report. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is segregated into four sections, including:

Executive Overview. This section provides a summary of our operating performance and cash flows, industry trends and our strategic initiatives.

Critical Accounting Policies and Estimates. This section describes the accounting areas where management makes critical estimates to report our financial condition and results of operations.

Results of Operations. This section provides an analysis of our consolidated results of operations for the two comparative periods presented in our consolidated financial statements.

Liquidity, Capital Resources and Financial Position. This section provides an analysis of cash flow, contractual obligations, and certain other matters affecting our financial position.

Executive Overview

CEA Industries Inc. currently is focused on selling environmental control and other technologies and services to the Controlled Environment Agriculture (“CEA”) industry. Our service and product offerings include: (i) floor plans and architectural design of cultivation facilities, (ii) licensed mechanical, electrical, and plumbing (MEP) engineering of commercial scale environmental control systems specific to cultivation facilities, (iii) process cooling systems and other climate control systems, (iv) air handling equipment and systems, (v) LED lighting, (vi) benching and racking solutions for indoor cultivation, (vii) automation and control devices, systems and technologies used for environmental, lighting and climate control, and (viii) preventative maintenance services for CEA facilities. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada as well as in other international locations. Customers are those growers building new facilities and those expanding or retrofitting existing facilities, with both ranging in size from several thousand to more than 100,000 square feet.

Historically, our revenue stream is derived primarily from supplying our products, services and technologies to commercial indoor facilities that grow cannabis, but we have served facilities growing other crops and we intend to pursue such facilities as customers more in the future.

Historically, nearly all of our customers have been in the cannabis cultivation business. We believe our customers engage us for their environmental and climate control systems because they value our reputation as experts in the industry. We leverage our reputation and know-how against the many local contractors and MEP engineers who collectively constitute our largest competitors.

The following table summarizes results for the years ended December 31, 2024 and December 31, 2023.

	2024			2023			$ Change			% Change
Revenue	$	2,803,000		$	6,911,000		$	(4,108,000	)		(59	)%
Net loss	$	(3,146,000	)	$	(2,912,000	)	$	(234,000	)		(-8	)%
Adjusted net loss	$	(3,046,000	)	$	(2,698,000	)	$	(348,000	)		(-13	)%

Our adjusted net income (loss) is our GAAP net income (loss) after addback for our non-cash equity compensation expenses, debt-related items, and depreciation expense. Historically, one of the most significant financial challenges we face is the inconsistent and unpredictable revenue we generate quarter-over-quarter, and our revenue and cash flow remain difficult to predict.

Impact of the COVID-19 Pandemic on Our Business

The impact of the government and the business economic response to the COVID-19 pandemic affected demand across the majority of our markets and disrupted workflow and completion schedules on projects. We believe we continue to have adverse effects on our sales, project implementation, supply chain infrastructure, operating margins, costs, and working capital, as a result of the pandemic. We continue to monitor costs and continue to take actions to reduce costs in order to mitigate the long-term impact of the COVID-19 pandemic to the best of our ability. However, these actions may not be sufficient in the long run to avoid reduced sales, increased losses, and reduced operating cash flows in our business. During the year ended December 31, 2024, , the Company experienced delays in the receipt of equipment it had ordered to meet its customer orders due to disruption and delays in its supply chain. Consequently, our revenue recognition of some customer sales has been delayed until future periods when the shipment of orders can be completed.

Impact of Ukrainian and Israeli Conflicts

We believe that the conflicts involving Ukraine and Israel do not have any direct impact on our operations, financial condition, or financial reporting. We believe the conflicts will have only a general impact on our operations in the same manner as it is having a general impact on all businesses that have their operations limited to North America resulting from international sanction and embargo regulations, possible shortages of goods and goods incorporating parts that may be supplied from countries involved in the conflicts, supply chain challenges, and the international and US domestic inflation resulting from the conflict and government spending in relation to the conflicts. As our operations are related only to the North American controlled agricultural industry, largely within the cannabis space, we do not believe we will be specifically targeted for cyber-attacks related to the conflicts. We have no operations in the countries directly involved in the conflict or are specifically impacted by any of the sanctions and embargoes specifically related to those conflicts, as we principally operate in the United States and Canada. We do not believe that the conflicts will have any impact on our internal control over financial reporting. Other than general securities market trends, we do not have reason to believe that investors will evaluate the company as having special risks or exposures related to the conflicts.

Revenue. Our 2024 revenue was approximately $2,803,000. Our 2024 revenue represents a decrease of 59% compared to 2023 See Results of Operations on page 33 below.

Gross Margin. Our 2024 gross loss margin was 7.8%, a decrease from a gross profit margin of 7.8% in 2023. This decrease was primarily due to lower revenue and an increase in our fixed cost base as a percent of revenue. See Results of Operations on page 33 below.

Profitability. Our 2024 adjusted net loss was approximately $3,046,000, compared to a 2023 adjusted net loss of approximately $2,698,000, an increase of $348,000, or 13%. See Results of Operations on page 33 below. Our adjusted net income (loss) is a key management metric for us because it provides a proxy for the cash we generate from (use in) operations.

Capital Resources. We continue to experience softening demand in the markets we serve, and an inability to replace our backlog of projects. As a result, we have taken steps during 2023, 2024, and early 2025 to reduce our operating costs and general and administrative expenses to better reflect the activity levels we are observing in the industry. The reductions have been offset by higher costs for professional fees related to a potential acquisition.

Nonetheless, there remain risks and uncertainties regarding our ability to grow revenue and generate sufficient revenues and cash flows. And there can be no assurances that we will be able to raise future capital on commercially reasonable terms, or at all.

Contract Bookings. Our bookings increased in 2024, and our backlog at December 31, 2024, was $490,000, an increase of $55,000, or 13%, from our December 31, 2023 backlog. The increase in bookings was primarily due to one large equipment contract of approximately $1,300,000 booked in the second quarter of 2024. During 2024, we had net bookings of $2,769,000, consisting of: (i) $2,874,000 of new sales contracts executed in 2023, (ii) $92,000 in net negative change orders, and (iii) $14,000 in project cancellations.

The following table sets forth: (i) our beginning backlog (the remaining contract value of outstanding sales contracts for which we have received an initial deposit as of the previous period), (ii) our net bookings for the period (new sales contracts executed during the period for which we received an initial deposit, net of any adjustments including cancellations and change orders during the period), (iii) our recognized revenue for the period, and (iv) our ending backlog for the period (the sum of the beginning backlog and net bookings, less recognized revenue). Based on the current economic climate and our cost cutting measures, there is no assurance that we will be able to continue to obtain the level of bookings that we have had in the past and or fulfil our current backlog, and we may experience contract cancellations, project scope reductions and project delays.

Our recognized revenue for the quarters ended December 31, 2023, March 31, 2024, June 30, 2024, September 30, 2024, and December 31, 2024 in the table below, excludes $0, $31,000, $12,000, $0, and $46, respectively, in revenue arising from the forfeiture of non-refundable deposits from former customers on previously cancelled contracts. The contracts were removed from the backlog at the time of cancellation.

	For the quarter ended
	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024
Backlog, beginning balance	$	548,000		$	435,000		$	535,000		$	227,000		$	352,000
Net bookings, current period		138,000			303,000			1,440,000			516,000			510,000
Recognized revenue, current period		(251,000	)		(203,000	)		(1,748,000	)		(391,000	)		(372,000	)
Backlog, ending balance	$	435,000		$	535,000		$	227,000		$	352,000		$	490,000

The completion of a customer’s new build facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for these customers to complete a new build project, which corresponds to when we are able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation systems; (vii) the availability of power; and (viii) delays that are typical in completing any construction project.

We have provided an estimate in our consolidated financial statements of when we expect to recognize revenue on our remaining performance obligations (i.e., our Q4 2024 backlog). However, there continues to be significant uncertainty regarding the timing of our recognition of revenue in our Q4 2024 backlog. Refer to the Revenue Recognition section of Note 2 in our consolidated financial statements, included as part of this Annual Report for additional information on our estimate of future revenue recognition on our remaining performance obligations.

Our backlog, remaining performance obligations and net bookings may not be indicative of future operating results, and our customers may attempt to renegotiate or terminate their contracts for a number of reasons, including delays in, or inability to, obtain project financing or licensing or abandonment of the project entirely. Accordingly, there can be no assurance that contracts included in backlog or remaining performance obligations will actually generate revenues or when the actual revenues will be generated. Net bookings and backlog are considered non-GAAP financial measures, and therefore, they should be considered in addition to, rather than as a substitute for, our GAAP measures for recognized revenue, deferred revenue and remaining performance obligations. Further, we can provide no assurance as to the profitability of our contracts reflected in remaining performance obligations, backlog and net bookings.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based upon our 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 its 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. For information regarding our critical accounting policies as well as recent accounting pronouncements, see Note 2 of our consolidated financial statements.

Our management has discussed the development and selection of critical accounting estimates with the Board of Directors, and the Board of Directors has reviewed our disclosure relating to critical accounting estimates in this Annual Report. We believe the following are the more significant judgments and estimates used in the preparation of our consolidated financial statements.

Accounts receivable and allowance for accounts receivable. Accounts receivables are recorded at the invoiced amount or based on revenue earned for items not yet invoiced, and generally do not bear interest. In accordance with ASU No. 2016-13 (as amended), Measurement of Credit Losses on Financial Instruments, which the Company adopted on a prospective basis effective January 1, 2023, an allowance for doubtful accounts is recorded against the Company’s receivables by applying an expected credit loss model. Each period, management assesses the appropriateness of the level of allowance for credit losses by considering credit risk inherent within its receivables as of the end of the period. The Company considers a receivable past due when a debtor has not paid us by the contractually specified payment due date. Account balances are written off against the allowance for credit losses if collection efforts are unsuccessful and the receivable balance is deemed uncollectible (debtor default), based on factors such as the debtor’s credit rating as well as the length of time the amounts are past due. As of December 31, 2024, and December 31, 2023, the allowance for doubtful accounts was $85,000 and $125,000, respectively. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventory. Inventory is stated at the lower of cost or net realizable value. The inventory is valued based on a first-in, first-out (“FIFO”) basis. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory. Excess and obsolete inventory is charged to cost of revenue and a new lower-cost basis for that inventory is established; subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. As of December 31, 2024, and December 31, 2023, the allowance for excess and obsolete inventory was $220,000 and $193,000, respectively.

Product warranty. We warrant the products that we manufacture for a warranty period equal to the lesser of 12 months from start-up or 18 months from shipment. Our warranty provides for the repair, rework, or replacement of products (at our option) that fail to perform within stated specification. Our third-party suppliers also warrant their products under similar terms, which are passed through to our customers. We assess the historical warranty claims on our manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. We continue to assess the need to record a warranty reserve at the time of sale based on historical claims and other factors. As of December 31, 2024, and December 31, 2023, we had an accrued warranty reserve amount of $53,000 and $191,000, respectively, which are included in accounts payable and accrued liabilities on our consolidated balance sheets.

Share-based compensation. We recognize the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that we grant under our equity incentive plan in our consolidated financial statements based on their grant date fair value. The expense is recognized over the requisite service period or performance period of the award. The service inception date is typically the grant date, but the service inception date may be prior to the grant date. Awards with a graded vesting period based on service are expensed on a straight-line basis for the entire award. Awards with performance-based vesting conditions which require the achievement of a specific company financial performance goal at the end of the performance period and required service period are recognized over the performance period. Each reporting period, we reassess the probability of achieving the respective performance goal. If the goals are not expected to be met, no compensation cost is recognized, and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met or is expected to be lower than initially expected. The grant date fair value of stock options is based on the Black-Scholes Model. The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option.

Revenue Recognition. We account for revenue in accordance with ASC 606. Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of our contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. We do not provide construction services or system installation services. Some of our contracts with customers contain a single performance obligation, typically engineering only services contracts.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, we allocate the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, we use various observable inputs. The best observable input is our actual selling price for the same good or service, however, this input is generally not available for our contracts containing multiple performance obligations. For engineering services, we estimate the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and components and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, we may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, we apply the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each promise is fulfilled.

Generally, satisfaction occurs when control of the promised goods is transferred to the customer or as we recognize revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. We have elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by us from the customer. Accordingly, we recognize revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to our customers.

We also have performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones.

We offer assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. We maintain a warranty reserve based on historical warranty costs.

Remaining performance obligations. The revenue standard requires certain quantitative and qualitative disclosures about our remaining performance obligations, which are defined as performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period, including (i) the aggregate amount of the transaction price allocated to the remaining performance obligations, and (ii) when we expect to recognize as revenue with respect to such amounts on either: (x) a quantitative basis using appropriate time bands for the duration of the remaining performance obligations, or (y) by using qualitative information. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of our control, make it difficult for us to predict when we will recognize revenue on our remaining performance obligations. There are risks that we may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when we are able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the significant price and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Further, based on the current economic climate, and the Company’s recent cost cutting measures, there is no assurance that the Company will be able to fulfil its backlog, and the Company may experience contract cancellations, project scope reductions and project delays.

There is significant uncertainty regarding the timing of our recognition on all remaining performance obligations as of December 31, 2024. Customer contracts for which we have only received an initial advance payment to cover the allocated value of our engineering services (“engineering only paid contracts”) carry enhanced risks that the equipment portion of these contracts will not be completed or will be delayed, which could occur if the customer is dissatisfied with the quality or timeliness of our engineering services or there is a delay or abandonment of the project due to the customer’s inability to obtain project financing or licensing. In contrast, after the customer has made an advance payment for a portion of the equipment to be delivered under the contract (“partial equipment paid contracts”), we are typically better able to estimate the timing of revenue recognition since the risks and delays associated with licensing, permitting and project funding are typically mitigated once the initial equipment payment is received.

Commitments and contingencies. In the normal course of business, we are subject to loss contingencies, such as legal proceedings and claims arising out of our business, that cover a wide range of matters, including, among others, customer disputes, government investigations and tax matters. An accrual for a loss contingency is recognized when it is probable that an asset has been impaired, or a liability has been incurred and the amount of loss can be reasonably estimated.

Results of Operations

Comparison of Years ended December 31, 2024 and 2023

Revenues and Cost of Goods Sold

Revenue for the year ended December 31, 2024 was $2,803,000 compared to $6,911,000 for the year ended December 31, 2023, a decrease of $4,108,000, or 59%. This revenue decrease was primarily the result of our significant decrease in net bookings since 2022, which dropped from $6,042,000 in 2022 to $1,535,000 in 2023, or 75%. Net bookings were higher in 2024, increasing to $2,769,000, or an increase of 80% over 2023. We believe the lower bookings are due to the reduction in capital expenditures in the cannabis market environment as a result of the prolonged effects of pricing and inflationary pressure, in addition to a reduced sales effort by the Company.

Cost of revenue decreased by $3,346,000, or 53%, from $6,369,000 for the year ended December 31, 2023 to $3,023,000 for the year ended December 31, 2024. The factors impacting this change are discussed below.

The gross loss for the year ended December 31, 2024 was $220,000 compared to a gross profit of $542,000 for the year ended December 31, 2023. Gross profit margin decreased by 15.7 percentage points from a 7.8% gross profit for the year ended December 31, 2023 to a 7.8% gross loss for the year ended December 31, 2024. This decrease was primarily due to a decrease in revenue, an increase in our fixed cost base as a percent of revenue, offset by slightly lower variable costs as a percent of revenue.

Our revenue cost structure is comprised of both fixed and variable components. The fixed cost component represents engineering, manufacturing and project management salaries and benefits and manufacturing overhead that totaled $892,000, or 32% of total revenue, for the year ended December 31, 2024, as compared to $1,279,000, or 18% of total revenue, for the year ended December 31, 2023. The decrease of $388,000 was primarily due to a decrease in salaries and benefits (including stock-based compensation) of $327,000, and a decrease of $61,000 in fixed overhead. The variable cost component, which represents our cost of equipment, outside engineering costs, shipping and handling, travel and warranty costs, totaled $2,132,000, or 76% of total revenue, in the year ended December 31, 2024, as compared to $5,090,000, or 74% of total revenue, in the year ended December 31, 2023. In the year ended December 31, 2024, as compared to the prior year, our cost of equipment decreased by $2,537,000 primarily due to the decrease in revenue, offset by a decrease in our equipment margin. Additionally in the year ended December 31, 2024 as compared to the year ended December 31, 2023: (i) our warranty expense decreased by $190,000, (ii) excess and obsolete inventory expenses decreased by $95,000, (iii) travel was down by $81,000, (iv) our outside engineering costs were down $29,000, and (v) shipping and handling and other overhead expenses decreased by $26,000.

Operating Expenses

Operating expenses decreased by 16% from $3,495,000 for the year ended December 31, 2023 to $2,952,000 for the year ended December 31, 2024, a decrease of $543,000. The operating expense decrease consisted of: (i) a decrease in advertising and marketing expenses of $257,000, (ii) a decrease in selling, general and administrative expenses (“SG&A expenses”) of $209,000, and (iii) a decrease in product development expenses of $76,000.

The decrease in advertising and marketing expenses was due primarily to: (i) a decrease in salaries and benefits (including equity-based compensation) of $133,000, (ii) a decrease of $114,000 for advertising and promotion, web development and other marketing expenses, (iii) a decrease of $9,000 for outside marketing services, and (iv) a decrease of $1,000 in expenses related to trade shows and events.

The decrease in SG&A expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023, was due primarily to: (i) a decrease of $449,000 in salaries, benefits (including equity-based compensation) and other employee related costs, (ii) a decrease of $53,000 for facility and office expenses, (iii) a decrease in bad debt expense of $38,000, and (iv) a decrease in commissions of $16,000, offset by (v) an increase in accounting and professional fees of $299,000, (vi) higher business taxes and licenses of $33,000 primarily due to an increase in real estate taxes, and (vii) an increase in loss on asset disposals of $13,000.

The decrease in product development costs was primarily due to (i) a decrease in salaries and benefits (including equity-based compensation) of $70,000, (ii) a decrease in material costs of $4,000 and, (iii) a decrease in travel of $2,000.

Operating Loss

We had an operating loss of $3,172,000 for the year ended December 31, 2024, as compared to an operating loss of $2,953,000 for the year ended December 31, 2023, an increase of $219,000, or 7%. The operating loss included $82,000 of non-cash, stock-based compensation expenses and $17,000 for depreciation and amortization in the year ended December 31, 2024, as compared to $188,000 for stock-based compensation, and $26,000 of depreciation and amortization for the year ended December 31, 2023. Excluding these non-cash items, our adjusted operating loss increased by $333,000.

Other Income

Our other income (net) decreased by $15,000 from $42,000 for the year ended December 31, 2023, to $26,000 for the year ended December 31, 2024. The other income for 2024 consisted of interest on our money market account. The other income for 2023 consisted of (i) $34,000 of interest on the money market account, and (ii) $8,000 for an adjustment to our ERC credit and unclaimed property.

Net Loss

Overall, we had a net loss of $3,146,000 for the year ended December 31, 2024, as compared to a net loss of $2,912,000 for the year ended December 31, 2023, an increase of $234,000. The net loss included $82,000 of non-cash, stock-based compensation costs and depreciation and amortization expense of $17,000 in the year ended December 31, 2024, as compared to $188,000 of non-cash, stock-based compensation costs and depreciation and amortization expense of $26,000 in the year ended December 31, 2023. Excluding these non-cash items, our adjusted net loss increased by $348,000.

Liquidity, Capital Resources and Financial Position

Cash and Cash Equivalents

As of December 31, 2024, we had cash and cash equivalents of $9,453,000, compared to cash and cash equivalents of $12,508,000 as of December 31, 2023. The decrease in cash and cash equivalents during the year ended December 31, 2024 was the result of cash used in operations of $3,055,000. Our cash is held in bank depository accounts in certain financial institutions. During the year ended December 31, 2024, we held deposits in financial institutions that exceeded the federally insured amount.

As of December 31, 2024, we had accounts receivable (net of allowance for doubtful accounts) of $13,000, contract assets (net of allowance for doubtful accounts) of $234,000, inventory (net of excess and obsolete allowance) of $26,000, and prepaid expenses and other of $368,000 (including $83,500 in advance payments on inventory purchases). While we typically require advance payment before we commence engineering services or ship equipment to our customers, we have made exceptions requiring us to record accounts receivable, which carry a risk of non-collectability, especially since most of our customers are funded on an as-needed basis to complete facility construction.

As of December 31, 2024, we had no indebtedness, total accounts payable and accrued liabilities of $550,000, deferred revenue of $344,000, and the current portion of operating lease liability of $136,000. As of December 31, 2024, we had working capital of $9,064,000, compared to a working capital of $12,110,000 as of December 31, 2023.

We have never declared or paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future.

Because of the challenges to the CEA industry economy and the specific challenges of our business, we cannot predict the continuing level of working capital that we will have in the future. As mentioned elsewhere, we have taken steps to conserve our cash resources by reducing staff and taking other cost cutting measures and we will continue to evaluate further such measures in the future.

Summary of Cash Flows

The following summarizes our cash flows for the years ended December 31, 2024 and December 31, 2023:

	For the Year Ended December 31,
	2024			2023
Net cash used in operating activities	$	(3,055,000	)	$	(6,129,000	)
Net cash provided by (used in) investing activities		-			-
Net cash provided by (used in) financing activities		-			-
Net decrease in cash	$	(3,055,000	)	$	(6,129,000	)

Operating Activities

We incurred a net loss for the year ended December 31, 2024 of $3,146,000 compared to a net loss for the year ended December 31, 2023 of $2,912,000. We had an accumulated deficit of $40,336,000 as of December 31, 2024.

Cash used in operations for the year ended December 31, 2024 was $3,055,000 compared to cash used in operations of $6,129,000 for the year ended December 31, 2023, a decrease of $3,074,000. The decrease was primarily attributable to: (i) a decrease in cash used for working capital of $3,539,000, (ii) a decrease in net loss of $234,000 and, (iii) a decrease in non-cash operating charges of $231,000. Significant non-cash items during 2024 included: (i) $111,000 for the amortization on an ROU asset, and (ii) stock related compensation of $82,000. Significant non-cash items during 2023 included: (i) stock-related compensation of $188,000, (ii) excess and obsolete inventory charges of $122,000, and (iii) $107,000 for the amortization on an ROU asset.

Investing Activities

There was no cash provided by investing activities for the year ended December 31, 2024. Cash provided by investing activities was less than $1,000 for the year ended December 31, 2023.

Financing Activities

There were no cash flows from financing activities during the year ended December 31, 2024 or the year ended December 31, 2023.

Capital Raising

Since inception, we have incurred significant operating losses and have funded our operations primarily through issuances of equity securities, debt, and operating revenue. As of December 31, 2024, we had an accumulated deficit of $40,336,000, working capital of $9,064,000, and stockholders’ equity of $9,198,000.

Inflation

Our operations are being influenced by the inflation existent in the larger economy and in the industries related to building renovations, retrofitting and new build CEA facilities in which we operate. We believe that we will continue to face inflationary increases in the cost of products and our operations, which will adversely affect our margins and financial results and the pricing of our service and product supply contracts. Inflation is reflected in higher wages, increased pricing of equipment, delivery and transportation costs, and general operational expenses. As we move forward, we plan to continuously monitor our various contract terms and may decide to add clauses that will permit us to adjust pricing if inflation and price increase pressures on us will impact our ability to perform our contracts and maintain our margins.

Contractual Payment Obligations

Refer to Note 3 – Leases of our consolidated financial statements, which are included as part of this Annual Report for further details on our obligations under a lease for our manufacturing and office space.

Commitments and Contingencies

Litigation

On October 20, 2023, Sweet Cut Grow, LLC and Green Ice, LLC (collectively, “Claimant”) a client of the Company with which it had an equipment contract and engineering contract, filed a demand for arbitration asserting claims for breach of contract, breach of warranty, and unjust enrichment, and a demand for $1,049,280 in damages, plus interest (“Claims”). The Company continues to deny all the Claims and has asserted a counterclaim. The Company believes Claimant is owed nothing as the Company fulfilled all its obligations under the contracts to Claimant, and further, that the negligence of a third-party supplier is the basis of the Claims. We intend to generally defend the claims on the basis that we promptly addressed all problems, and that any issues with defective HVAC equipment are the responsibility of the third-party equipment manufacturer. The Company’s equipment contract with Claimant requires the parties to arbitrate their disputes under the rules of the American Arbitration Association (“AAA”). The arbitration will be heard in Denver, Colorado. The matter is in the discovery phase. The parties will pay their own legal fees and expenses. The Company intends to defend itself vigorously, believing there are no merits to the Claims as currently presented.

Given the current uncertainty around our ability to estimate the amount of loss and success of the Claims, we have not recorded an accrual for any potential loss related to these matters.

From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a liability for contingent losses when it is both probable that a liability has been incurred and the amount of the loss is known. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations.

Other Commitments

In the ordinary course of business, we may 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 our breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and certain of our officers and employees that will require us to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and certain of our officers and employees, and former officers, directors, and employees of acquired companies, in certain circumstances.

Off-Balance Sheet Arrangements

We are required to disclose any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors. As of December 31, 2024, we had no off-balance sheet arrangements. During the years ended December 31, 2024 and December 31, 2023, we did not engage in any off-balance sheet financing activities.

Recent Developments

Refer to Note 14 - Subsequent Events of our consolidated financial statements, included as part of this Annual Report, for the significant events occurring since December 31, 2024.

Item 7A. 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 8. Financial Statements and Supplementary Data

Our consolidated financial statements are included herein, beginning on page F-1. The information required by this item is incorporated herein by reference to the consolidated financial statements set forth in Item 15. “Exhibits and Financial Statement Schedules” of this Annual Report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management conducted an evaluation, with the participation of our Chief Executive Officer and our Principal Financial and Accounting Officer, who are the one in the same person, of 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 Annual Report on Form 10-K. Based upon that evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer concluded that as a result of the material weakness in our internal control over financial reporting described below, our disclosure controls and procedures were not effective as of December 31, 2024.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for the preparation of our financial statements and related information. Management uses its best judgment to ensure that the financial statements present fairly, in material respects, our financial position and results of operations in conformity with generally accepted accounting principles.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in the Exchange Act. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal controls including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.

Our internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that, in reasonable detail, accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and that the receipts and expenditures of company assets are made in accordance with our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention of or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.

Under the supervision of our Chief Executive Officer and our Principal Financial and Accounting Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) published in 2013 and subsequent guidance prepared by COSO specifically for smaller public companies. Based on that evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024, for the reasons discussed below.

A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

Management identified the following material weakness in its assessment of the effectiveness of internal control over financial reporting as of December 31, 2024:

We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies. We are committed to taking steps to improve our financial organization including, without limitation, evaluating our accounting staff requirements 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 always been possible and may not be economically feasible now or in the future.

Our management, including our Chief Executive Officer and our Principal Financial and Accounting Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

The material weaknesses in internal control over financial reporting as of December 31, 2024, remained unchanged from December 31, 2023. Management believes that the material weaknesses set forth above did not have an effect on our financial reporting for the year ended December 31, 2024.

We will continue to monitor and evaluate the effectiveness of our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. We do not, however, expect that the material weaknesses in our disclosure controls will be remediated until such time as we have improved our internal control over financial reporting.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes identified in connection with our internal control over financial reporting during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information about our Directors

The Company’s current directors are set forth below:

Name	Age	Positions & Committees
Anthony K. McDonald	66	Chairman of the Board; Chief Executive Officer and President
James R. Shipley	70	Director; Compensation Committee Chair; Audit Committee Member
Nicholas J. Etten	57	Director; Audit Committee Chair, Compensation Committee Member; Nominations Committee Member
Marion Mariathasan	49	Director; Nominations Committee Chair, Compensation Committee Member
Matthew Tarallo	40	Director; Compensation Committee Member, Nominations Committee Member

Certain information with respect to the Company’s current directors is set forth below. The business address of each of the directors is 385 South Pierce Avenue, Suite C, Louisville, Colorado 80027.

Name and Year First Elected Director		Background Information and Principal Occupation(s) During Past Five Years and Beyond
Anthony K. McDonald (2018)		Mr. McDonald was appointed a director on September 12, 2018. On November 28, 2018, Mr. McDonald was appointed our Chief Executive Officer and President. On June 24, 2020, Mr. McDonald was appointed Chairman of the Board. Mr. McDonald has been involved in building businesses in the cleantech, energy efficiency and heating, ventilation and air conditioning (“HVACD”) industries over the past 10 years. From 2008 to 2018, Mr. McDonald led sales and business development as Vice-President—Sales for Coolerado Corp., a manufacturer and marketer of innovative, energy-efficient air conditioning systems for commercial, government, and military use. Along with Coolerado’s CEO, Mr. McDonald was instrumental in growing the business to become an INC. 600 high-growth company award winner and assisted in raising $15 million of private funding from a cleantech investment fund. In 2015, Coolerado was acquired by Seeley International, Australia’s largest air conditioning manufacturer and an innovative global leader in the design and production of energy-efficient cooling and heating products, where Mr. McDonald served as National Account Manager. He is also the founder and Managing Partner of Cleantechsell.com and the author of Cleantech Sell: The Essential Guide To Selling Resource Efficient Products In The B2B Market. Prior to joining Coolerado, Mr. McDonald spent over ten years in the private equity industry where he was involved in numerous transactions in the technology, manufacturing, and power development industries. As a business development officer at several private equity acquisitions groups Mr. McDonald identified, financed, or acquired numerous transactions with total enterprise value in excess of $200 million. Mr. McDonald was also a consultant to international banks with KMPG from 1994 to 1997 and served as a director for Keating Capital, Inc., a publicly traded business development company that made investments in pre-IPO companies. He previously served as a mentor for companies in the Clean Tech Open competition. Mr. McDonald is a U.S. Army veteran and a graduate of the U.S. Military Academy at West Point, N.Y. where he earned a B.S. degree in Engineering and Economics. He also received an M.B.A. degree from the Harvard Business School. Among the reasons for Mr. McDonald to be selected for service on the Board is his experience in sales, sales and operations management, mergers and acquisitions, the HVACD industry, his in-depth knowledge of climate control systems and technologies.

James R. Shipley (2020) Mr. Shipley was appointed a director on June 24, 2020. Mr. Shipley recently retired from AgTech Holdings where he was the Chief Strategy Officer of GroAdvisor and the Vice-President of Sales at VividGro since 2017. Since 2017, Mr. Shipley has assisted in design and build consulting along with supply chain management for cultivation operations in 12 states covering more than 500,000 square feet of warehouse indoor cultivation and continues to consult independently with operators in North America. From 2014 to 2017 Mr. Shipley, acting in several executive roles, helped build multiple business lines for MJIC Inc. (now CNSX: MSVN); these roles included being a member of the board of directors, Chairman and President. Mr. Shipley is currently president and a principal in RSX Enterprises Inc., a sales agency and marketing firm that sells and markets equipment for use in controlled environment agriculture on behalf of various manufacturers. Mr. Shipley has been active in the cannabis business, where he has founded various summits such as the Marijuana Investor Summit and been involved in many educational workshops and business expos. Previously, Mr. Shipley was an officer and chief revenue officer with Carrier Access Corporation (CACS), a public company trading on Nasdaq. Prior to Carrier Access, Mr. Shipley worked at Williams Companies in their telecommunications divisions. Mr. Shipley was selected for service on the Board because of his experience in and commitment to the cannabis industry, his demonstrated and consistent record of success as an executive and entrepreneur, and his extensive network of contacts in the cannabis industry.

Nicholas J. Etten (2020) Mr. Etten was appointed a director on June 24, 2020. Mr. Etten joined Acreage Holdings in 2018 where he served as the Head of Government Affairs until 2021. Acreage is a vertically integrated, multi-state operator of cannabis licenses and assets in the U.S. In 2017 he founded the Veterans Cannabis Project where he continues to serve as Chairman. Veterans Cannabis Project (VCP) is an organization dedicated to advocating on behalf of cannabis access issues for U.S. military veterans. From 2015 to 2017, Mr. Etten set aside his career to provide care for his seriously ill son. Mr. Etten’s career has been focused on the growth equity market, and prior to Acreage, he held positions including Vice President of Global Business Development for FreightWatch International, and Director of Corporate Development for Triple Canopy. Mr. Etten was an investment professional at Trident Capital, where he focused on the cyber-security space, and an investment banker at Thomas Weisel Partners. Mr. Etten served on active duty as a U.S. Navy SEAL officer. He earned an MBA from the J.L. Kellogg Graduate School of Management at Northwestern University, and a BS in political science from the United States Naval Academy. Mr. Etten was selected for service on the Board because of his experience in and commitment to the cannabis industry, his experience with multi-site cannabis operators, his demonstrated and consistent record of success as an executive, and his extensive network of contacts in the cannabis industry and investment banking world.

Marion Mariathasan (2022)		Marion Mariathasan was appointed as a director on January 17, 2022. Mr. Mariathasan is the CEO and Co-Founder of Simplifya, the cannabis industry’s leading regulatory and operational compliance software platform. The company’s suite of products takes the guesswork out of confusing and continually changing state and local regulations. Featuring SOPs, badge tracking, document storage, tailored reporting and employee accountability features, the company’s Custom Audit software reduces the time clients spend on compliance by up to 45 percent. Mr. Mariathasan is also a serial entrepreneur who has founded or advised numerous startups. He is currently an investor in 22 domestic and international companies that range from cannabis companies to dating apps - four of which he serves as a board member. Mr. Mariathasan studied Architecture and Computer Science at the University of Kansas and Computer Information Systems with a minor in Business Management from Emporia State University. Marion is a regular guest speaker at events such as Denver Start-Up Week, Colorado University’s program on social entrepreneurship, various universities on the topic of entrepreneurship and the United Nations Global Accelerator Initiative. Mr. Mariathasan was selected for service on the Board because of his experience in and commitment to the cannabis industry, his demonstrated and consistent record of success as an executive and entrepreneur, and his extensive network of contacts in the cannabis industry.
Matthew Tarallo (2024)		Matthew Tarallo is the Founder & Principal of AETHER Brand Group, an Incubating and Operating Brand house focused on Adult Consumption Categories, which includes a current portfolio several consumer brands across alcohol and cannabis. With over 15 years in the consumer product goods space, Mr. Tarallo’s career comes with deep experience and success building and leading global brands in both developed and emerging markets, which includes direct P&L ownership across large Fortune 500 & FTSE 100 companies as well as startups. Prior to starting AETHER Brand Group, Mr. Tarallo served as Senior Vice President of Business Development & Beyond Nicotine at Reynolds American, a subsidiary of British American Tobacco. Mr. Tarallo was part of the Reynolds American management team and accountable for building and leading new, multi-category transformational division (Beyond Nicotine) to deliver long-term value by commercializing fast growing, science-backed brands to reach new customers and consumers across wellbeing & stimulation and cannabis. Additionally, Mr. Tarallo was the Global Vice President for The Coca-Cola Company, where he led the Global Amazon Business Unit, a multi-billion-dollar retail business. Mr. Tarallo’s success creating and scaling global brands has garnered large scale recognition and awards such as a nod from Cannes Lions for his global campaign with Coca-Cola, McLaren F1 and Amazon as well as the launch of the US Beyond Nicotine division at Reynolds American. Mr. Tarallo earned his BS in Business Management from Saint Vincent College as well as a Venture Capital Executive Certificate from the University of California, Berkeley, Haas School of Business. Mr. Tarallo lives in Atlanta area with his wife and two young children.

Each of the directors on our Board of Directors was elected or appointed because he has demonstrated an ability to make meaningful contributions to our business and affairs and has skills, experience and background that are complementary to those of our other Board members.

Board Diversity

While a company is listed on Nasdaq, each year the board of directors, pursuant to the requirements of the Nasdaq Stock Market, will review the appropriate characteristics, skills, and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individual candidates, we will consider factors including, without limitation, an individual’s character, integrity, judgment, potential conflicts of interest, other commitments, and diversity. While we have no formal policy regarding board diversity for our board of directors as a whole nor for each individual member, our board of directors will consider such factors as gender, race, ethnicity and experience, area of expertise, as well as other individual attributes that contribute to the total diversity of viewpoints and experience represented on the board of directors. If we are not listed on Nasdaq, we may not continue to consider diversity in the nominations or appointment of directors.

The following is a table indicating the current board diversity as of March 27, 2025.

Total Number of Directors Five

	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	-	5	-	-
Part II: Demographic Background
African American or Black	-	-	-	-
Alaskan Native or Native American	-	-	-	-
Asian	-	-	-	-
Hispanic or Latinx	-	-	-	-
Native Hawaiian or Pacific Islander	-	-	-	-
White	-	4	-	-
Two or More Races or Ethnicities	-	-	-	-
LGBTQ+	-	-	-	-
Did Not Disclose Demographic Background	-	1	-	-

Director Independence

The Nasdaq marketplace rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominations committees be independent, or, if a listed company has no nominations committee, that director nominees be selected or recommended for the board’s selection by independent directors constituting a majority of the board’s independent directors. The Nasdaq marketplace rules further require that audit committee members satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act and that compensation committee members satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act. If we are not listed on Nasdaq or another exchange or trading medium that does not have similar marketplace rules, then we may not continue to adhere to such rules and committee compositions and policies.

Our Board has affirmatively determined that each of Messrs. Shipley, Etten, Mariathasan, and Tarallo qualify as an independent director, as defined under the applicable corporate governance standards of Nasdaq.

Audit Committee

Our Board has established an Audit Committee, which as of the date of this report consists of three independent directors, Mr. Etten (Chairman), Mr. Shipley and Mr. Tarallo. The committee’s primary responsibilities include recommending the selection of our independent registered public accounting firm; evaluating the appointment, compensation and retention of our registered public accounting firm; receiving formal written statements from our independent registered public accounting firm regarding its independence, including a delineation of all relationships between it and the Company; reviewing with such independent registered public accounting firm the planning, scope and results of their audit of our financial statements; pre-approving the fees for services performed; reviewing with the independent registered public accounting firm the adequacy of internal control systems; reviewing our annual financial statements and periodic filings, and receiving our audit reports and financial statements. The Audit Committee also considers the effect on the Company of any changes in accounting principles or practices proposed by management or the independent registered public accounting firm, any changes in service providers, such as the accountants, that could impact the Company’s internal control over financial reporting, and any changes in schedules (such as fiscal or tax year-end changes) or structures or transactions that required special accounting activities, services or resources. The Audit Committee annually will conduct an enterprise fraud risk assessment, and generally will oversee the enterprise risk assessment, and management process framework to insure monitoring for identification, assessment and mitigation of all significant enterprise risk. The Audit Committee will oversee compliance with the code of ethics of the Company and assess waivers of the code. At least annually, the Audit Committee will review and approve all related party transactions that are required to be disclosed publicly in the Company SEC reports.

The Committee may act in reliance on management, the Company’s independent auditors, internal auditors, and advisors and experts, as it deems necessary or appropriate. The Committee has the power, in its discretion, to conduct any investigation it deems necessary or appropriate to enable it to carry out its duties.

The Board has determined that each of our Audit Committee members are independent of management and free of any relationships that, in the opinion of the Board, would interfere with the exercise of independent judgment and are independent, as that term is defined under the enhanced independence standards for audit committee members in the Exchange Act and the rules promulgated thereunder.

The Board has determined that Mr. Etten is an “audit committee financial expert,” as that term is defined in the rules promulgated by the SEC pursuant to the Sarbanes-Oxley Act of 2012. The Board has further determined that each of the members of the Audit Committee shall be financially literate and that at least one member of the committee has accounting or related financial management expertise, as such terms are interpreted by the Board in its business judgment.

Compensation Committee

Our Board has established a Compensation Committee, which as of the date of this report consists of three independent directors, Mr. Shipley (Chairman), Mr. Etten, and Mr. Mariathasan. The committee’s primary responsibilities include approving corporate goals and objectives relevant to executive officer compensation and evaluate executive officer performance in light of those goals and objectives, determining and approving executive officer compensation, including base salary and incentive awards, making recommendations to the Board regarding compensation plans, and administering our stock plan.

Our Compensation Committee determines and approves all elements of executive officer compensation. It also provides recommendations to the Board with respect to non-employee director compensation. The Compensation Committee may not delegate its authority to any other person, other than to a subcommittee.

The Company compensation policies for executive officers has two fundamental objectives: (i) to provide a competitive total compensation package that enables the Company to attract and retain highly qualified executives with the skills and experience required for the achievement of business goals; and (ii) to align certain compensation elements with the Company’s annual performance goals. With respect to each of the Company’s executive officers, the total compensation that may be awarded, including base salary, discretionary cash bonuses, annual stock incentive awards, stock options, restricted stock units and other equity awards, and other benefits and perquisites will be evaluated by the committee. Under certain circumstances, the committee may also award compensation payable upon termination of the executive officer under an employment agreement or severance agreement (if applicable). The Board recognizes that its overall goal is to award compensation that is reasonable when all elements of potential compensation are considered. The committee believes that cash compensation in the form of base salary and discretionary cash bonuses provides our executives with short-term rewards for success in operations, and that long-term compensation through the award of stock options, restricted stock units and other equity awards aligns the objectives of management with those of our stockholders with respect to long-term performance and success. The Board also has historically focused on the Company’s financial condition when making compensation decisions and approving performance objectives and compensation has been weighted more heavily toward equity-based compensation. The committee will continue to periodically reassess the appropriate weighting of cash and equity compensation in light of the Company’s expenditures in connection with commercial operations and its cash resources and working capital needs.

Nominating Committee

Our Board has established a Nominating Committee, which as of the date of this report consists of three independent directors, Mr. Mariathasan (Chairman), Mr. Etten, and Mr. Tarallo. The committee’s primary responsibilities include identifying individuals qualified to serve on the Board as directors and on committees of the Board, establishing procedures for evaluating the suitability of potential director nominees consistent with the criteria approved by the Board, reviewing the suitability for continued service as a director when his or her term expires and at such other times as the committee deems necessary or appropriate, and determining whether or not the director should be re-nominated, and reviewing the membership of the Board and its committees and recommending making changes, if any.

In evaluating director nominees, the Nominating Committee will generally consider the following factors:

● the appropriate size and composition of our Board of Directors; ● whether or not the person is an “independent” director as defined in Rule 5605(a)(2) promulgated by the Nasdaq Stock Market; ● the needs of the Company with respect to the particular talents and experience of its directors; ● the knowledge, skills and experience of nominees in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board of Directors; ● familiarity with national and international business matters and the requirements of the industry in which we operate; ● experience with accounting rules and practices; ● the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members; and ● all applicable laws, rules, regulations and listing standards, if applicable.

There are no stated minimum criteria for director nominees, although the committee may consider such factors as it may deem are in the best interests of the Company and its stockholders. The Nominating Committee also believes it is appropriate for certain key members of our management to participate as members of the Board of Directors.

The Nominating Committee identifies nominees by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board does not wish to continue in service, or if the Nominating Committee decides not to re-nominate a member for re-election, the committee identifies the desired skills and experience of a prospective director nominee in light of the criteria above or determines to reduce the size of the Board. Research may also be performed to identify qualified individuals. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, nor do we anticipate doing so in the future.

Stockholder Communications with Directors

Stockholders may communicate with the Board by sending a letter to the Corporate Secretary, CEA Industries Inc., 385 South Pierce Avenue, Suite C, Louisville, Colorado 80027. Each communication must set forth the name and address of the stockholder on whose behalf the communication is sent and should indicate in the address whether the communication is intended for the entire Board, the non-employee directors as a group or an individual director. Each communication will be screened by the Corporate Secretary or his designee to determine whether it is appropriate for presentation to the Board or any specified director(s). Examples of inappropriate communications include junk mail, spam, mass mailings, resumes, job inquiries, surveys, business solicitations and advertisements, as well as unduly hostile, threatening, illegal, unsuitable, frivolous, patently offensive or otherwise inappropriate material. Communications determined to be appropriate for presentation to the Board, or the director(s) to whom they are specifically addressed, will be submitted to the Board or such director(s) on a periodic basis. Any communications that concern accounting, internal control or auditing matters will be handled in accordance with procedures adopted by the Board of Directors.

~~Code~~ Table of ~~Ethics~~Contents

~~Our Board~~●responding ~~has~~to ~~adopted~~YZi aLabs’ ~~Code~~campaign ofhas ~~Ethics,~~required ~~which is available for review on our website at www.ceaindustries.com~~ and ismay ~~also~~continue ~~available in print, without charge,~~ to ~~any~~require ~~stockholder~~substantial ~~who~~attention ~~requests~~from ~~a copy by writing to us at CEA Industries Inc., 385 South Pierce Avenue, Suite C, Louisville, Colorado 80027 Attention: Corporate Secretary. Each of~~ our ~~directors,~~Board ~~employees~~ and ~~officers,~~management ~~including~~team ~~our~~that ~~Chief~~has ~~Executive Officer,~~distracted and ~~all~~may ofcontinue ~~our other principal executive officers, are required~~ to ~~comply~~distract ~~with~~their ~~the~~attention ~~Code~~from ofour ~~Business~~operations ~~Conduct~~ and ~~Ethics.~~strategic ~~There have~~plans, ~~not~~which ~~been~~has ~~any~~disrupted ~~waivers~~and ofmay ~~the~~continue ~~Code of Ethics relating~~ to ~~any~~disrupt of our ~~executive officers or directors in the past year.~~operations;

~~Insider Trading~~●responding ~~Arrangements~~to YZi Labs’ campaign and ~~Policies~~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;

~~We have~~●YZi ~~adopted~~Labs’ ancampaign ~~insider~~has ~~trading~~created ~~compliance~~and ~~policy~~may ~~governing~~continue ~~the~~to ~~purchase,~~create ~~sale,~~perceived ~~and/or~~uncertainties ~~other~~as ~~dispositions~~to of our ~~securities~~future ~~by our directors~~direction, ~~officers,~~ ~~and~~strategy ~~employees~~or ~~that~~leadership ~~we believe is reasonably designed to promote compliance with insider trading laws, rules~~ and ~~regulations, and~~may ~~the~~result ~~exchange~~in ~~listing standards applicable to us. The insider trading policy prohibits~~ the ~~use~~loss of ~~material~~potential ~~non-public~~business ~~information about the Company when making decisions to purchase~~opportunities, ~~sell,~~make ~~give~~it ~~away~~more ordifficult ~~otherwise trade in the Company’s securities or~~ to ~~provide such~~attract ~~information to others outside the Company. We have established black-out periods to which covered persons are subject related to the filing of our regular reports with the Securities~~ and ~~Exchange~~retain ~~Commission.~~qualified ~~The~~directors, ~~Company~~executives, ~~may impose additional black-out periods from time to time as~~ other ~~types~~employees, ofinvestors ~~material~~and ~~non-public~~commercial ~~information occur when material non-public events or disclosures are pending. Covered persons are permitted to trade in the Company’s securities only when there is no black-out period in effect~~ and ~~such~~financial ~~trade has been pre-cleared by the appointed Company officer~~providers, orand ~~when~~cause aour ~~qualified~~stock ~~10b5-1~~price ~~plan~~to ~~has~~experience ~~been~~periods ~~established~~of involatility ~~accordance with federal securities laws. No covered person has adopted~~ or ~~terminated a Rule 10b5-1 trading plan during the last fiscal quarter of the fiscal year to which this report relates.~~stagnation;

~~Clawback Policy~~●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

~~Our Board has adopted~~ ●a ~~written~~deterioration ~~policy~~in toour ~~recover~~relationship ~~“excess”~~with ~~compensation~~YZi ~~that is granted~~Labs, ~~earned,~~whose oraffiliates ~~vested~~were ~~based~~involved ~~wholly or~~ in ~~part~~ ~~upon~~ the ~~attainment~~creation of aBNB ~~financial~~and ~~reporting~~BNB ~~measure.~~Chain, ~~The compensation includes both cash-based~~ and ~~equity-based~~who ~~incentives.~~we ~~The compensation~~believe ~~covered~~continues ~~includes incentive awards awarded~~ to ~~any~~hold ~~individuals~~substantial ~~(including~~amounts ~~former employees) who served as an executive officer during the three most recently completed fiscal years preceding the date on which the preparation~~ of ~~an accounting restatement is required~~BNB, ~~provided~~ ~~that~~could ~~the~~negatively ~~executive~~impact ~~officers~~our ~~were~~digital ~~awarded~~asset ~~more~~treasury ~~incentive~~strategy awards than they would have received if the financial statements had been prepared correctly. The recovery will include an executive incentive award even if the executive was not involved in preparing the financial statements or ~~did~~damage ~~not~~our ~~commit~~reputation ~~misconduct~~and ~~that~~be ~~led to the restatement. Restatements attributable to~~ an ~~inadvertent~~impediment ~~error also will subject executive officers~~ to ~~the~~potential ~~recovery~~relationships ofor ~~previously~~opportunities ~~received~~involving ~~incentive awards~~BNB.

~~Meetings~~ In addition, if YZi Labs is successful in expanding the size of the Board and ~~Committees~~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.

~~Our Board~~We iscannot ~~responsible~~assure ~~for~~you ~~overseeing~~as to the ~~management~~outcome ofor ~~our~~timing ~~business.~~of Weany ~~keep~~matters ~~our~~relating ~~directors~~to ~~informed~~actions ofby ~~our~~YZi ~~business~~Labs ~~at meetings~~ and ~~through reports~~our ~~and~~responses ~~analyses~~thereto ~~presented~~or to the ~~Board~~ultimate ~~and~~impact ~~the~~on ~~committees of the Board. Regular communications between~~ our ~~directors~~business, ~~and~~results ~~management also occur outside~~ of ~~formal~~operations ~~meetings~~or offinancial ~~the Board and committees of the Board~~condition.

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

~~Our Board~~On ~~generally~~December ~~holds~~26, ~~meetings~~2025, onthe Board adopted a ~~quarterly~~stockholder ~~basis~~rights ~~but~~plan ~~may~~(the ~~hold~~“Rights ~~additional~~Plan”), ~~meetings~~which asis ~~required.~~currently Inscheduled ~~2024,~~to ~~the~~expire ~~Board~~on ~~held~~December 1126, ~~meetings~~2026. ~~Most~~ ofWhile ~~our~~in ~~directors~~force ~~attended~~or ~~100%~~if ofotherwise extended, the ~~Board~~Rights ~~meetings~~Plan ~~that~~may ~~were~~have ~~held~~certain ~~during~~anti-takeover effects. Specifically, the ~~periods~~rights ~~when~~issued hepursuant ~~was~~to athe ~~director~~Rights ~~and~~Plan ~~each~~will ofcause ~~our~~substantial ~~directors attended~~dilution ~~100%~~to ofa ~~the~~person ~~meetings~~or ofgroup ~~each~~that ~~committee~~acquires beneficial ownership of ~~the~~more ~~Board~~than ona ~~which~~specified hepercentage ~~served~~of ~~that~~our ~~were~~outstanding ~~held~~common ~~during~~stock without the ~~periods~~prior ~~that~~approval heof ~~served~~our ~~on such committee~~Board. The ~~Board~~Rights ~~also~~Plan ~~took~~is anot ~~number~~intended ofto ~~actions~~interfere bywith ~~unanimous~~any ~~consent,~~merger ~~pursuant~~or toother ~~Nevada~~business ~~corporate~~combination ~~law~~approved ~~and~~by ~~our~~the ~~by-laws.~~Board, Webut dothe ~~not have~~Rights aPlan ~~policy~~may ~~requiring~~deter ~~that~~certain ~~directors~~parties ~~attend~~from ~~our~~pursuing ~~annual~~strategic ~~meetings~~transactions ofinvolving ~~stockholders~~us, including potential acquisitions.

We are party to the AMA which contains terms that are materially adverse to our stockholders, and we may be unable to reform or terminate the AMA without incurring substantial costs despite pending litigation against the Asset Manager.

We are party to the AMA with the Asset Manager, pursuant to which the Asset Manager provides asset management and related services with respect to our digital assets in exchange for a management fee equal to 1.75% of our treasury asset net asset value, subject to certain adjustments. The AMA has a term of 20 years from its original execution date and contains a liquidated damages provision that, upon a termination by us for any reason, would accelerate and render payable fees representing nearly 20 years of future management fees. We believe these terms are not consistent with market practice for comparable asset management arrangements and are materially adverse to the interests of our stockholders.

Our Board sought to renegotiate the AMA to align its terms with market standards, including by proposing reductions to the management fee rate, a substantially shortened term and a commensurate reduction in liquidated damages. The Asset Manager did not agree to any of these proposed amendments and did not engage constructively or in good faith with our renegotiation efforts. Due to the restrictive terms of the AMA as currently in effect, our Board does not have the ability to unilaterally amend the AMA and cannot terminate the AMA without incurring a substantial break fee.

On May 22, 2026, we commenced litigation against the Asset Manager in the United States District Court for the District of Delaware, seeking a declaratory judgment that the AMA is void from inception as unconscionable and that all fees paid to the Asset Manager since inception be returned to us. Alternatively, we are seeking a declaration that the liquidated damages provision in the AMA constitutes an unenforceable penalty under applicable law. We cannot predict the outcome of this litigation or the timeframe in which it will be resolved. Litigation is inherently uncertain, costly and time-consuming, and an adverse outcome could leave us bound by the AMA’s existing terms for the remainder of its 20-year term, obligate us to continue paying fees that we believe are above market, and expose us to the liquidated damages provision in the event of any future termination. Even if we prevail in whole or in part, the litigation process may divert significant management attention and resources from our business operations.

~~Board Leadership~~Table ~~Structure~~of Contents

~~The Board~~For ~~may,~~so ~~but~~long isas ~~not~~the ~~required~~AMA ~~to,~~remains ~~select~~in aeffect ~~Chairman~~on ofits ~~the~~current ~~Board~~terms, ~~who~~we ~~presides~~will ~~over~~continue ~~the~~to ~~meetings~~incur ofmanagement ~~the~~fees ~~Board~~that ~~and~~we ~~meetings~~believe ofare ~~the~~excessive ~~stockholders and~~relative ~~performs~~to ~~such~~market ~~other~~standards, ~~duties~~which as may beadversely ~~assigned~~affect toour ~~him~~financial bycondition and the ~~Board.~~value ~~The~~of ~~positions~~our ofdigital ~~Chairman~~assets. ofOur ~~the~~inability ~~Board~~to ~~and~~reform ~~Chief~~or ~~Executive~~terminate ~~Officer may~~the beAMA ~~filled~~on byacceptable ~~one~~terms ~~individual~~could orhave ~~two~~a ~~different~~material ~~individuals.~~adverse ~~Currently~~effect ~~the~~on ~~positions~~our ofbusiness, ~~Chairman~~financial ofcondition, ~~the~~results ~~Board~~of operations and ~~Chief~~the ~~Executive~~market ~~Officer are~~price ~~held~~of byour ~~Mr.~~common ~~McDonald~~stock.

~~Board’s Role~~The Company has identified material weaknesses in ~~Risk~~its ~~Oversight~~internal control over financial reporting.

~~While risk~~We ~~management~~have isidentified ~~primarily~~material ~~the~~weaknesses ~~responsibility~~in ofour ~~the~~internal ~~Company’s~~controls ~~management~~over ~~team,~~financial ~~the~~reporting. ~~Board~~Specifically, iswe ~~responsible~~lack ~~for~~a ~~the~~sufficient ~~overall~~complement ~~supervision~~ of ~~the~~personnel ~~Company’s~~with ~~risk~~accounting ~~management~~expertise ~~activities.~~and ~~The~~an ~~Board~~adequate assupervisory areview ~~whole~~structure ~~has~~commensurate ~~responsibility~~with ~~for~~our ~~risk~~financial ~~oversight~~reporting requirements, ~~and~~we ~~each~~have ~~Board~~inadequate ~~committee has~~segregation ~~responsibility~~of ~~for~~duties ~~reviewing~~due ~~certain risk areas and reporting~~ to ~~the~~our ~~full~~limited ~~Board.~~number ~~The oversight responsibility~~ of ~~the~~accounting ~~Board~~personnel, and ~~its committees~~we ishave ~~enabled~~insufficient bycontrols ~~management reporting processes that are designed~~ to ~~provide~~verify ~~visibility to~~ the ~~Board~~accuracy ~~about the identification, assessment,~~ and ~~management~~completeness of ~~critical~~spreadsheets ~~risks~~on ~~and~~which ~~management’s~~we ~~risk~~place ~~mitigation~~significant ~~strategies~~reliance infor ~~certain~~financial ~~focus~~reporting, ~~areas.~~including ~~These~~with ~~areas~~respect ~~of focus~~to ~~include strategic~~revenue, ~~operational~~taxes, ~~financial~~stock-based ~~and reporting, succession and~~ compensation and other areas.

~~The Board~~These ~~oversees~~weaknesses ~~risks~~could ~~associated~~result ~~with~~in ~~their~~errors ~~respective~~or ~~areas~~misstatements ofin ~~responsibility.~~our ~~The~~financial ~~Board~~statements, ~~oversees:~~which ~~(i)~~may ~~risks~~not ~~and~~be ~~exposures~~detected ~~associated with~~in a timely manner. To note, we filed amendments to our ~~business~~Quarterly ~~strategy~~Reports ~~and~~on ~~other~~Form ~~current~~10-Q/A ~~matters~~for ~~that~~the ~~may~~quarterly ~~present~~periods ~~material~~ended ~~risk~~October 31, 2025 and January 31, 2026 to restate our previously issued financial ~~performance,~~statements. ~~operations~~We are actively working to remediate these weaknesses by enhancing our control environment, ~~prospects or~~and ~~reputation~~we appointed a Chief Financial Officer effective March 9, ~~(ii)~~2026, ~~risks~~which separates the principal financial and ~~exposures~~accounting ~~associated~~officer ~~with~~function ~~management~~from ~~succession~~the ~~planning~~Chief Executive Officer role and ~~executive~~is ~~compensation~~expected ~~programs~~to strengthen our financial reporting capabilities, supervisory review structure and ~~arrangements~~segregation of duties. However, ~~including~~ ~~equity~~we ~~incentive~~cannot ~~plans~~assure you that these or other remediation measures will be sufficient to address the identified weaknesses or prevent future control deficiencies, ~~and~~particularly ~~(iii)~~given ~~risks~~our limited financial resources and ~~exposures~~the economic constraints associated with ~~director~~expanding ~~succession~~our ~~planning,~~accounting ~~corporate~~staff ~~governance,~~ and ~~overall~~ ~~board~~improving ~~effectiveness~~our financial systems.

~~Management provides~~The ~~regular~~existence ~~updates to the Board regarding the management~~ of ~~the~~these ~~risks~~material ~~they~~weaknesses ~~oversee~~could atadversely ~~each~~affect ~~regular~~our ~~meeting~~ability ofto ~~the~~accurately ~~Board.~~report Weour ~~believe that~~financial ~~the~~condition ~~Board’s role in risk oversight must be evaluated on a case-by-case basis~~ and ~~that~~results ~~our~~of ~~existing~~operations. ~~Board’s~~It ~~role~~may inalso ~~risk oversight~~impact isinvestor ~~appropriate. However~~confidence, wepotentially ~~continually~~leading ~~re-examine~~to ~~the~~a ~~manners~~decline in ~~which~~our ~~the~~stock ~~Board~~price ~~administers~~and ~~its~~increased ~~oversight~~scrutiny ~~function~~from onregulatory ~~an ongoing basis to ensure that they continue to meet the Company’s needs~~authorities.

~~Section 16(~~We are a) ~~Beneficial~~holding ~~Ownership~~company ~~Reporting~~and ~~Compliance~~depend upon our subsidiaries for our cash flow.

~~Section 16(~~We are a) ofholding ~~the~~company. ~~Securities~~Our ~~Exchange~~subsidiaries ~~Act~~conduct all of ~~1934,~~our asoperations ~~amended~~and ~~(the~~own ~~“Exchange~~substantially ~~Act”)~~all ~~requires~~of our ~~executive~~tangible ~~officers~~assets. Consequently, ~~directors and~~our ~~persons~~cash ~~who~~flow ~~beneficially~~and ~~own~~our ~~more~~ability ~~than~~to ~~10%~~meet of our ~~common~~obligations ~~stock~~or to ~~file~~make ~~initial~~other ~~reports~~distributions ofin ~~ownership~~the ~~and~~future ~~reports~~will ofdepend ~~changes~~upon inthe ~~ownership with~~cash ~~the~~flow ~~SEC.~~of ~~Such~~our ~~persons~~subsidiaries ~~are~~and ~~required~~our bysubsidiaries’ ~~SEC~~payment ~~regulations~~of funds to ~~furnish~~ us ~~with~~in ~~copies~~the form of ~~all~~distributions, ~~Section~~dividends, ~~16(a)~~tax ~~reports~~sharing ~~filed~~payments byor ~~such persons~~otherwise.

~~Based solely~~The onability ~~our review~~ of ~~the~~our ~~copies~~subsidiaries ofto ~~reports~~make ~~furnished~~any payments to us, ~~other~~will ~~than~~depend ason ~~noted~~their ~~below,~~earnings weand ~~believe~~cash ~~that~~flow, ~~during~~ the ~~fiscal~~terms ~~year~~of ~~ended December~~their ~~31,~~current ~~2024,~~and ~~all~~future ~~executive officers~~indebtedness, ~~directors~~tax considerations and ~~greater~~legal ~~than~~and ~~10%~~contractual ~~beneficial~~restrictions ~~owners~~on oftheir ~~our~~ability ~~common~~to ~~stock~~make ~~complied with the reporting requirements of Section 16(a) of the Exchange Act~~distributions.

~~Executive Officers~~Our subsidiaries are separate and distinct legal entities. Any right that we have to receive any assets of or distributions from any of our subsidiaries upon the bankruptcy, dissolution, liquidation or reorganization, or to realize proceeds from the sale of their assets, will be junior to the claims of that subsidiary’s creditors, including trade creditors and holders of debt that the subsidiary issued.

~~Executive officers~~ITEM ~~are appointed by our Board and serve at its discretion~~1B. ~~Set~~UNRESOLVED ~~forth~~STAFF ~~below is information regarding our executive officers as of the date of this report.~~COMMENTS

Name		Age		Positions
Anthony K. McDonald		66		Chief Executive Officer and President; Director (Mr. McDonald also serves as the company’s principal financial officer but is not designated with that or similar title.)

None.

~~Mr. McDonald’s~~ITEM ~~biographical information is included with such information for the other members of our Board~~1C. CYBERSECURITY

We have a cybersecurity program to identify, monitor, and mitigate cybersecurity risks. The security program consists of responsibilities for information security and incident response and is overseen by a third-party consultant with guidance from subcontracted cybersecurity vendors that our third-party consultant contracts. We consider cybersecurity risks alongside other company risks and consult with subject matter experts where necessary to identify cybersecurity risks and evaluate their nature and severity.

The Audit Committee of the Board oversees and evaluates our cybersecurity assessment and management policies. Our Chief Executive Officer conducts the regular assessment and management of material risks from cybersecurity threats, including review with our IT team and third party providers. All employees and consultants are directed to report to senior management with any irregular or suspicious activity that could indicate a cybersecurity threat or incident. Management offers cybersecurity updates to the Audit Committee on at least an annual basis, and more frequently if circumstances warrant. These briefings include assessments of risks, the threat landscape, and updates on any incidents. The Audit Committee actively engages with management on the development and implementation of cybersecurity policies and practices, offering insights and guidance.

~~Item 11.~~Table ~~Executive~~of ~~Compensation~~Contents

~~Director Compensation~~Our ~~Program~~third-party consultant provides and assists with implementation on a formal IT Security Policy to provide appropriate governance over information security including control requirements for change management and patching, multifactor authentication, data backup, security monitoring, and mobile device management. Management coordinates with its third-party consultant on security controls and any issues are reported to the Audit Committee. In addition, we carry insurance that provides levels of reimbursement protection against the potential losses arising from a cybersecurity incident; however, the insurance may not cover all the costs that we might incur, and we may suffer direct economic loss.

~~On December~~We 16have not had any reportable cybersecurity breaches, ~~2024~~including (what we may perceive or recognize as cybersecurity incidents or credible threats during the ~~“Effective~~twelve ~~Date”)~~months ended April 30, 2026 and 2025. To date, as a result, there has not been any material adverse effect on our business operations or financial condition. If there is a cybersecurity attack and an infiltration of our files, data, customer data and the ~~Board~~like, ~~adopted~~there would be a ~~revised~~material ~~compensation~~adverse ~~plan~~effect ~~for~~on ~~directors~~our business, our reputation, our operations and financial condition. ~~The~~For ~~Plan~~example, ~~was~~our ~~effective retroactively~~reputation ~~for~~would be damaged in the ~~then~~event ~~current~~of ~~independent~~a ~~directors~~cybersecurity infiltration. If there were a cybersecurity infiltration, we could lose access to our data which would disrupt our operations, and ~~provided~~we ~~compensation~~even ~~for~~may ~~subsequent~~not ~~directors~~be ~~elected~~able to operate. Such a loss of access might be temporary or ~~appointed~~permanent, ~~after~~ and it might be localized or general. The level of disruption will depend on our backup systems. Our clients’ financial and other data could be taken and used against us reputationally or to damage our clients in different ways. In the ~~Effective~~latter ~~Date~~instance, we may be liable for monetary damages to our clients. We may be held for cyber ransom, which would be loss to our financial resources. Our inability to operate, payment of damages, payment of ransom, and the ~~plan~~costs of reparation of our systems, consultants and tangential expenses will all result in damage to our business and our financial resources.

~~The Company~~ITEM will pay its independent directors an annual cash fee of $25,000, payable quarterly in advance on the first business day of each calendar quarter, prorated for the period of service in the year and which is consideration for their participation in: (i) any regular or special meetings of the Board or any committee thereof attended in person, (ii) any telephonic meeting of the Board or any committee thereof in which the director is a member, (iii) written consent actions, (iv) any non-meeting consultations with the Company’s management, and (iv) any other services provided by them in their capacities as directors (other than services as the Chairman of the Board, the Chairman of the Company’s Audit Committee, and the other Committees’ Chairman)2. PROPERTIES

~~At the~~We ~~time~~own ofno ~~initial~~real ~~election~~property. orOn ~~appointment~~July 28, ~~each~~2021, ~~independent~~we ~~director~~executed ~~will~~a ~~receive~~lease, anwhich ~~equity~~became ~~retention~~effective ~~award~~November in1, ~~the~~2021, ~~form~~for ofour ~~restricted stock~~manufacturing ~~units~~and ~~(“RSUs”).~~headquarters ~~The~~office ~~aggregate~~space ~~value of the RSUs~~ at ~~the~~385 ~~time~~S. ofPierce ~~grant~~Avenue, ~~will~~Suite beC, ~~$25~~Louisville,~~000,~~ ~~with~~Colorado ~~the~~80027. ~~number~~The term of ~~shares underlying~~ the ~~RSUs~~lease tocommenced beNovember ~~determined~~1, ~~based~~2021, onand ~~the~~continues ~~closing~~through ~~price~~January of31, ~~the~~2027. ~~Company’s~~Our ~~common~~leased ~~stock~~space onis ~~the~~approximately ~~trade~~11,491 ~~date~~square ~~immediately~~feet. ~~prior~~We tobelieve ~~the~~that ~~date of~~our ~~grant.~~lease ~~Vesting~~is ofat ~~the~~market ~~RSUs~~rates ~~will~~and bethat asthere ~~follows:~~is ~~(i)~~sufficient ~~50%~~space atavailable in the ~~time of grant~~Louisville, ~~and~~Colorado ~~(ii)~~area ~~50%~~to onobtain ~~the~~additional ~~first~~or ~~anniversary~~other ofspace ~~the~~if ~~grant~~and ~~date~~when required.

~~In addition,~~We onhave ~~the~~35 ~~first~~agreements ~~business~~to ~~day~~lease ofretail ~~January each year~~space, ~~each~~office ~~independent~~and ~~director~~manufacturing ~~who~~space ~~was~~in ~~not~~Manitoba, ~~initially~~Saskatchewan ~~appointed~~and orOntario, ~~elected~~Canada. inThe ~~the previous~~earliest ~~year~~lease ~~will~~expiry ~~receive~~date anis ~~equity~~September ~~retention~~30, ~~award~~2026 inand the ~~form~~latest ofexpiry ~~RSUs.~~date ~~The~~is ~~aggregate~~March ~~value~~31, of2033. ~~the~~We ~~RSUs~~currently athave ~~the~~41,274 ~~time~~square feet of ~~grant~~retail ~~will~~space ~~be $25~~and 7,~~000,~~772 ~~with~~square ~~the~~feet ~~number~~ of ~~shares~~warehouse ~~underlying~~and ~~the~~office ~~RSUs~~space. toWe beanticipate ~~determined~~expanding ~~based~~our onnumber ~~the~~of ~~closing~~retail ~~price~~stores ofin ~~the~~several ~~Company’s~~provinces ~~common~~but ~~stock on~~believe ~~the~~our ~~trade~~warehouse ~~date~~space ~~immediately~~is ~~prior~~adequate tofor ~~the~~our ~~date~~current ~~of grant~~business. ~~These~~We ~~RSUs~~ will becontinue ~~fully~~to ~~vested~~evaluate atour ~~date~~needs ofand ~~grant~~make adjustments accordingly.

~~The Company~~ITEM ~~will~~3. ~~pay~~LEGAL the Audit Committee Chairman an additional annual fee of $10,000, payable quarterly in advance on the first business day of each calendar quarter, prorated for the period of service in the year, for the services as the Audit Committee Chairman.PROCEEDINGS

~~The Company~~From ~~will~~time ~~pay~~to time, in the ~~Chairmen~~normal course of ~~any~~business, ~~other~~the ~~committee~~Company ofis ~~the~~subject ~~Board~~to anclaims ~~additional~~and ~~annual~~legal ~~fee~~proceedings. ofLitigation $5is inherently unpredictable,~~000,~~ ~~payable~~and ~~quarterly~~the inCompany's ~~advance~~assessments ~~on the~~may ~~first~~change ~~business~~as ~~day~~matters ofprogress. ~~each~~The ~~calendar~~Company ~~quarter,~~expenses ~~prorated~~legal fees as incurred and records a liability for ~~the~~contingent ~~period~~losses ofwhen ~~service~~it inis both probable that a loss has been incurred and the ~~year~~amount can be reasonable estimated. An unfavorable outcome to any matter, ~~for~~if ~~services~~material, ascould aadversely ~~Committee~~affect ~~Chairman~~the Company's financial condition, liquidity or results of operations.

~~There is~~On noFebruary ~~additional~~24, ~~compensation~~2026, ~~paid~~Abraham toGomez, ~~members~~an ofindividual, ~~any~~filed ~~committee~~a civil complaint in the Superior Court of the ~~Board~~State of California, County of Tulare, captioned Abraham Gomez v. ~~Interested~~CEA Industries, Inc., et al., (iCase No.e VCU331863), against the Company and Hans Thomas, a former director of the Company. ~~Executive~~The ~~directors~~complaint asserts various claims against the defendants, including claims for fraud, promissory estoppel, quantum meruit and unjust enrichment, arising from alleged investment-related discussions and alleged services purportedly performed for the benefit of the Company. The plaintiff seeks damages, including compensatory damages according to proof (which the complaint alleges exceed approximately $2.75 million), ~~serving~~together onwith interest, attorneys' fees, costs and other relief. On March 27, 2026, the ~~Board do~~Company ~~not~~filed ~~receive~~a ~~compensation~~Notice of Removal to the United States District Court for ~~their~~the ~~Board~~Eastern ~~service~~District of California. On April 3, 2026, the Company filed a motion to dismiss the complaint for lack of personal jurisdiction and failure to state a claim upon which relief can be granted. The Company’s motion to dismiss is fully briefed before the court and scheduled for oral argument on June 24, 2026. The Company intends to defend the action vigorously. At this preliminary stage of the matter, the Company cannot reasonably estimate the possible loss or range of loss, if any, that may result from the proceeding.

~~Each director~~On isor ~~responsible~~about ~~for~~April 17, 2024, Optima Consulting Services, LLC ("Optima"), a client of the ~~payment~~Company under an equipment and engineering contract, notified the Company of ~~any~~a potential claim and demanded mediation. On or about October 28, 2024, Optima asserted claims for negligent/defective design and breach of warranty, alleging damages exceeding $2.0 million. The Company denied the claims, believing it satisfied all ~~income~~contractual ~~taxes~~obligations ~~arising~~and ~~with~~that ~~respect~~any issues were attributable to Claimant and/or third parties. The matter was mediated under the ~~issuance~~AAA ofprocess. ~~common~~Effective ~~stock~~May ~~and~~9, 2025, the ~~vesting and~~parties entered into a settlement agreement under which all claims were resolved for a payment of ~~RSUs~~$0.3 million by the Company. This settlement payment was funded by the Company's insurance coverage, except for $35,000 representing the deductibles, which was paid by the Company.

The Company will also reimburse directors for out-of-pocket expenses incurred in attending Board and committee meetings and undertaking certain matters on the Company’s behalf.

Indemnification; Insurance

Under the Nevada Revised Statutes and pursuant to our charter and bylaws, as currently in effect, the Company may indemnify the Company’s officers and directors for various expenses and damages resulting from their acting in these capacities. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our officers and directors pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

The Company has entered into indemnification agreements with its directors and executive officers. The indemnification agreements are intended to provide the Company’s directors the maximum indemnification permitted under the Nevada Revised Statutes, unless otherwise limited by the Company’s charter and bylaws. Each indemnification agreement provides that the Company shall indemnify the director or executive officer who is a party to the agreement (an “Indemnitee”), including the advancement of legal expenses, if, by reason of his corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding. Each indemnification agreement further provides that the applicable provisions of the Company’s charter and bylaws regarding indemnification shall control in the event of any conflict with any provisions of such indemnification agreements.

~~The Company~~Table ~~may secure insurance on behalf~~ of any person who is or was or has agreed to become a director or officer of the Company for any liability arising out of his actions, regardless of whether the Nevada Revised Statues would permit indemnification. The Company has obtained liability insurance for its officers and directors.Contents

~~Director Compensation~~On ~~Table~~October 20, 2023, Sweet Cut Grow, LLC and Green Ice, LLC, 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 denied the claims and 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. In April 2026, the Company settled the matter for $2.3 million. Our insurance covered $1.8 million, the equipment supplier paid $.2 million and the Company paid $.3 million. The settlement did not have a material adverse effect on the Company's financial condition or results of operations.

~~The following~~On ~~table~~May ~~sets~~22, ~~forth~~2026, the ~~compensation~~Company ~~earned~~filed bya orcomplaint ~~awarded~~against orthe ~~paid~~Asset Manager, in ~~2024~~the United States District Court for the District of Delaware, regarding the Asset Management Agreement. The complaint seeks a declaration that the Asset Management Agreement is void from inception as unconscionable and ~~2023~~orders all fees paid by the Company to 10X under the ~~individuals~~Asset ~~who~~Management ~~served~~Agreement assince ~~our~~inception ~~independent directors~~be ~~during~~returned ~~such~~to ~~period~~the Company. Alternatively, the complaint seeks a declaration that a liquidated damages clause in the Asset Management Agreement, which would accelerate nearly 20 years of future fees upon termination, is an unenforceable penalty.

Name	Year	Fees Earned or Paid in Cash (1)		Stock Awards (2), (3), (4)		Option Awards (5)		Total
James R. Shipley	2024	$	30,000	$	-	$	-	$	30,000
	2023	$	30,000	$	25,000	$	-	$	55,000
Nicholas J. Etten	2024	$	30,204	$	25,000	$	-	$	55,204
	2023	$	30,000	$	25,000	$	-	$	55,000
Troy Reisner	2024	$	35,000	$	25,000	$	-	$	60,000
	2023	$	35,000	$	25,000	$	-	$	60,000
Marion Mariathasan	2024	$	25,204	$	25,000	$	-	$	50,204
	2023	$	25,000	$	25,000	$	-	$	50,000
Matthew Tarallo	2024	$	1,019	$	12,500	$	-	$	13,519

ITEM 4. MINE SAFETY DISCLOSURES

~~(1) Excludes reimbursement of out-of-pocket expenses~~None. (2) Reflects grants to three independent directors of 3,788 each of restricted stock units on January 2, 2024, in connection with the director compensation plan. The shares vested immediately. Mr. Shipley declined this issuance. (3) Reflects grants to each independent directors of 2,480 of restricted stock units on January 3, 2023, in connection with the director compensation plan. The shares vested immediately. (4) Reflects grant to one independent directors of 3,058 of restricted stock units on December 17, 2024, in connection with his appointment. 1,529 shares were immediately vested and 1,529 will vest on December 17, 2025. (5) Reflects the dollar amount of the grant date fair value of awards, measured in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718 (“Topic 718”) without adjustment for estimated forfeitures. For a discussion of the assumptions used to calculate the value of equity awards, refer to Note 13 to our consolidated financial statements for the fiscal year ended December 31, 2024 included in this Annual Report.

~~The aggregate~~Table ~~number~~ of ~~non-qualified stock options and restricted stock units held as of December 31, 2024, by each independent director are as follows:~~Contents

Name	Shares Underlying Non-Qualified Stock Options (1)		Shares Underlying Restricted Stock Units (2)		Total
James R. Shipley		880		-		880
Nicholas J. Etten		880		-		880
Matthew Tarallo		-		1,529		1,529

PART II

~~(1)~~ITEM Includes grant to each independent director on June 24, 2020 of 555 non-qualified stock options to purchase shares of the Company’s common stock, a grant to each independent director on August 20, 2021 of non-qualified stock options to purchase 64 shares of the Company’s common stock, and a grant on January 3, 2022 of non-qualified stock options to purchase 260 shares of the Company’s common stock5. ~~(2)~~MARKET ~~Includes~~FOR ~~grant~~REGISTRANT'S toCOMMON ~~one independent director on December 17~~EQUITY, ~~2024~~RELATED ofSTOCKHOLDER ~~restricted~~MATTERS ~~stock~~AND ~~units~~ISSUER toPURCHASES ~~purchase~~OF ~~3,058~~EQUITY ~~shares of the Company’s common stock. 1,529 shares vested and issued, 1,529 shares will vest on December 16, 2025. The grant was pursuant to the director’s initial election to the board.~~SECURITIES

~~Subsequent to~~Our shares of common stock currently are quoted on Nasdaq under the ~~financial~~symbol ~~statement~~"BNC." ~~date~~In addition, ~~the~~we ~~following~~have ~~cash~~two ~~fees~~classes ~~were~~of ~~paid~~publicly traded warrants to ~~directors~~purchase ~~based~~shares of common stock that are quoted on ~~the~~Nasdaq ~~December~~under ~~16,~~the ~~2024~~symbols ~~compensation~~"BNCWW" ~~plan~~and "BNCWZ."

Name	Cash Fees Paid
James R. Shipley	$	7,500
Nicholas J. Etten	$	8,750
Marion Mariathasan	$	7,500
Matthew Tarallo	$	6,250
	$	30,000

Based on information made available to us by our transfer agent, at June 15, 2026, there were approximately 55 record holders of our common stock, one of which was Cede & Co., a nominee for The Depository Trust Company.

~~Subsequent to~~All ~~the~~of our common stock held by brokerage firms, banks and other financial ~~statement~~institutions ~~date~~as nominees for beneficial owners are considered to be held of record by Cede & Co., ~~the~~who ~~following~~is ~~restricted~~considered to be one stockholder of record. A substantially greater number of holders of our common stock ~~units~~are ~~were~~"street ~~issued~~name" toor ~~directors~~beneficial ~~based~~holders, onwhose ~~the~~common ~~December~~stock 16is held of record by banks, ~~2024~~brokers ~~compensation plan~~and other financial institutions.

Name	Shares Underlying Restricted Stock Units
James R. Shipley		3,079
Nicholas J. Etten		3,079
Marion Mariathasan		3,079
		9,237

~~These restricted~~The table below summarizes the stock ~~units~~repurchase ~~vested~~activity ~~upon~~under ~~grant.~~our stock repurchase program during the three months ended April 30, 2026:


	Total Number of Shares Purchased(A)	Average Price Paid per Share(B)		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
February 1, 2026 to February 28, 2026	545,386	$	4.24	545,386	$	234,331
March 1, 2026 to March 31, 2026	185,698	3.72		185,698	233,465
April 1, 2026 to April 30, 2026	287,879	2.90		287,879	232,735
Total for the Quarter Ended April 30, 2026	1,018,963	3.77		1,018,963

A.On September 22, 2025, our Board of Directors announced that they had authorized a stock repurchase program that provides for the repurchase of up to $250.0 million of our common stock, with no expiration from the date of authorization. Share repurchases under our stock repurchase program may be made through open market transactions, privately-negotiated transactions, accelerated share repurchases, or otherwise in accordance with applicable federal securities laws including through Rule 10b5-1 trading plans and under Rule 10b-18, subject to market conditions. Repurchases will be funded through a combination of cash on hand, future cash flow from operations, and borrowings under our debt obligations.

B.Average price paid per share for open market purchases includes broker commissions.

ITEM 6. [ RESERVED ]

~~Executive Compensation~~Table of Contents

~~Summary Executive~~ITEM ~~Compensation~~7. ~~Table~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following ~~table~~discussion ~~summarizes~~should ~~compensation~~be ~~earned~~read byin orconjunction ~~awarded~~with orour ~~paid~~Consolidated toFinancial Statements and related notes included elsewhere in this Annual Report, which include additional information about our ~~named~~accounting ~~executive~~policies, ~~officers~~practices, ~~for~~and the ~~years~~transactions ~~ended~~underlying ~~December~~our 31financial results. In addition to historical information, ~~2024~~ the following discussion and ~~2023~~other parts of this Annual 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 this Annual Report.

Name and Principal Position	Year		Salary		Bonus		Stock Awards (1)		Option Awards (1)		Non-equity Incentive Plan Compensation		Non-qualified Deferred Compensation Earnings		All Other Compensation		Total
Anthony K. McDonald - Chief Executive Officer and President (2)		2024	$	350,000	$	-	$	-	$	-	$	-	$	-	$	21,656	$	371,656
		2023	$	350,000	$	10,938	$	-	$	32,370	$	-	$	-	$	22,245	$	415,552
Ian K. Patel- Chief Financial Officer, Secretary, and Treasurer (3)		2024	$	173,654	$	-	$	-	$	-	$	-	$	-	$	11,851	$	185,505
		2023	$	275,000	$	6,445	$	-	$	19,075	$	-	$	-	$	16,583	$	317,103

Introduction

~~(1)~~CEA ~~Reflects~~Industries ~~the~~Inc. ~~dollar~~is ~~amount of~~ the ~~grant~~largest ~~date~~publicly-traded ~~fair~~DAT ~~value~~focused ofexclusively ~~awards~~on ~~granted in 2023 or 2024~~BNB, ~~measured~~the innative ~~accordance~~token ~~with~~of ~~FASB~~the ~~Accounting~~BNB ~~Standards~~Chain ~~Codification~~ecosystem. ~~(“ASC”)~~We ~~Topic~~seek ~~718~~to ~~(“Topic~~continue ~~718”)~~to ~~without~~build ~~adjustment~~and ~~for~~manage ~~estimated~~the ~~forfeitures.~~largest ~~For~~corporate atreasury ~~discussion~~ of ~~the~~BNB ~~assumptions used~~ to ~~calculate~~provide ~~the~~institutional-grade ~~value~~exposure ofto ~~equity~~BNB ~~awards,~~Chain ~~refer~~and to ~~Note~~generate 13income toon our ~~consolidated~~eligible ~~financial~~BNB ~~statements~~holdings ~~for~~through ~~the~~active ~~fiscal~~treasury ~~year ended December 31~~management, ~~2024~~derivatives, ~~included~~or inthrough ~~this Annual Report~~Airdrops. ~~(2)~~We ~~Mr.~~may ~~McDonald~~also ~~was~~generate ~~appointed~~returns ~~Chief~~through ~~Executive~~additional ~~Officer~~digital ~~and~~asset-related ~~President~~activities insuch ~~November~~as ~~2018.~~validation ~~Amounts presented include all compensation for Mr. McDonald for the full 2024~~ and ~~2022~~staking ~~years. The 2023 bonuses were paid in recognition of~~ services, ~~rendered~~lending, and ~~contributions~~other toDeFi ~~the~~protocols ~~Company’s performance~~ in the ~~prior year~~future, inthough ~~respect~~we ofhave ~~the~~not ~~2021~~staked ~~Annual~~or ~~Incentive~~pledged ~~Plan.~~any ~~2023~~BNB ~~option~~through ~~awards include non-qualified stock options to purchase 3~~April 30,~~054~~ ~~shares~~2026 ofaside ~~common~~from ~~stock~~BNB ~~which~~pledged ~~vested~~for ~~upon~~our ~~grant~~debt obligations. ~~Other~~At ~~compensation~~April 30, ~~in 2024 and 2023 includes (i) employer-paid portion of health plan benefits ($8~~2026,~~456~~ ~~and~~we ~~$9,045,~~held ~~respectively)~~515,544 ~~and~~BNB ~~(ii)~~tokens ~~employer~~with ~~matching~~an ~~contributions~~aggregate ~~under~~fair ~~our~~value ~~401(k)~~of ~~plan (~~$~~13,200 and $13,200, respectively)~~317. (3) ~~Mr. Patel was appointed Chief Financial Officer~~million, ~~Secretary~~ and ~~Treasurer~~digital in March 2022. Amounts presented include all compensation for Mr. Patel for 2024 and 2023. The 2023 bonus was paid in recognition of services rendered and contributions to the Company’s performance in the prior yearassets, inprimarily ~~respect of the 2021 Annual Incentive Plan. 2023 option awards include non-qualified stock options to purchase 1~~BNB,~~800~~ ~~shares~~represented ~~of common stock which vested upon grant~~94.6% ~~The options were awarded in recognition~~ of ~~services~~our ~~rendered~~total ~~and contributions to the Company’s performance in the prior year~~assets, ~~pursuant~~while toour ~~the~~Retail ~~2021~~and ~~Annual~~Industry ~~Incentive~~segment ~~Plan.~~operating ~~Other~~businesses ~~compensation~~represent ina ~~2024~~significantly ~~and~~smaller ~~2023 includes (i) employer-paid~~ portion of ~~health plan benefits ($6,055 and $5,325, respectively), and (ii) employer matching contributions under~~ our ~~401(k)~~overall ~~plan~~assets ~~($5,796~~based ~~and~~on ~~$11,258,~~economic ~~respectively)~~exposure. ~~Mr. Patel’s employment was terminated effective June 4, 2024.~~

~~Outstanding Equity~~Our ~~Awards~~strategy is built around a simple thesis: BNB is a scarce, utility-driven digital asset that serves as a core economic asset within one of the most active, and growing, blockchain ecosystems in the world. We seek to provide public equity market investors with exposure to BNB through a Nasdaq-listed, SEC-reporting company that combines direct BNB ownership, public company governance, audited financial reporting, treasury controls, custody infrastructure, and capital markets access. We view BNB as a strategic treasury asset and intends to continue evaluating opportunities to acquire additional digital assets as part of its capital allocation strategy.

~~The following~~We ~~table~~believe ~~sets~~our ~~forth~~platform ~~certain~~is ~~information~~differentiated ~~regarding~~from ~~outstanding~~direct ~~equity~~token ~~awards~~ownership, ~~held~~private bydigital ~~our~~asset ~~named~~vehicles, ~~executive~~exchange-traded ~~officers~~products, and operating companies that hold digital assets as part of ~~December 31~~a diversified treasury strategy. Our objective is not merely to hold BNB passively, ~~2024~~but to build the leading public company platform for BNB ownership, treasury management, and participation in the BNB ecosystem.

Option Awards

Stock Awards

Name

Number of Securities Underlying Unexercised Options Exercisable

Number of Securities Underlying Unexercised Options Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options

Option Exercise Price

Option Expiration Date

Number of Shares or Units of Stock That Have Not Vested

Market Value of Shares or Units of Stock That Have Not Vested

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (1)

Anthony K. McDonald (1) (2) (3) (4)

2,778

–

160.20

11/28/2028

–

556

–

126.00

1/2/2030

–

149

–

234.00

2/16/2031

–

3,772

–

88.20

11/24/2031

–

769

–

30.12

4/1/2032

–

3,054

–

10.80

3/31/2033

–

11,078

Ian K. Patel (6) (7)

834

–

26.40

3/11/2032

–

1,799

–

10.80

3/31/2033

–

2,633

We acquired Fat Panda on June 6, 2025 and continue to operate its core retail nicotine vape operations in Canada.

~~(1)~~We Onhave ~~November~~prepared ~~28,~~the ~~2018,~~discussion ~~we granted to Mr. McDonald non-qualified stock options to purchase 2,778 shares~~ of ~~common stock under~~ our ~~2017~~results ~~Equity Incentive Plan,~~ of ~~which:~~operations ~~(i)~~for ~~556 options vested and became exercisable on~~ the ~~grant~~fiscal ~~date,~~year ~~(ii)~~ended ~~1,112~~April ~~options vested and became exercisable on December 31~~30, ~~2019,~~2026 ~~and~~by ~~(iii)~~combining ~~1,111~~the ~~options~~Predecessor ~~vested~~ and ~~became~~Successor ~~exercisable~~results ~~on December 31, 2020. On January 2, 2020, we granted to Mr. McDonald non-qualified stock options to purchase 556 shares~~ of ~~common~~operations ~~stock~~and ~~under~~cash ~~our~~flows ~~2017 Equity Incentive Plan in recognition of his performance~~ during ~~2019, which options vested and became exercisable on~~ the ~~grant~~year ~~date.~~ended OnApril ~~February 16~~30, ~~2021,~~2026 we("Combined ~~granted~~Annual toPeriod") ~~Mr. McDonald non-qualified stock options to purchase 149 shares of common stock under our 2017 Equity Incentive Plan in recognition of his performance during 2020, which options vested~~ and ~~became~~comparing ~~exercisable on~~ the ~~grant~~combined ~~date.~~data ~~(2) On November 24, 2021, we granted~~ to ~~Mr.~~the ~~McDonald~~results ~~non-qualified stock options to purchase 371 shares~~ of ~~common~~operations ~~stock~~and ~~under~~cash ~~our~~flows ~~2021 Equity Incentive Plan,~~ of ~~which:~~the ~~(i)~~Predecessor 42for ~~options vested and became exercisable on~~ the ~~grant~~year ~~date,~~ended ~~(ii)~~April ~~41 options vested and became exercisable on November 24~~30, ~~2022, and (iii) 41 options vested and became exercisable on November 24, 2023~~2025. ~~Also~~We onbelieve ~~November~~that ~~24,~~the ~~2021,~~discussion ~~we granted to Mr. McDonald incentive stock options to purchase 3,401 shares~~ of ~~common stock under~~ our ~~2021~~combined ~~Equity~~operational ~~Incentive Plan of which: (i) 378 options vested and became exercisable on the grant date~~results, ~~(ii)~~while ~~378 options vested and became exercisable~~ on ~~November~~different ~~24,~~bases 2022, and (iii) 378 options vested and became exercisable on November 24, 2023. These grants were in accordance with a new Executive Employment Agreement effective November 24, 2021. (3) On November 24, 2021, we granted Mr. McDonald 567 restricted shares of ~~common~~accounting ~~stock~~related ~~under our 2021 Equity Incentive Plan, in accordance with a new Executive Employment Agreement effective November 24, 2021. (4) On April 1, 2022, we granted Mr. McDonald non-qualified stock options~~ to ~~purchase~~the ~~769~~application ~~shares~~ of common stock under out 2021 Equity Incentive Plan, in respect to our 2021 Annual Incentive Plan. The options vested and became exercisable upon grant. (5) On March 31, 2023, we granted Mr. McDonald non-qualified stock options to purchase 3accounting,~~054~~ ~~shares~~is ofappropriate ~~common~~as ~~stock under our 2021 Equity Incentive Plan, in respect to our 2021 Annual Incentive Plan. The options vested and became exercisable upon grant. (6) On March 11, 2022,~~ we ~~granted~~highlight tooperational ~~Mr.~~changes ~~Patel~~for ~~non-qualified stock options to purchase 1,250 shares of common stock under our 2021 Equity Incentive Plan, of which: 167 options vested and became exercisable on~~ the ~~grant~~Predecessor ~~date.~~as ~~The~~well ~~balance of the non-qualified options vest and become exercisable~~ as ~~follows:~~accounting ~~(i)~~related ~~250~~items onspecific March 11, 2023, (ii) 417 on March 11, 2024, and (iii) 417 on March 11, 2025. These options were in accordance with his Employment Agreement effective March 11, 2022. All unvested options were cancelled upon Mr. Patel’s termination. (7) On March 31, 2023, we granted Mr. Patel non-qualified stock options to ~~purchase~~the ~~1,799 shares of common stock under our 2021 Equity Incentive Plan, in respect to our 2021 Annual Incentive Plan~~Successor. ~~The options vested and became exercisable upon grant.~~

Overview of DAT Strategy

Our DAT Strategy represents a significant departure from traditional corporate treasury strategies, which typically involve holding cash, cash equivalents, and short-term investments. Instead, our financial condition and results of operations are 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 our financial condition, results of operations, and the market price of our common stock. Investors should carefully consider the risks associated with our DAT Strategy described under "Part I, Item 1A – Risk Factors" in this Annual Report on Form 10-K.

On August 5, 2025, we launched the DAT Strategy following the closing of the PIPE Transaction that raised approximately $500.0 million in cash and digital assets, with up to $750.0 million of additional proceeds available through warrant exercises.

~~Compensation Arrangements~~Table ~~with~~of ~~Named Executive Officers~~Contents

~~Anthony K.~~Key ~~McDonald~~Drivers of Results of Operations

~~On November~~Our ~~24,~~results ~~2021,~~of ~~the~~operations ~~Company~~are ~~entered~~influenced ~~into~~by anseveral ~~employment~~key ~~agreement~~factors, ~~with~~including: ~~Mr.~~changes ~~McDonald,~~in the ~~Company’s~~market ~~Chief~~price ~~Executive~~of ~~Officer~~BNB and ~~President.~~ ~~The~~other ~~initial~~ancillary ~~term~~digital ofassets ~~the~~held ~~employment~~by ~~agreement~~us; ~~commenced~~fair onvalue ~~November~~adjustments ~~24,~~recognized ~~2021,~~under ~~for~~applicable aaccounting ~~one-year~~standards, ~~term~~including ~~that~~our isissued ~~automatically~~warrants ~~extended for~~treated anas ~~additional~~liabilities; ~~three years upon completion by~~ the ~~Company~~generation of aAirdrop ~~“qualified~~income; ~~offering.”~~operating ~~After~~expenses ~~the~~associated ~~initial~~with ~~term~~maintaining ~~(as~~our ~~may~~public ~~be extended),~~company ~~the~~infrastructure; ~~employment~~and ~~agreement~~strategic ~~automatically~~decisions ~~renews~~regarding ~~for~~the ~~one-year~~acquisition, ~~periods~~holding, ~~unless~~or ~~notice~~disposition of ~~non-renewal~~digital isassets. ~~given~~Because 90we ~~days~~hold ~~prior~~a ~~to the~~substantial ~~end~~quantity of ~~the~~digital ~~then~~assets, ~~expiring~~particularly ~~term.~~BNB, Achanges ~~qualified~~in ~~offering is (A)~~ the ~~closing~~market ofprice ~~a sale~~ of ~~the~~BNB ~~securities~~may ofsignificantly ~~the~~affect ~~Company,~~our ~~whether~~reported inearnings. aThese ~~private placement~~fluctuations ormay ~~pursuant~~not toreflect anchanges ~~effective~~in ~~registration~~our ~~statement~~operating ~~under~~performance ~~the~~but ~~Securities~~instead ~~Act~~reflect ofmarket-driven ~~1933,~~changes orin ~~(B)~~ the ~~occurrence~~value of anour ~~up-listing event~~digital ~~(i.e.,~~asset ~~having the Company’s stock quoted on an alternative trading platform from the Over-the-Counter (OTC) exchange to a major stock exchange)~~holdings.

~~Mr. McDonald will be paid an annualized base salary of $275~~Historically,~~000~~ ~~per~~our ~~year,~~results ~~which increased to $350,000 per year upon the completion~~ of ~~the Qualified~~operations ~~Offering~~also onincluded ~~February~~significant ~~15,~~transactional ~~2022.~~expenses ~~The~~we ~~base~~incurred ~~salary~~in ~~will~~connection bewith ~~reviewed~~our atacquisition ~~least annually prior to the end~~ of ~~each~~Fat ~~calendar year to ascertain whether~~Panda, in the ~~judgment~~PIPE ~~of the board of directors~~Transaction, ~~it should be increased for the next calendar year. Mr. McDonald is eligible to receive an annual incentive bonus under the Company’s annual incentive compensation plan~~ and ~~policy~~our ~~for~~shareholder ~~each~~advisory ~~full~~expenses ~~completed calendar year of employment during the term as determined by the board of directors~~ in ~~its~~connection ~~sole~~with ~~discretion.~~our ~~Mr.~~Board ~~McDonald~~committee ~~will~~reconstitution beand ~~eligible for~~shareholder anactivism; ~~annual~~however, ~~target~~we ~~bonus~~do ofnot ~~fifty~~anticipate ~~percent~~incurring ofsuch ~~the~~costs ~~base salary. Payment of the annual bonus may be made~~ in ~~the~~connection ~~form~~with ofour ~~cash,~~ongoing ~~stock, or a combination thereof, as determined in the sole discretion of the board of directors~~operations. ~~Mr. McDonald will also receive an immediate cash amount of $50,000, payable promptly after the signing of the employment agreement.~~

~~Mr. McDonald,~~BNB at the signing of the employment agreement was issued 5,753 shares of common stock, which has an aggregate fair market value of $50,000, and was paid a gross up on that amount for federal state and local income tax. Mr. McDonald was awarded a stock option to purchase 3,772 shares of common stock under the 2021 Stock Award Plan, that was approved by shareholders, with an exercise price of $88.20 per share, the price of a share of common stock on the day immediately prior to the signing of the employment agreement. The vesting of the options is at the rate of one-third on each of the date of the signing of the employment agreement and the first and second anniversary of the signing of the employment agreement. The option, once vested, is exercisable for ten years from the date the employment contract was signed. Vesting will be accelerated upon a change of control of the Company and certain termination events.Holdings

~~Mr. McDonald~~During isthe ~~entitled~~period tofrom ~~participate~~June in7, ~~the~~2025 ~~Company~~through ~~employee~~April ~~benefit~~30, ~~plans~~2026, ~~including~~we ~~any~~accumulated ~~group~~515,544 ~~health~~BNB. ~~and~~During ~~welfare~~this ~~insurance~~same ~~and~~period, ~~profit sharing~~the ~~and~~market ~~401(k)~~price ~~plans~~of ~~that~~BNB ~~are~~declined ~~sponsored~~significantly ~~generally~~ by ~~the Company for its employees~~28.9%, ~~as may be offered~~ from ~~time to time~~$865.99 ~~Notwithstanding the~~weighted-average ~~foregoing,~~price ~~the~~we ~~Company~~paid ~~may~~per ~~modify~~BNB, orto ~~terminate~~$615.38 ~~any~~per ~~employee~~BNB ~~benefit plan~~ at ~~any~~April 30, ~~time~~2026. ~~Mr.~~As ~~McDonald~~a ~~will~~result, bethe ~~entitled~~aggregate tofair ~~vacation, personal~~value ~~days,~~of ~~sick~~our ~~days~~BNB ~~and~~holdings ~~expense~~decreased ~~reimbursement.~~from Ifour Mr$446.5 ~~McDonald’s~~million ~~employment~~cost isbasis ~~terminated for cause, due~~ to ~~death,~~$317.3 ~~due to disability or voluntary resignation~~million, hedriven ~~will~~by bemarket ~~paid~~price ~~his~~volatility ~~base~~rather ~~salary~~than tochanges in the ~~date~~quantity of ~~termination,~~BNB ~~any unpaid annual bonus, COBRA benefits and any unpaid expense reimbursement~~held. IfThe hedecline isin ~~terminated~~BNB ~~without~~market ~~cause~~prices orhad hea ~~resigns~~materially ~~for~~greater ~~good~~impact ~~reason,~~on ~~then he will be paid one year’s base salary, and~~ the ~~annual~~carrying ~~bonus~~value ~~for that year. The employment agreement has typical activity restrictions for non-solicitation~~ of ~~customers and~~digital ~~employees~~assets ofthan the ~~Company~~operating ~~and~~results ~~covenants~~of ~~for~~our ~~confidentiality,~~Retail ~~non-competition, inventions~~ and ~~protection~~Industry ofbusiness ~~Company~~during ~~intellectual~~the ~~property~~same period.

~~Item 12~~In addition to changes in the market value of BNB tokens, we recognized a substantial decrease in Airdrop-related income associated with those holdings. ~~Security~~We ~~Ownership~~maintain eligibility to receive Airdrops distributed within the Binance ecosystem for those BNB tokens we hold at Ceffu, however Airdrop activity has declined since we launched our DAT Strategy. 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 ~~Certain~~the ~~Beneficial~~decline ~~Owners~~in ~~and~~BNB ~~Management~~market ~~and~~prices ~~Related~~during ~~Stockholder~~the ~~Matters~~period from June 7, 2025 through April 30, 2026.

~~PRINCIPAL STOCKHOLDERS~~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 which BNB holders receive newly issued tokens by locking or holding BNB. Since we launched our DAT Strategy, the frequency and scale of these programs declined materially compared to historical program periods, contributing to a reduction in platform-delivered yield through April 30, 2026. Taken together with the decline in Airdrop activity described above, these trends reflect a broader moderation in yield generation during the period. We 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.

~~The following~~Warrant table sets forth the shares of our common stock beneficially owned by (i) each of our directors, (ii) each of our named executive officers, (iii) all of our directors and executive officers as a group, and (iv) all persons known by us to beneficially own more than 5% of our outstanding common stock as of the date of the filing of this report.Liabilities

~~The Company~~Our ~~has~~warrant ~~determined~~liabilities ~~the~~were ~~beneficial~~also ~~ownership~~a ~~shown~~significant ondriver ~~this~~of ~~table~~our inreported ~~accordance~~results ~~with~~of ~~the~~operations ~~rules~~for of the ~~SEC.~~period, ~~Under~~and ~~these~~we ~~rules,~~believe ~~shares are~~they ~~considered~~will ~~beneficially~~continue ~~owned~~to ifcontribute ~~held~~meaningful byvolatility ~~the~~to ~~person~~our ~~indicated~~earnings, orindependent ifof ~~such~~our ~~person,~~underlying ~~directly~~operating orperformance. ~~indirectly,~~During ~~through~~the ~~any~~period ~~contract,~~from ~~arrangement~~June 7, ~~understanding,~~ ~~relationship~~2025 orthrough ~~otherwise~~April 30, ~~has~~2026, orwe ~~shares~~recognized ~~the~~a ~~power~~non-cash togain ~~vote,~~of to$282.9 ~~direct~~million ~~the~~related ~~voting~~to ofour ~~and/or~~stapled towarrant ~~dispose~~liability, ofwhich orwas toa ~~direct the~~primary ~~disposition~~driver of ~~such~~net ~~shares~~income. ABecause ~~person~~the isfair ~~also~~value ~~deemed~~of tothese ~~be a beneficial owner~~ out-of-the-money ~~shares~~warrants ifgenerally ~~that~~fluctuate ~~person~~inversely ~~has~~with the ~~right~~trading toprice ~~acquire~~and ~~such shares~~volatility ~~within~~of 60our ~~days~~common ~~through~~stock and the ~~exercise~~underlying ofdigital ~~any warrant~~assets, ~~option~~as orwell ~~right~~as orthe ~~through~~passage ~~conversion~~ of atime ~~security.~~and ~~Except~~changes ~~as otherwise indicated~~ in ~~the~~our ~~accompanying~~assumptions ~~footnotes,~~about ~~the~~warrant ~~information~~exercise inbehavior ~~the~~that ~~table~~can ~~below~~change issignificantly ~~based~~from onperiod ~~information~~to asperiod, ofthe ~~March~~resulting ~~27,~~fair ~~2025.~~value ~~Unless~~adjustments ~~otherwise~~can ~~indicated in~~produce ~~the~~substantial ~~footnotes~~non-cash togains ~~the~~or ~~following~~losses ~~table,~~that ~~each~~do ~~person~~not ~~named~~reflect inour ~~the~~core ~~table~~operating ~~has~~performance, ~~sole~~and ~~voting~~we ~~and~~caution ~~investment~~investors ~~power~~that ~~with~~our ~~respect~~reported tonet ~~shares~~income ~~of common~~or ~~and~~loss ~~preferred~~for ~~stock~~any ~~and~~given ~~the~~period ~~address~~may ~~for~~be ~~such~~disproportionately ~~person~~influenced isby ~~c/o~~these ~~CEA~~mark-to-market ~~Industries~~changes ~~Inc.~~rather ~~385~~than ~~South~~by ~~Pierce~~the ~~Avenue,~~underlying ~~Suite~~profitability C,of ~~Louisville,~~our ~~CO 80027~~operating segments.

Digital Asset Market Conditions

Our treasury strategy is designed to accumulate and compound BNB over time, with a focus on growing the 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.

	Common Stock
Name of Beneficial Owner	Number of Shares Owned Beneficially (1)		Percentage of Class (2)
Directors
Anthony K. McDonald (3)		19,025		2.4	%
Nicholas J. Etten (4)		10,227		1.3	%
Marion Mariathasan (5)		9,627		1.2	%
James R. Shipley (6)		3,959		*	%
Matthew Tarallo (7)		1,529		*	%
Executive Officers and Directors as a Group (8)		44,367		5.5	%
5% or More Stockholders
Lance Finlinson (9)		67,164		8.4	%
111 Equity Group LLC, Rochel M. Kassiere and Chaim Herzog (10)		61,308		7.6	%
*Represents less than 0.1%.

Table of Contents

~~(1)~~During ~~Beneficial ownership has been determined in accordance with Rule 13d-3 under~~ the ~~Exchange~~period ~~Act.~~from ~~(2)~~June ~~Based on a total of 802~~7,~~346~~ ~~shares of the Company’s common stock issued and outstanding as of March 27,~~ 2025. ~~(3)~~through ~~Includes~~April ~~(i) 7~~30,~~947~~ ~~shares of common stock held of record~~2026, ~~and~~digital ~~(ii)~~asset ~~11,078~~markets ~~shares~~experienced ofperiods ~~common stock issuable upon the exercise~~ of ~~options~~significant ~~exercisable~~price ~~within 60 days~~volatility. ~~(4)~~The ~~Includes~~market ~~(i)~~price ~~7,947 shares~~ of ~~common~~BNB ~~stock~~fluctuated ~~held~~in ofresponse ~~record,~~to ~~and~~a ~~(ii)~~variety ~~880 shares~~ of ~~common~~factors, ~~stock~~including ~~issuable~~macroeconomic ~~upon the exercise of options exercisable within 60 days. (5) Includes 9~~conditions,~~628~~ ~~shares~~investor ofsentiment ~~common~~toward ~~stock~~digital ~~held of record. (6) Includes (i) 3~~assets,~~079~~ ~~shares~~developments ofaffecting ~~common~~cryptocurrency ~~stock~~exchanges ~~held~~and ofblockchain ~~record~~networks, and ~~(ii)~~regulatory ~~880~~developments ~~shares~~in ~~of common stock issuable upon~~ the ~~exercise~~United ofStates ~~options~~and ~~exercisable~~other ~~within 60 days~~jurisdictions. ~~(7)~~Because ~~Includes~~we ~~1,529~~hold ~~shares~~a ofsignificant ~~common~~quantity ~~stock held~~ of ~~record. Does not include 1~~BNB,~~529~~ ~~shares~~changes ofin ~~common~~the ~~stock~~market ~~subject~~price ~~to unvested equity awards. (8) Includes (i) 30,001 shares~~ of ~~common~~BNB ~~stock held of record~~had, and ~~(ii)~~will ~~12,838~~continue ~~shares~~to ofhave, ~~common~~a ~~stock~~substantial ~~issuable~~impact ~~upon~~on ~~the~~our ~~exercise~~balance ofsheet ~~options~~and ~~exercisable~~results ~~within 60 days. Does not include 1,529 shares~~ of ~~common stock subject to unvested equity awards~~operations. ~~(9)~~Investors Asshould ~~reported~~consider onthat ~~Form~~fluctuations ~~13D~~in ~~filed~~our byfinancial ~~Lance~~results ~~Finlinson~~during ~~dated November 30, 2023, as adjusted for~~ the ~~reverse~~period ~~stock~~were ~~split~~driven ~~effected~~primarily ~~June~~by 4,changes ~~2024.~~in ~~(10)~~digital Asasset ~~reported~~market onprices ~~Form~~and ~~13D,~~Airdrop ~~Amendment~~yield ~~No.~~rather 1,than ~~filed~~changes ~~jointly~~in byour ~~111~~operating ~~Equity Group LLC, Rochel M~~activities. ~~Kassirer, and Chaim Herzog dated June 26, 2024.~~

Our Retail and Industry Business

We operate our Fat Panda and industrial climate control systems businesses within our Retail and Industry segment. At April 30, 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 our industrial climate control systems business represents a relatively small portion of consolidated revenue, totaling $1.7 million for the period from June 7, 2025 through April 30, 2026.

Recent Developments

Restatements

The conclusion was based on the identification of an error in the calculation of the weighted-average number of shares outstanding used in determining basic and diluted EPS. The error resulted in an understatement of basic and diluted weighted-average shares outstanding, which in turn understated or overstated basic and diluted EPS. For the three months ended October 31, 2025, basic and diluted weighted average number of shares were understated by 2,214,508 shares and as a result, basic and diluted EPS were overstated by $0.21. For the Second Quarter Successor period, basic weighted average shares were understated by 1,857,056 shares and diluted weighted average shares were understated by 857,057 shares and as a result, basic and diluted EPS were overstated by $0.45. For the three months ended January 31, 2026, basic and diluted weighted average number of shares were understated by 2,376,236 shares and as a result, basic and diluted EPS were understated by $0.08. For the Third Quarter Successor period, basic weighted average shares were understated by 21,806,662 shares and diluted weighted average shares were understated by 21,806,663 shares and as a result, basic EPS was overstated by $4.26 and diluted EPS was overstated by $4.21. The error did not impact the Company's net income (loss), total assets, total liabilities, stockholders’ equity, revenue, cash flows, or net income (loss) available to common stockholders in each affected period.

On June 23, 2026, we restated our previously issued unaudited condensed consolidated financial statements for the second and third fiscal quarters of 2026 resulting from an error in the computation of weighted-average shares used to compute basic and diluted earnings (loss) per share, which it deemed material on June 11, 2026.

Nasdaq Compliance

On May 7, 2026, we received a letter from the Staff of Nasdaq notifying us that we no longer comply with Nasdaq Listing Rule 5620(a) for continued listing of shares of our common stock, due to our failure to hold an annual meeting within 12 months of our fiscal year end. As a result, we have submitted a plan to Nasdaq to regain compliance. If Nasdaq accepts our plan, Nasdaq can grant an exception of up to 180 calendar days from the fiscal year ended April 30, 2026, or until October 27, 2026, to allow the Company to regain compliance

Our plan of compliance with respect to the foregoing requirement setting forth, among other things, a proxy statement preparation and proxy solicitation timeline leading to our annual meeting of our shareholders. We cannot provide any assurance that the Staff will accept our plan of compliance. In the event our plan is not accepted, our securities may be subject to delisting and we will have the opportunity to appeal the Staff’s delisting determination to a hearings panel. We expect to organize an annual meeting in the coming weeks to regain compliance with the applicable Nasdaq Listing Rules.

~~Item 13.~~Table ~~Certain~~of ~~Relationships and Related Transactions, and Director Independence~~Contents

~~Transactions with~~AMA ~~Related Parties~~Litigation

~~The Company~~On ~~entered~~May ~~into~~22, a2026, ~~manufacturer~~we ~~representative~~filed ~~agreement~~a ~~with~~complaint ~~RSX~~against ~~Enterprises~~the ~~(“RSX”)~~Asset Manager, in ~~March~~the ~~2021~~United toStates ~~become~~District Court for the District of Delaware, regarding the Asset Management Agreement. The complaint seeks a ~~non-exclusive representative~~declaration ~~for~~that the ~~Company~~Asset toManagement ~~assist~~Agreement inis ~~marketing~~void ~~and~~from ~~soliciting~~inception as unconscionable and orders. ~~James~~all Rfees paid by us to the Asset Manager under the Asset Management Agreement since inception be returned to the Company. ~~Shipley~~Alternatively, ~~one~~the ofcomplaint ~~our~~seeks ~~independent~~a ~~directors,~~declaration ~~has~~ that a ~~significant~~liquidated ~~ownership~~damages ~~interest~~clause in ~~RSX~~the Asset Management Agreement, which would accelerate nearly 20 years of future fees upon termination, is an unenforceable penalty.

~~Under the~~Board ~~manufacturer representative agreement, RSX will act as a non-exclusive representative for the Company within the United States, Canada~~ and ~~Mexico~~Executive 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. During the years ended December 31, 2024, and December 31, 2023, the Company paid $6,763 and $18,273, respectively, in commissions under this agreement.Changes

On ~~October~~ 13May 4, ~~2022~~2026, ~~the~~Anthony ~~Company~~K. ~~entered into an agreement with Lone Star Bioscience~~McDonald, ~~Inc.~~our ~~(Lone~~President ~~Star)~~and toa ~~provide~~member ~~engineering~~of ~~design~~our ~~services. Nicholas Etten~~Board, ~~one~~resigned ofas our ~~independent~~President ~~directors,~~and isas ~~the~~a ~~Chief~~director ~~Executive Officer~~ of ~~Lone~~the ~~Star~~Company. ~~The~~In ~~balance~~exchange ~~due~~for ~~under~~a ~~this~~release ~~agreement~~of ~~totaled $2,500,~~claims ~~with~~and ~~$1,250 received as a deposit in 2022~~Mr. ~~Another~~McDonald’s agreement ~~for~~to ~~engineering~~certain ~~services~~covenants, ~~was~~including ~~signed~~cooperation, onMr. ~~December~~McDonald ~~20,~~will ~~2022,~~receive inan ~~the amount~~aggregate of $~~10,900~~0.3 Wemillion ~~entered~~payable ~~into~~over ~~positive~~12 ~~change~~months ~~orders~~and inreimbursement ~~March~~for ~~2023~~legal offees ~~$3,577, increasing the total~~ of ~~the~~up ~~second sales order~~ to $1410,~~477~~000. NoMr. ~~transactions~~McDonald’s ~~were~~outstanding ~~recorded~~equity ~~during~~awards ~~the~~will ~~year~~remain ~~ended~~in ~~December~~effect ~~31, 2024,~~ in ~~respect~~accordance ofwith ~~these~~their ~~agreements~~terms.

On ~~June~~ 19June 10, ~~2024~~2026, ~~the Company engaged~~ Nicholas J. Etten, a ~~director~~member of the ~~Company~~Board, toresigned ~~provide~~as ~~services~~a ~~covering~~director ~~transaction~~of ~~sourcing and evaluation, in~~ the Company’s. ~~effort~~In toexchange ~~arrange~~ for a ~~merger,~~release ~~acquisition,~~of ~~combination~~claims orand ~~other strategic transaction.~~ Mr. Etten ~~has~~'s aagreement ~~background~~to incertain ~~corporate~~covenants, ~~development~~including ~~and~~cooperation, ~~investment banking in multiple industries.~~ Mr. Etten ~~will~~received ~~be paid~~ a ~~weekly~~payment ~~fee~~ of $285,~~500. It~~000 isand ~~expected~~will ~~that~~receive ~~Mr.~~reimbursement ~~Etten~~for ~~will~~legal ~~provide~~fees ~~a minimum~~ of ~~10 hours per week,~~ up to ~~a maximum of 40 hours a month~~$50,000. ~~as determined by the Company and~~ Mr. Etten.'s ~~The~~outstanding ~~consulting~~equity ~~agreement~~award will beremain ~~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~~effect ~~of his services to the Company under the agreement. During the year ended December 31, 2024, the Company paid Mr. Etten $58,250~~ in ~~respect~~accordance ofwith ~~services~~its ~~related to this agreement~~terms.

~~During 2024,~~Components except as discussed above, there have been no transactions in which the Company was or is a participant, and there are no currently proposed transactions in which the Company is to be a participant, in which the amount involved exceeds the lesser of ~~$120,000~~Results ~~or 1%~~ of the Company’s average assets at year-end for the last two completed fiscal years, and in which any director, executive officer or beneficial holder of more than 5% of any class of our voting securities or member of such person’s immediate family had or will have a direct or indirect material interest.Operation

~~Company Policy Regarding Related Party Transactions~~Revenue

~~The Company~~We ~~has~~earn ~~procedures~~revenues in place for the review, approval and monitoring of transactions involving the Company and certain persons related to the Company. The Company has a code of business conduct and ethics that generally prohibits any employee, officer or director from ~~engaging~~ ~~in any transaction where there is a conflict between such individual’s personal interest and~~ the ~~interests~~two ofoperating ~~the~~businesses ~~Company. Waivers~~within toour ~~the~~Retail ~~code of business conduct~~ and ~~ethics~~Industry ~~can generally only be obtained from the Audit Committee of the Board and are publicly disclosed as required by applicable law and regulations.~~segment:

~~In addition,~~●Retail ~~the~~sales ~~Audit Committee~~ of ~~the~~vaping ~~Board~~products ~~will~~through ~~review~~our ~~all~~Fat ~~related~~Panda ~~party~~retail ~~transactions~~locations ~~for~~in ~~potential~~Central ~~conflict~~Canada ~~of interest situations on an ongoing basis (if such transactions are not reviewed~~ and ~~overseen~~e-commerce bysales ~~another~~through ~~independent~~Fat ~~body of the Board). In accordance with that policy, the Audit Committee’~~Panda's ~~practice~~online isplatform ~~to review~~ and oversee any transactions that are reportable as related party transactions under the Financial Accounting Standards Board (“FASB”) and SEC rules and regulations. Management advises the Board on a regular basis of any such transaction that is proposed to be entered into or continued and seeks approval.

~~Item 14.~~●Sales ~~Principal~~of ~~Accountant~~industrial ~~Fees~~climate ~~and~~control ~~Services~~systems for the controlled environment agriculture industry.

~~Sadler, Gibb~~Our &revenues ~~Associates,~~do ~~L.L.C.~~not ~~(“SGA”)~~include ~~has~~any ~~acted~~activities aswithin ~~the~~our ~~Company’s~~BNB ~~independent~~Treasury ~~registered~~Management ~~public accounting firm for the fiscal years ended December 31~~segment, ~~2024,~~including ~~and December 31, 2023. SGA has advised us that neither~~ the ~~firm~~income ~~nor~~we ~~any~~earn ~~present~~on ~~member~~our orBNB ~~associate of~~holdings itsuch ~~has~~as ~~any~~income ~~material~~earned ~~financial~~from ~~interest, direct or indirect, in the Company or its affiliates~~Airdrops.

Fat Panda

Revenues earned by Fat Panda from its retail stores at point of sale are presented at the stated sales price, gross of transaction costs such as credit card processing fees, and net of sales taxes and applicable sales discounts and promotions.

Industrial Climate Control System

We also earn revenue from the design, engineering, and sale of environmental control technologies and components for the controlled environment agriculture industry. Contracts may span multiple phases of a customer's project life cycle, from facility design and system engineering to equipment delivery and start-up, though we do not provide construction or installation services. Generally, we accept a customer's deposit to acquire the necessary equipment and recognize revenue only when we, or our supplier, ship the finished equipment and fulfill our contractual performance obligations.

Cost of Revenue

Like our revenues, our cost of revenue arises solely from our Fat Panda and Industrial Climate Control System businesses within our Retail and Industry segment and consist primarily of the cost of inventory sold, including certain labor costs and charges for inventory excess or obsolescence, shipping and handling costs, and applicable excise taxes.

Operating Expenses

Our operating expenses generally consist of fees we pay to the Asset Manager; selling, general and administrative expenses; and net realized and unrealized gains and losses on our digital assets, primarily on our BNB holdings. During the period from June 7, 2025 through April 30, 2026, we also incurred elevated advisory expenses in connection with a shareholder action.

Management fees to affiliate

We expense contractual asset management fees incurred in connection with the AMA for assets within our DAT Strategy on a monthly basis. Such fees are based on a tiered percentage of the value of those assets.

~~The following~~Table ~~table~~of ~~summarizes the fees for SGA for the year ended December 31, 2024 and for the year ended December 31, 2023.~~Contents

	2024			2023
Audit Fees	$	108,385		$	111,000
Audit-Related Fees		16,707			2,725
Tax Fees		10,090	(1)		10,943	(2)
Total	$	135,182		$	124,668

Selling, general and administrative expenses

(1)	Tax fees in 2024 relate to tax returns for the 2023 year.
(2)	Tax fees in 2023 relate to tax returns for the 2022 year.

Selling, general, and administrative expenses include costs incurred in the day-to-day operations of the business, including employee compensation and benefits, stock-based compensation issued to directors and employees, occupancy and facilities costs, professional and legal fees, insurance, advertising and marketing.

~~Audit Fees.~~Shareholder ~~Audit~~advisory fees consist of fees billed by our independent registered public accounting firms for professional services rendered in connection with the audit of our annual consolidated financial statements, and the review of our consolidated financial statements included in our quarterly reports.expenses

~~Audit-Related Fees.~~We ~~Audit-related~~incurred ~~services~~significant ~~consist~~legal, ofstrategic, ~~fees~~and ~~billed~~investor bycommunications advisors costs in connection with our ~~independent~~ongoing ~~registered~~response ~~public~~to ~~accounting~~the ~~firms~~shareholder ~~for~~activism ~~assurance~~campaign. ~~and~~YZi ~~related services~~Labs ~~that~~filed ~~are~~preliminary ~~reasonably~~consent ~~related~~solicitation materials seeking to expand the ~~performance~~size of the ~~audit~~Board orand ~~review~~elect its own slate of ~~the~~director ~~Company’s~~candidates, ~~financial~~and ~~statements~~stated its intent to nominate candidates at our next annual meeting of stockholders. As a result, we engaged advisors to protect shareholder interests and ~~are~~respond ~~not reported~~to ~~under~~the ~~“Audit~~unsolicited ~~Fees~~proxy and consent solicitation activities.” These ~~services~~matters ~~include~~have required significant time and resources from the ~~review~~Board ofand ~~our~~management ~~proxy~~and ~~statement~~are expected to continue to do so in the near term.

~~Tax Fees.~~Unrealized ~~Tax fees consist of fees billed by our independent registered public accounting firms for professional services rendered for tax compliance, tax planning~~ and ~~tax~~Realized ~~advice.~~Loss ~~These~~on ~~services~~Digital ~~include assistance regarding federal, state, and local tax compliance.~~Assets

~~All Other~~Unrealized ~~Fees~~and realized loss on digital assets represents net unrealized and realized fair value gains and losses on our digital assets, primarily BNB holdings. ~~All~~Unrealized ~~other~~gains ~~fees~~and ~~would~~losses ~~include~~result ~~fees~~from ~~for~~the ~~products~~remeasurement of digital assets at fair value at each reporting date using quoted prices. Unrealized losses are driven primarily by fluctuations in the market price of our digital assets rather than changes in the quantity of digital assets held. Realized gains and ~~services~~losses are recognized upon the sale or other ~~than~~disposition of digital assets and are determined using the ~~services~~specific ~~reported~~identification ~~above~~method.

~~Pre-Approval Policy~~Other affiliate operating expenses

~~Our Audit~~Other ~~Committee~~affiliate ofoperating ~~the~~expenses ~~Board~~represent ~~pre-approves~~a ~~all~~liability ~~services~~recognized tofor bean ~~provided~~incentive byaward granted to our ~~independent~~Chief ~~registered~~Executive ~~public~~Officer ~~accounting~~in ~~firm~~connection with a transition agreement, payable in a variable amount of cash in lieu of an equity incentive award.

Other Income, Net

Our other income represents the income or loss generated from non-operating activities, including the income we receive on our BNB holdings, as well as interest we pay on our debt obligations and changes in the fair value of warrants we've issued and treat as liabilities for accounting purposes. During the period from June 7, 2025 through April 30, 2026, we also incurred costs in connection with our acquisition of Fat Panda and our issuance of shares of our common stock and warrants as part of the PIPE Transaction.

Airdrop income

Represents income generated from new tokens or coins distributed by projects within the Binance ecosystem to our eligible BNB holdings. We hold the majority of our BNB tokens with Ceffu, a non-U.S. institutional digital asset custody platform operating within the Binance ecosystem, which enables us to maintain eligibility to receive airdrops. Airdrop income is measured at the fair value of the tokens received on the date of distribution. The timing, frequency, and magnitude of future airdrop allocations are determined by third-party projects and the Binance platform and are outside our control.

Gain on change in fair value of warrant liability

Non-cash gains or losses resulting from the remeasurement of our Stapled Warrants issued as part of the PIPE Transaction are treated as liabilities. Changes in fair value are driven primarily by fluctuations in the market price of the publicly-traded warrants as well as our assumptions around the implied volatility and other inputs used in our valuation model during periods when the publicly-traded warrants become less liquid. Generally, reductions in the market price of our common stock cause us to report unrealized gains since the warrants are more out-of-the-money and their value declines, and the reduced likelihood of warrant exercise reduces our liability. The fair value of the warrants are determined on a gross basis, and does not consider the value of the cash contribution to us upon exercise.

Interest expense, and interest expense to affiliate

Interest expense represents the interest payable by us on our outstanding debt obligations, including a $4.0 million bridge loan used to acquire Fat Panda, which we paid in full in December 2025, as well as convertible and non-convertible note payables also in connection with the Fat Panda acquisition. We include the amortization of debt discounts or premiums as well as applicable foreign currency translation adjustments associated with those instruments.

~~PART IV~~Table of Contents

~~Item 15.~~PIPE ~~Exhibits~~transaction ~~and Financial Statement Schedules~~costs

~~a. Documents~~Costs ~~Filed~~incurred in connection with the PIPE Transaction, including legal, advisory, placement agent, and other transaction-related fees allocable to the Stapled Warrants, which are classified as ~~Part~~liabilities ofand ~~this~~carried ~~Report~~at fair value. We allocated remaining costs to additional paid-in capital, which did not impact net income.

~~The following~~Business ~~consolidated~~combination ~~financial statements of CEA Industries Inc. are filed as part of this Annual Report on Form 10-K:~~expenses

Financial Statements	Page(s)
Report of Independent Registered Public Accounting Firm (PCAOB ID NO: 3627)	F-1 - F-2
Consolidated Balance Sheets as of December 31, 2024 and 2023	F-3
Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023	F-4
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Years Ended December 31, 2024 and 2023	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023	F-6
Notes to Consolidated Financial Statements	F-7

These expenses represent transaction costs incurred in connection with the acquisition of Fat Panda, including legal, advisory, and other professional fees directly attributable to the business combination. These costs are expensed as incurred and are not capitalizable as part of the purchase price allocation.

~~b. Exhibits~~Other income (expense), net

~~See “Exhibit~~Other ~~Index”~~income onand ~~the~~expense ~~page~~items ~~following~~include ~~the~~foreign ~~consolidated~~currency ~~financial~~transaction ~~statements~~gains and ~~related~~losses ~~footnotes~~arising ~~and~~from the ~~signature~~our ~~page to~~Canadian ~~this~~retail ~~Annual~~vape ~~Report~~operations, interest income on ~~Form~~cash 10deposits, and other non-Koperating items.

~~c. Financial~~Results ~~Statement~~of ~~Schedules~~Operations

~~No financial~~Because ~~statement~~fair ~~schedules~~value ~~are~~changes ~~filed~~in ~~herewith~~digital ~~because~~assets ~~(i)~~are ~~such~~recorded ~~schedules~~through ~~are~~our ~~not~~consolidated ~~required~~statements of operations, orour ~~(ii)~~BNB Treasury Management segment results—and consequently our consolidated net income—will be subject to significant volatility based on fluctuations in the ~~information~~market ~~has~~price ~~been~~of ~~presented~~ BNB. Investors should expect material period-to-period variations in our reported net income that may bear no relationship to the ~~aforementioned~~operating ~~financial~~performance ~~statements~~of our Retail and Industry segment.

Item 16. Form 10-K Summary

The Company has elected not to provide the summary of information under this item.

Table of Contents

Consolidated Statements of Operations and Comprehensive Income



		Successor			Predecessor					Predecessor




	Period from June 7, 2025 through April 30, 2026			Period from May 1, 2025 through June 6, 2025	Combined Annual Period		Year Ended April 30, 2025			Increase (Decrease)
									$			%
Revenue		$	26,407		$	2,928	$	29,335		$	27,992		$	1,343	4.8	%
Cost of revenue		18,536			2,002		20,538			18,013			2,525		14.0
Gross profit		7,871			926		8,797			9,979			(1,182)		(11.8)

Operating expenses

Management fees to affiliate		5,010			—		5,010			—			5,010		n.m.
Selling, general and administrative expenses		25,618			905		26,523			8,819			17,704		200.7

Shareholder advisory expenses		4,644			—		4,644			—			4,644		n.m.

Unrealized loss on digital assets		130,315			—		130,315			—			130,315		n.m.
Realized loss on digital assets		1,293			—		1,293			—			1,293		n.m.
Other affiliate operating expenses		558			—		558			—			558		n.m.
Total operating expenses		167,438			905		168,343			8,819			159,524		n.m.

Operating income (loss)		(159,567)			21		(159,546)			1,160			(160,706)		n.m.

Other income (loss), net
Airdrop income		7,863			—		7,863			—			7,863		n.m.
Gain on change in fair value of warrant liability		282,920			—		282,920			—			282,920		n.m.
Interest expense		(697)			—		(697)			—			(697)		n.m.
Interest expense to affiliate		(143)			—		(143)			—			(143)		n.m.
PIPE Transaction costs		(14,551)			—		(14,551)			—			(14,551)		n.m.
Business combination expenses		(970)			—		(970)			—			(970)		n.m.
Other income (expense), net		18			—		18			(453)			471		n.m.
Total other income (loss), net		274,440			—		274,440			(453)			274,893		n.m.
Income before income tax expense (benefit)		114,873			21		114,894			707			114,187		n.m.
Income tax expense (benefit)		(372)			2		(370)			137			(507)		n.m.
Net income		115,245			19		115,264			570			114,694		n.m.

Other comprehensive income (loss)
Foreign currency translation adjustment		59			35		94			(1)			95		n.m.
Total comprehensive income		$	115,304		$	54	$	115,358		$	569		$	114,789	n.m.

Revenues

While our revenues increased $1.3 million for the Combined Annual Period compared to the year ended April 30, 2025, $1.7 million of the increase relates to our Industrial Climate Control Systems business, which we omit from our historical results as those operations were not part of the Predecessor and therefore not comparable.

Table of Contents


		Successor			Predecessor					Predecessor




	Period from June 7, 2025 through April 30, 2026			Period from May 1, 2025 through June 6, 2025	Combined Annual Period		Year Ended April 30, 2025			Increase (Decrease)
									$			%
Fat Panda
Retail		$	23,574		$	2,761	$	26,335		$	25,365		$	970	3.8	%
E-commerce		742			166		908			1,939			(1,031)		(53.2)


Other		379			1		380			688			(308)		(44.8)

Total Fat Panda		24,695			2,928		27,623			27,992			(369)		(1.3)
Industrial Climate Control Systems
Equipment and systems sales		1,538			—		1,538			—			1,538		n.m.

Other		174			—		174			—			174		n.m.

Total industrial climate control systems		1,712			—		1,712			—			1,712		n.m.
Total revenue, net		$	26,407		$	2,928	$	29,335		$	27,992		$	1,343	4.8

Fat Panda

Revenue for the Combined Annual Period was $27.6 million, compared to $28.0 million for the year ended April 30, 2025, representing a decrease of $0.4 million, or approximately 1.3%. Retail revenue increased by $1.0 million as a result of increased prices driven by increases in Canadian provincial excise taxes that led to higher excise taxes paid by our customers, partially offset by a decline in volume primarily related to the price increases. The changes in Canadian provincial excise taxes also necessitated substantial changes to our webstore, which experienced prolonged downtime as we redesigned the webstore to comply with the new regulations. As a result, Fat Panda's e-commerce revenue declined $1.0 million as customers were unable to access the Fat Panda webstore and visits to the webstore have not yet returned to levels Fat Panda experienced prior to the webstore redesign as well as impacts from the aforementioned increased excise taxes. Other revenue declined $0.3 million from reduced business-to-business wholesale sales that did not provide attractive margins.

Industrial Climate Control Systems

We earned $1.7 million from the sale of Industrial Climate Control Systems, with $1.5 million representing the delivery of equipment systems under three new contracts and $0.2 million earned from related services provided.

Cost of Revenue

We recognized $2.0 million of costs associated with the $1.7 million in revenues we earned from our Industrial Climate Control Systems business, both of which we omit from presentation during Predecessor periods. The negative margin is a result of project management and manufacturing salaries and overhead exceeding the margin from equipment sales.

The following table presents the results of Fat Panda that relate to both Predecessor and Successor periods:

Fat Panda


	Successor		Predecessor				Predecessor		Increase (Decrease)
	Period from June 7, 2025 through April 30, 2026		Period from May 1, 2025 through June 6, 2025		Combined Annual Period		Year Ended April 30, 2025		$		%
Fat Panda	$	16,494	$	2,002	$	18,496	$	18,013	$	483	2.7	%

Fat Panda's cost of revenue was $18.5 million for the Combined Annual Period, compared to $18.0 million for the year ended April 30, 2025, an increase of $0.5 million, or 2.7%. The increase was primarily driven by higher prices we paid for finished goods that we purchased for resale and are subject to increases in provincial excise taxes enacted in April 2025, partially offset by reduced purchases of discontined products.

Operating Expenses

All our operating expenses other than certain selling, general and administrative costs pertain to corporate and BNB Treasury Management business segment activities

Table of Contents



		Successor			Predecessor					Predecessor




	Period from June 7, 2025 through April 30, 2026			Period from May 1, 2025 through June 6, 2025	Combined Annual Period		Year Ended April 30, 2025			Increase (Decrease)
									$			%






Management fees to affiliate		$	5,010		$	—	$	5,010		$	—		$	5,010	n.m.
Selling, general and administrative expenses		25,618			905		26,523			8,819			17,704		200.7	%

Shareholder advisory expenses		4,644			—		4,644			—			4,644		n.m.

Unrealized loss on digital assets		130,315			—		130,315			—			130,315		n.m.
Realized loss on digital assets		1,293			—		1,293			—			1,293		n.m.
Other affiliate operating expenses		558			—		558			—			558		n.m.
Total operating expenses		$	167,438		$	905	$	168,343		$	8,819		$	159,524	n.m.

Selling, General, and Administrative Expenses


		Successor			Predecessor				Predecessor




	Period from June 7, 2025 through April 30, 2026			Period from May 1, 2025 through June 6, 2025	Combined Annual Period		Year Ended April 30, 2025		Change In
									$		%
Retail and Industry
Compensation expense		$	5,374		$	431	$	5,805	$	4,950	$	855	17.3	%
Professional and contractor fees		535			135		670		704		(34)		(4.8)
Advertising and marketing expense		193			63		256		622		(366)		(58.8)
Equity-based compensation		34			—		34		—		34		n.m.

Other		3,967			276		4,243		2,543		1,700		66.9
Total Retail and Industry		10,103			905		11,008		8,819		2,189		24.8








BNB Treasury Management
Compensation expense		245			—		245		—		245		n.m.
Professional and contractor fees		208			—		208		—		208		n.m.



Other		272			—		272		—		272		n.m.
Total BNB Treasury Management		725			—		725		—		725		n.m.
Corporate
Compensation expense		2,152

Filing Compare · CEA Industries Inc.